The Basics of Health Insurance Explained

Your health and wellness are integral to maintaining an enjoyable quality of life and pursuing future goals. However, even if you take responsible steps to live a healthy lifestyle and avoid unnecessary dangers, some accidents, injuries and illnesses may still be inevitable. With this in mind, you should prioritize ensuring you can access the medical services and products needed to recover from ailments. This is where health insurance can be one of the most important investments you may ever make.

How Does Health Insurance Work?

Health insurance establishes a legal agreement between you and your insurance provider. Your policy lists various services, such as preventive care and hospitalization, for which you may be able to access financial assistance. Coverage can be purchased on the Health Insurance Marketplace, from an insurance broker or through your employer using a group health insurance plan. In some cases, you may also be eligible for government-sponsored health insurance programs, such as Medicare and Medicaid.

How Much Does Health Insurance Cost?

Health insurance premiums are typically determined by several factors, including the type of plan you desire and its coverage limits and deductible. Your circumstances may also be considered, including your age, who you include in your policy (e.g., spouse or dependents), where you live, and certain lifestyle choices, such as smoking.

Direct costs to maintain your health insurance plan or to receive covered medical services are determined by the following features of your policy:

• Premium—This is the amount you pay regularly (e.g., monthly) to maintain your coverage throughout its term.
• Deductible—This clause establishes a minimum amount you must pay out of pocket in a plan year before your insurer begins helping cover costs. However, some services, such as vaccinations and regular checkups, may be exempt from this requirement and may be covered by insurance irrespective of a deductible.
• Copayments and coinsurance—These are flat fees and percentages, respectively, that you must pay out of pocket for specified services, such as X-rays and surgeries.
• Out-of-pocket maximum (OOPM)—This is the maximum amount you can be charged in a single plan year for covered services. After reaching this amount, your insurance will pay for all covered care for the remainder of the plan year. Generally, the money you spend on copays, coinsurance, and deductible costs all contribute to the OOPM.

Your insurance policy documents explain how these terms apply to your specific health plan. Your agent can help address any questions and clarify when certain expenses may be applicable.

We’re Here to Help

At United Benefits Solutions, we understand that health insurance can be a complicated and even confusing subject. Fortunately, our agents have extensive experience helping individuals and families in the West Rockville Centre area assess their circumstances, identify their coverage needs and retain optimal coverage. Contact us today to get started.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.