When it comes to health care, unless you are residing in a country which has a public health care system it is very likely for most individuals and families to take out some form of health insurance to cover the cost of medical expenses in any event that medical care or treatment may be required. This type of private health insurance tends to come in the form of a health care plan, specifically selected and set up to try and accommodate as best as possible to the needs of you and your family. The following article will serve as a brief introduction taking you through a few things that you should know about health care plans and how they work exactly.
Countries such as the United Kingdom that have ‘single payer’ health care systems such as the National Health Service (NHS) tend to have less necessity for individuals to take out private health care plans due to the fact that much of their potential day to day medical expenses are available to them for the cost of nothing. These types of health care systems tend to be run on funding from taxation etc. Similar things can be said for countries that have a two tier medical care system in place such as the Netherlands, France, Hong Kong and Denmark etc. In two tier systems where the more affluent members of the population have the option to pay for an improved, more elite level of health care on top of the free, public service which is also available health care plans are more common. For more information on private health insurance specifically, please see the relevant posts in our blog section.
Insurance mandate systems refer to a situation where the individuals in a population are required to buy some form of health insurance coverage from a number of different health care companies. This is evident in countries such as the United States of America where if you do not happen to be covered by your employer you must select a health care plan to take out from the private health care companies which are available. These three types of health care system are not entirely set in stone as the three potential options. They are merely ‘template’ systems which allow some form of comparison between various countries. The variations from system to system in each country even when looking at one’s belonging to the same template can be vast and you should bare this in mind.
In any realm of health insurance it is rare to have a plan or coverage which sees all forms of medical care and treatments included. If this were available it would simply either be too expensive or put far too much of a strain on the health care service in the specific country. This means that each plan is specifically set up to include some forms of care whilst other types of treatment may be left off. This can refer to specific types of hospital care of treatments for specific diseases etc. All of this simply depends on the plan that you are taking out. Some companies provide health care plans which are more predetermined where it is simply a question of selecting the plan that best fits your needs while other companies provide you the option to have more of a say and ‘build’ the plan yourself i.e. select which forms of care will be included and excluded.
This section will briefly take you through how exactly a health care plan works and operates in the Unites States. The United States has a large number of private health care companies that offer plans which include the following aspects. Health care plans in this country typically include a deductible, a co-insurance fee and an out of pocket maximum fee. It should be noted, however, that not all three of these aspects are included in every single health care plan.
The deductible refers to set sum of money which you will have to pay for yourself before your health insurance plan begins to start covering your expenses. For example, if the deductible was $4500, you would have to pay for the first $4500 worth of health care in a calendar year before your health care plan begins to cover your expenses. After you have paid the set deductible amount any further medical bills will be split between yourself and the insurance provider. This is where the coinsurance comes in. Coinsurance typically sees a set split of the medical costs which is paid out by the insurance company and by you. A common split may by 80/20% with the insurance company covering 80% of the cost while you pay the remaining 20%. The split can vary from company to company and plan to plan and it is something you should definitely be wary of when taking out a plan. Occasionally, the split may be something more like 60/40 or even 50/50 at times which would see you paying a lot more than you may want. Following the co-insured payments the out of pocket maximum fee then comes into play. Once again, this is a set limit. The limit refers to the maximum amount that you will be subject to paying in a single calendar year. Once you have paid this figure the health care plan will cover 100% of your costs until the year ends.
We hope that this has begun to better your understanding of what exactly you may face when setting up a health care plan and the various factors which tend to come along with them. Please visit the rest of our blog section for more information on all things to do with health insurance.