There are several main parts to health insurance, and policies differ mainly on their combinations and amounts for each of them.
The main difference in type of policies is determining which health care professionals your insurance will cover.Deductibles: A deductible is how much you have to pay “out of pocket” for medical services each policy year before the insurance will begin their coverage. This amount resets at the beginning of each term regardless of whether or not you have used the full deductible for the current term. This amount can easily vary anywhere from zero to a couple thousand dollars. For example, each individual in a three person household could have a $500 deductible, but the total the family would have to pay before coverage starts may only be $1000. Policies with less of a deductible will generally cost more.
Co-Pays: Sometimes instead of a deductible, a policy will use co-pays. This is a set amount you pay for a particular service no matter what the normal fee would be. It is paid each time you use the service, regardless of how many times you use it in any given period of time. For example, a doctors office visit could cost a flat $15 fee per visit, whether you go once or twenty times in a year. Co-pays are often required to be paid at the time the service is performed.
Prescriptions: Most health policies cover prescription costs in one way or another. Some use co-pays based on the type of medicine. For example, any name brand drug would be $20, but generics are always $10, and this is the amount you pay no matter how many times you fill a prescription. Others may use deductibles after which the insurance will cover all, or a percentage of, the cost of any additional prescriptions.
Pre-existing conditions: Some insurers will not provide insurance coverage for a particular medical condition if you have recently received, or are currently receiving, treatment for it, or they may place a time limit on when it could be covered. Most often it is a generic statement along the lines of “Any condition for which you have been diagnosed or sought treatment of in the past year will not be covered by insurance for 12 months”. Some long term conditions, such as diabetes, may be excluded entirely from coverage if pre-existing.
Overall coverage: Another major difference between insurance policies is their limits on what services they will cover and what percentage of them they will pay.Mental health services, birth control, pregnancy, cosmetic surgery - these are a few examples of things that some policies cover and some do not, or some may require you to pay extra for that kind of coverage. Always review your choices of policies carefully for these types of exceptions. You or your spouse may not be pregnant now, but if the possibility is in the near future, you should be clear as to what adding that coverage would cost, and what kind of time frame is required for it. Some policies may say that they will not cover certain conditions, such as pregnancy, for the first year after the policy takes effect.
Coverage amounts for health insurance policies are usually given in percentages with the amount you pay called the co-insurance, and this amount often varies for different types of services, and may even rise in stages. For example, a policy may have a $75 co-pay for emergency room services after which they pay 100% of the cost, but for hospitalization there is no co-pay, there is simply a co-insurance of 20% of all charges up to $2000 after which the insurance coverage pays 100%. Or seeing your family doctor may be a $20 co-pay, but making a visit to someone classified as a specialist could cost $50.
How is my premium determined?Traditional policies allow the patient to visit any health care provider they wish at any time they wish. Because of this flexibility, these types of policies will cost more.
PPOs (or Preferred Provider Organizations) have a network of health care providers who have agreed to accept specified rates of reimbursement from the insurance company. If the physicians normally charge more than those rates, they agree not to bill the PPO patient the difference. The patient chooses one of these networked physicians as their Primary Care Physician (PCP), however patients have the option of choosing to go to out-of-network physicians. Out-of-network physicians are not bound by the network rates, and can bill the difference to the patient. Patients can also visit specialists of any kind with the coverage based simply on whether or not the specialist is in the network, just like a regular physician.
HMOs (Health Maintenance Organizations) are similar to PPOs in that they have a network of health care providers who have agreed to accept specified rates of reimbursement from the insurance company. With an HMO however, patients must stay within this network for any insurance coverage. Visiting an out-of-network provider means that the patient is assuming 100% of the cost. Also, with an HMO, the patient's chosen Primary Care Physician (PCP) will provide references to in-network specialty providers when additional specialized care is required. If the patient visits a specialist without this reference, the insurance will not provide coverage.
The amount that you are going to pay for your health insurance varies based on a lot of different factors beyond just the type of policy itself. Are you obtaining insurance as a group through your work or are you looking for individual insurance? Are you covering yourself or your entire family? Your age, current and past health conditions, and even your type of employment can also factor into your cost. There is no standard health plan or premium, as much as it would make things easier if there were. The only accurate way to know the type of cost you could expect is to have an insurance professional generate a quote for you from a variety of companies based on your specific situation.
What is the application process for health insurance?Once you have decided which type of policy you'd like and have chosen a company you'd like to use, it's time to apply. The application process is a fairly simple one in most cases. In general, you can expect to be asked questions about your medical history, your current health status, your type of employment, and whether or not your immediate family has any major medical conditions, in addition to the basics of your age, whether or not you use tobacco, etc. Your physician may also be contacted to provide copies of your medical records.
Some insurance companies will ask that you send one month's premium payment along with the application. Others will wait until you have been accepted and request it at that point. In general though, you will be required to pay at least the first month prior to coverage beginning.
How long does the application process take?This will vary depending on the plan you select, however on average you usually will hear back within two to three weeks. The process could take longer if additional information and/or medical records are requested. Being very detailed and honest on your application form will help the process.
When will coverage take effect?Unlike some other types of insurance, health insurance cannot be bound for coverage immediately. Your application for coverage will go through an underwriting process and does need to be approved by the insurance company you are applying with. With some plans, coverage can only be started on the first of the month - with others you may be able to specify a requested effective date on or after the date you sign your application.
