Health care insurance helps to protect you from the high cost of medical care in the event of illness or injury. Although you are usually responsible for paying a monthly premium, co-payments and sometimes deductibles as a part of your health care insurance coverage policy, the overall cost of health care insurance coverage is considerably less than paying an entire medical bill out of your own pocket.
Purpose
Health care insurance helps you to pay for medical care. It serves to protect you and your family members from financial burden in the case of an unexpected, costly or serious injury or illness. Further, you are more apt to obtain preventive screenings and routine care if you have health care insurance, reports the Agency for Healthcare Research and Quality and America's Health Insurance Plans.
Features
Most people obtain group health insurance, which is health insurance coverage through an employer or organization. For those that do not have access to an employer's group health insurance plan, they may go directly to a insurance company to purchase individual health insurance coverage. Individual coverage usually costs more than group employer-based health care insurance, according to MedicinePlus. Still other people utilize government-sponsored health insurance programs such as Medicare and Medicaid.
Types
The three main types of health insurance plans are managed care, fee for service and consumer-directed plans, reports PlanforYourHealth.com. Managed care plans offers comprehensive health care to patients who utilize doctors in a participating networks. A fee for service health care plan means that the patient sees his doctor of choice. In fee for service plans, a fee is paid to the physician for each service rendered. In a consumer-directed plan, the patient uses a Health Savings Account or a Flexible Spending Account to pay for covered medical expenses. Any unused money can often be rolled over to the subsequent year to pay for future medical expenses.
Cost
The cost of health care coverage varies by plan. Most plans require a monthly premium, while others also require an annual deductible, which is an out-of-pocket amount the patient must pay before the insurance company picks up the tab. The majority of plans also require patient co-pays for primary care and specialty physician visits. Most plans require the patient to pay some portion of prescription medications. Health insurance premiums and general medical expenses that exceed 7.5 percent of adjusted gross income can be deducted, according to the Internal Revenue Service. For those that are self-employed or use a flexible spending account, a deduction can be taken without meeting the 7.5 percent requirement, according to CNN Money.
Consideration
Health care insurance can be expensive but going without health care coverage can be even more costly. An illness or injury may require extensive medical treatment, which can turn into a large debt and financial burden. When medical expenses are not paid, collection agencies--as well as attorneys--may get involved. Some uninsured people also deal with stress because of the worry of becoming injured or ill without having health care coverage. Health insurance coverage provides peace of mind that any sudden, unexpected or large medical expenses will be taken care of.
References
- Agency for Healthcare Research and Quality and America's Health Insurance Plans: Questions and Answers About Health Insurance A Consumers Guide
- MedicinePlus: Health Insurance
- PlanforYourHealth.com: Health Insurance 101
- CNN Money: Money 101 Lesson 16 Health Insurance
- Internal Revenue Service: Publication 502
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