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Thursday, October 10, 2013

Health Insurance 101: How to Understand Health Insurance Plans

Now that Obamacare is in full swing, millions of people are able to shop for affordable health care insurance. With the health exchanges open for business, consumers are flooding the Internet shopping for health insurance. New York's health insurance exchange had 2.5 million visitors within the first half hour, and California had 16,000 hits a second.

For many, this is the moment they have waited for, to get health insurance protection they can afford. But shopping for health insurance can be a daunting task. Here are some terms and health insurance descriptions that might make shopping easier.

Premium: A premium is the amount you pay every month for your insurance plan.

Deductible: A deductible is the amount you pay first before the insurance company begins to pay their share. It works very much like the deductible on your auto insurance. Health insurance deductibles can be anywhere from $250 up to $2,000. Generally, the higher the deductible, the lower the monthly premium. But remember, this is what you will have to pay when you actually use your health insurance, so make sure it is an amount you can afford.

Co-payment/Co-insurance: Once you have met your deductible, each time you visit your doctor, there is an amount of the bill for which you are responsible. For example, you may need to pay $25 for an office visit. But, that office visit could have been $150 or more without health insurance. No matter, $25 is all you pay. Or, in the case of co-insurance, it might be stated as a percentage, like 20 percent. Some providers will expect it to be paid up front, while others will bill the insurance company, and the insurance company will send you a statement showing what you owe.

Insurance is vital in order to protect yourself from huge medical expenses. For example, if you lived in California and had to have your appendix removed, the cost would be around $33,000. Open heart surgery can cost $150,000 or more, depending on where you have it done. Most people cannot afford an expense like this. So, think of premiums, deductibles, co-payments and co-insurance as small prices to pay for having health insurance coverage.
DISCLAIMER: The content or opinions expressed on this web site are not to be interpreted as medical advice. Please consult with your doctor or medical practictioner before utilizing any suggestions on this web site.