Further Thoughts You'll Need Next Time You Go Shopping For a HealthCare Insurance Policy


 Further Thoughts You'll Need Next Time You Go Shopping For a HealthCare Insurance Policy

Everyone needs a healthcare insurance policy, and not just because of the health costs. In fact, most people spend more on their healthcare insurance policy than they did on their car or mortgage.

But what makes for a good healthcare insurance policy? This article aims to help you find the best-suited plan for you by detailing common characteristics that makes a good policy. Whether it's how much it costs, what is covered, how long you're allowed to remain on your current plan before switching, or even whether or not it has tax benefits — these are all things to consider when shopping for an individual health care plan.

Aspect One : Deductible Amounts
Most healthcare plans include a plan deductible, which is the amount you must pay out of pocket before your health insurance company begins paying its share. The deductible is fixed for every year you have the plan. For example, if you have a $500 deductible for the year, you must pay $500 out of pocket over the course of each year before your insurance kicks in. If you spent $500 on healthcare in January, but have not spent more than that total by July 31, then your insurance company will only cover $100 in healthcare expenses for that year.

The deductible amount increases each year, but it is still a relatively small amount in the grand scheme of things. For example, if your insurance plan has a $1000 deductible and you get into an accident that costs $2000 to fix, then the insurance company will only pay $1000 of your bill. The rest is on you to pay with either your own funds or by relying on another kind of health insurance, like a health savings account.

Aspect Two: Maximum Out-of-Pocket Amounts
Many healthcare insurance plans require you to pay the deductible amount in one year before the insurance company will start paying for anything. This means that if you have a $1000 deductible, you must spend $1000 out of pocket before your plan will pay for anything. It's important to note that there is usually a maximum out of pocket (MOOP) amount that applies to each year. This number tells you how much money you are allowed to spend on healthcare in a single year, before your health plan begins paying its share.

A MOOP that is too high could eat up all your money. For example, if you have health expenses of $5000 in a year, but you have a $10,000 out-of-pocket maximum, then your health plan will not pay anything for these expenses. It's important to choose a plan with a MOOP that is appropriate for your expected yearly expenses.

Aspect Three: Lifetime Health Expense Caps
Some health insurance policies cap the total amount of money they ever intend to pay out in benefits. This is called lifetime health expense caps. A lifetime health expense cap sets an upper limit on how much the insurance company will spend on its policyholder over their lifetime.

For example, let's say you have a $100 deductible and a $10,000 lifetime health expense cap. During your first year with the plan, you get into an accident that costs $5000 to fix. This means you've hit your deductible amount of $1000. The insurance company will then pay the remaining $4000 of your bill. You've spent $1000 out of pocket and have spent a total of $5000 on healthcare in that year alone.

The following year, you get into another accident. This time it costs $1000 to fix. So you spend another $1000 on healthcare during that year, for a total of $6000 spent over a two-year period. As you can see, this could become expensive and could easily put the healthcare insurance company in the red after just a few years. If the total limit is reached, your plan will not pay for any other medical expenses — even if they are more pressing than earlier ones. You must then seek out a new policy or pay for healthcare expenses out of pocket.

Aspect Four: Network Requirements
Most health insurance plans depend on having access to doctors and hospitals within their network in order to pay claims. These networks are usually referred to as "provider networks" because they consist of medically related enterprises like hospital systems, healthcare providers and other healthcare professionals.

Usually, the more doctors and hospitals you have in your network, the lower your monthly premium will be. Conversely, if your network consists of a few large providers that take up much of your health plan's health insurance company's budget, then you could end up paying a lot of money for relatively little return in terms of benefits.

Aspect Five: Out-of-Pocket Maximums
Out-of-pocket maximums apply to all aspects of purchasing a health insurance policy. This is a list of things that you can do to lower your monthly premium, but will usually require you to spend more money on healthcare.

For example, if you have a $500 deductible and a $3000 out-of-pocket maximum, then you will pay the first $500 of your medical bills each year but the insurance company will pay for everything else. So if you get into an accident with a $3000 medical bill, then the insurance company will pay for the whole thing. On the flip side, if there was no out-of-pocket maximum on this plan, it would make sense to only use it for emergencies since your deductible applies each time — even if the illnesses or injuries aren't necessarily emergencies.

Aspect Six: Lifetime Limits on Provider Network
Most health insurance plans only pay for a certain amount of medical expenses each year. The amount varies widely and is usually based on lifetime limits, or how much the insurance company will end up paying out over a patient's lifetime. This means that you could have a broken leg that requires $5000 in medical care, but the insurance policy won't pay for anything above $5000 because it's "too old".

Aspect Seven: In-Network Benefits Only Plans and "Pure" Health Insurance Plans
If you want your healthcare insurance to pay your bills from day one, then you'll need to consider another type of health insurance plan — an in-network benefits only plan. This is basically a policy that only meets the minimum requirements for coverage, meaning that it doesn't spend much money on out-of-network benefits. It does this by having you pay higher deductibles and out-of-pocket maximums, as well as having a smaller network.

Whereas you may have had limited coverage if you had an in-network benefits only plan with your previous health insurance plan, a pure health insurance plan is more comprehensive because it doesn't have to care about the size of your doctor's office or medical provider network. All it cares about are the things that apply to everyone — like prescription drugs and hospital visits.

So, you can see that there are a lot of details that go into choosing the right health insurance plan for you. When considering these details, it's important to do your research to find the best healthcare insurance plan for your needs. A good place to start is by finding consumer reviews and an online health insurance comparison website to help you compare and save on healthcare costs.

You'll be happy that you did.

Bryant Suggs is a certified public accountant (CPA) and he has a master's degree in business administration (MBA) from George Mason University.

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