Health Insurance: Understanding What It Covers

Your health insurance policy is an agreement between you and your insurance company. The policy lists a package of medical benefits such as tests, drugs, and treatment services. The insurance company agrees to cover the cost of certain benefits listed in your policy. These are called covered services.

Your policy also lists the kinds of services that are not covered by your insurance company. You have to pay for any uncovered medical care that you receive.

Not All Health Insurance Plans Are Alike And Hence You Need To Check On The Coverage Available For Basic Treatments And Look For Additional Coverage Depending On Your Requirement

Adequate health insurance helps ease the financial burden that arises due to a medical emergency. There are many health insurance plans offered by different insurance companies. However, choosing the right one for yourself could be a difficult task.

Pankaj Arora, MD and CEO, Raheja QBE General Insurance, says, One should opt for the policy that best suits ones needs and provides support in difficult times, such as hospitalization due to injury or illness, etc.

Here are some common exclusions listed as a ready reference for people who want to buy health insurance

Pre-existing Illness

According to industry experts, this point holds true for people who have been suffering from illness before buying health insurance.

Arora explains, If one is suffering from a condition before they purchased the policy, it is not covered on day one of the policy coverage. Such cases are known as pre-existing conditions and are generally covered only after a waiting period of 2-4 years or more depending on the type of disease and its risk

Pregnancy and Childbirth

Conditions related to childbirth are not included in a general health insurance policy. This includes pregnancy and conditions arising out of it, abortion and any treatment which arises from or traces back to pregnancy.

Cosmetic Surgery

Dental Coverage

Hearing and Vision

The Average Cost Of Health Insurance By Plan Types

There are four types of health plans you can choose on the Marketplace, with varying degrees of flexibility and cost:

• Health Maintenance Organization : HMOs tend to have lower premiums but require you to use a specific set of providers and get referrals to specialists for covered services, except in emergencies. Silver HMOs average $473 per month.
• Exclusive Provider Organization : Somewhere between an HMO and a PPO, EPOs typically require that you use the health plans in-network providers, but you dont always need referrals to see specialists. EPO Silver plans average $508 per month.
• Preferred Provider Organization : PPOs tend to be more expensive than HMOs but typically offer a broader range of providers. You usually dont need to get a referral to see specialists for covered services. On the Marketplace, Silver PPO plans have an average premium of $517.
• Point of Service : POS plans tend to be the most flexible at an increased financial cost. You can usually get care outside of the health plans provider network, though youll likely pay more for those services. POS Silver plans have an average monthly premium of $534.

Average Health Insurance Premiums by Plan Type – Silver Plans

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• $534

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What Is Permanent Exclusion In Health Insurance

Health insurance covers medical costs such as diagnostic tests, doctors’ consultation, bed charges on hospitalization, and medical fees. Health insurance is said to reduce the financial burden of medical emergencies or regular medical expenses. Health insurance also provides financial security at the worst times. Therefore, an investment in health insurance is considered to be a wise decision.

It is always a must to note that the health insurance policy also comes with specific exclusions, just like other insurances. There are generally four kinds of health insurance exclusions. Permanent exclusion tops the list. Permanent exclusions in health policy are listed categories of treatments that are never covered in the health insurance policy for the whole life. They are excluded permanently from the scope of health insurance. They are always clearly mentioned in policy documents under ‘Permanent Exclusions.’ Other than a few treatments, there are also some drugs or some surgeries under which permanent exclusions in health insurance are listed.

Even before buying the policy or signing the policy document, which confirms stated terms and conditions, one can read all the policy documents where all permanent exclusions in health insurance are stated. Most companies have a list of illnesses listed under this section.

Prevalence Of State Insurance Mandates

Most mandates apply to employer-sponsored health insurance coverage, although nongroup mandates also exist. There were few statutes until the 1970s when the number of laws began to proliferate. Although they only consider provider and service mandates, Laugesen et al. reported that of nearly 1500 state mandates enacted between 1949 and 2002, 12% were enacted in the 1970s, 25% in the 1980s, 39% in the 1990s, and another 16% in the first 3 years of the 2000s.

The Council for Affordable Health Insurance annually compiles a listing of all state health insurance mandates . Their 2010 edition reports the presence of 2156 mandates. The states display considerable heterogeneity in the number of mandates they enact. Idaho and Alabama have the fewest mandates with 16 and 19 provisions, respectively. Four states each have more than 60 provisions. Table 1 reports the most common mandates by category.

Table 1. Most prevalent health insurance mandates, by category

A. Dor, E. Umapathi, in, 2014

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Example Of Cost Structure

Assume you need gallbladder surgery that has covered costs of $30,000 and the following are your health insurance figures:

Deductible: $1,500

+ $40 co-pay for two post-surgery prescriptions

+$1,500 deductible

-$5,000 your maximum out-of-pocket

$2,240 the amount over your maximum which your insurer pays

Your maximum out-of-pocket amount for the year is $5,000, so all expenses related to the surgery above $5,000 are paid by your insurance coverage. In addition, your insurer will pay any covered medical expenses for the rest of your plan year.

The Average Cost Of Health Insurance By Plan Types And Metal Tier

The type of health plan and the level of coverage you choose impact how much youll pay for health insurance.

For example, you might be willing to pay more for easier access to a broader range of providers, such as through a Preferred Provider Organization or Point of Service plan. Or, you may opt for less flexibility with a Health Maintenance Organization or Exclusive Provider Organization plan but score lower-than-average premiums.

Another thing to consider is how much of the cost of care your insurance covers. Different metallic tiers dictate how much of your health care expenses your plan will cover compared to what youll pay in premiums. As youd expect, the more a plan covers, the higher your premiums will typically be.

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Costs And Payment Options

Short terms plan are typically not renewable are offered on a daily rate, allowing thepurchaser to buy coverage for the exact period of time needed and help keep your overallcost down. If you plan on traveling to the United States and are under the age of 30 youcan purchase a plan for as low as$38 a month.

If you need an insurance plan for a year or less, view our Atlas Travel plan . If you need short term coverage for alittle longer, our Patriot Travel plan can be purchased up to two years and provides similar benefits.

Check The Sum Insured

Many insurance providers have a limit on the maximum sum insured you can choose. If you’d like a high sum insured, you need to find a health policy that offers you what you’re looking for. A good rule of thumb is to get cover that is a minimum of six times your salary. If you earn INR 1 lakh per month, look for a policy that offers at least INR 6 lakhs as the sum insured. You should also look for other benefits. If you’re planning on starting a family in a few years, make sure maternity costs are covered. Of course, you will have to check the waiting period as maternity benefits are subject to slightly longer waiting periods.

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Helps Deal With Rising Medical Costs

People purchase health insurance policies to safeguard their finances against ever-rising medical costs. An accident or medical emergency could end up costing you more than a few thousand rupees. With a medical insurance plan, you enjoy cover for everything from ambulance charges to daycare procedures, making it easier for you to get the care you need to recover.

Advantages Of Critical Illness Riders

Critical illness health insurance policies are your best bet against life-threatening diseases or ailments. With the extensive cover provided under this plan, even treatments lasting for months can be potentially compensated in full if the sum assured is sufficient. Key advantages are:

• Tax benefits under Section 80 of the Income Tax Act.
• Lumpsum amount to be paid at the end of the waiting period, which may be used any way the insured wants to.
• Easy documentation for making claims.
• Wide range of options for sum assured, premium, and policy tenure.
• Additional riders can be bought as per company policy.
• Hassle-free claim settlements once all documents are received by the insurer.
• Pre-hospitalization expenses covered up to 30 days before getting admitted in a hospitalization.

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What Is Generally Covered Vs Not Covered

In general, health insurance will cover any treatment deemed medically necessary to prevent or treat sickness or injury. It typically does not cover elective, cosmetic, or experimental treatments.

Most health insurance plans do not cover 100 percent of the total cost of any treatment, with the exception of preventative care. There are three main areas of out-of-pocket costs that you may have to pay, including:

• Deductible. This is the amount you have to spend for covered health services before your insurance company pays anything.
• Copayments. This is a flat dollar amount required for you to pay a provider at the time of service. For example, your plan may dictate you pay $40 for every regular office visit.
• Coinsurance. This is a percentage of the total cost of a providerâs bill that you will be required to pay. For example, your plan may state that it will cover 80 percent of a certain treatment, meaning you must pay the remaining 20 percent.

In addition, policies typically have an annual out-of-pocket maximum, which is the most you would have to spend for covered services in a year. After you reach this amount, the insurance company pays 100 percent for covered services.

Fortunately For Both Those Affected And Not The Typical Policy Does Cover This Type Of Damage

According to a spokesperson for the Insurance Information Institute, Michael Barry, wildfire is among the forms of destruction or damage from fire that are typically included among the covered perils of most homeowners insurance policies. He went on to say that beyond the structure itself, personal possessions within the building and temporary housing during the time that the repairs or rebuilding are completed are also covered.

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How Much Does Comprehensive Health Coverage Cost

The overall cost of a health insurance policy includes premiums and cost-sharing.

A premium is an amount that people pay each month for health insurance coverage. A premium is the cover charge for having health insurance coverage. You are responsible for this expense whether or not you visit a doctor or use any other healthcare service.

Premiums vary significantly from plan to plan. According to the Kaiser Family Foundation , the 2020 average premium for employer-provided coverage for a single employee was $7,470. Of that total, the average worker share was $1,243 and the average employer share was $6,227 .

KFF reported the average 2021 premium for marketplace individual plans by metal rating: $328/month for Bronze plans, $470/month for Silver plans, and $501/month for Gold plans. But those are before premium subsidies are added into the mix .

In 2021, before the American Rescue Plans subsidy enhancements were applied, 86% of all marketplace enrollees nationwide were receiving premium subsidies, paid directly to their insurers on their behalf. While the average full-price premium amounted to $575/month, the average subsidy came to $486/month covering the large majority of the average total premium.

KFF also reported deductibles for marketplace plans: The average 2021 deductible was $6,921 for Bronze plans $4,816 for Silver plans and $1,641 for Gold plans, and $0 for Platinum plans .

Skin Cancer As It Is Covered By Health Insurance

If you already have skin cancer, it will be covered under the pre-existing diseases section of your health insurance policy when you purchase it. In such case, you will be unable to make any claims against your health insurance coverage for a period of time, often one to five years.When skin cancer is not the result of a pre-existing disease, the waiting period might last up to two years. If you make a claim for skin cancer benefits under a critical illness coverage, the waiting period is reduced to 90 days.

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What Does The Plan Cover

One of the things health care reform has done in the U.S. is to introduce more standardization to insurance plan benefits. Before such standardization, the benefits offered varied drastically from plan to plan. For example, some plans covered prescriptions, others did not. Now, plans in the U.S. are required to offer a number of “essential health benefits” which include

Emergency servicesPreventive services and management of chronic diseasesRehabilitation services

For our international population of students who might be considering coverage through a non U.S. based plan, asking the question, “what does the plan cover” is extremely important.

How Health Insurance Works

Like every kind of insurance policy, health insurance also helps you deal with the financial repercussions of an accident or emergency. Let’s take a look at how health insurance actually works. The process starts when you apply to purchase a plan. Depending on your age, medical background, sum insured required and the type of plan youve selected, you will be provided with premium quotes. In some cases, you might be asked to do a few medical tests before the insurance provider decides whether they’d like to provide you with the required cover. Once the terms and conditions are finalised, you will be provided with a policy. Each policy comes with a few waiting periods. The initial waiting period is only for a few weeks or a month. During this time, you will not be able to make any non-emergency claims. Let’s say that you require some kind of surgery after the waiting period. If you’re able to get the treatment in a network hospital, you can let us know about the surgery, and we’ll get in touch with the hospital directly to settle all the payments. When you’re discharged from the hospital, you will only have to pay for additional expenses that are not covered and the voluntary co-pay amount, if any. If you’re getting treatment in a non-network hospital, you can make all the payments and then file for a reimbursement claim. Either way, you can get the treatment you require without fretting about burning a hole through your pocket.

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Who Is Major Medical Insurance Right For

Major medical coverage is a good choice for nearly anyone who wants to minimize expenses for preventative care, emergency services, and management of chronic conditions. These comprehensive plans are the best way to cover a full range of your daily medical care, while ensuring any unexpected medical needs do not create a significant financial concern. Although these plans will not cover every medical service, they will provide coverage for the widest range of services and care.

Family Floater Health Insurance

A family floater plan allows you to cover your family members under a single policy and everybody shares the sum insured amount. These plans are typically more affordable than individual plans since the sum insured is shared. Let’s say you purchase a family floater plan for you and your spouse with a sum insured of INR 8 lakhs. In a single policy year, you can make claims worth only INR 8 lakhs. Your spouse may make claims worth INR 6 lakhs and you could make claims worth INR 2 lakhs or vice-versa. Typically, family floater plans are ideal for young nuclear families.

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The Average Cost Of Health Insurance For Job

The health insurance marketplace is just one way to get health insurance coverage. According to the Kaiser Family Foundation, most Americans get health insurance through a job or from the government via Medicare, Medicaid or military benefits.

Job-Based Insurance

In 2021, the Kaiser Family Foundation reported that the total cost of family coverage through employers averaged $22,221, with employees paying $5,969 of that. Individual deductibles averaged $1,669, though employee costs vary by type of plan, family or individual coverage and size of the company.

Medicare

Medicare is the government-run insurance program that covers nearly all Americans 65 and older. Original Medicare also known as Medicare Parts A and B covers hospital stays and medical care, respectively, and has set costs. Most people pay no premium for Part A but do pay a deductible and coinsurance, or a share of costs for longer-term facility stays. Part B premiums are $170.10 per month , and the 2022 Part B deductible is $233. Once you meet that deductible, you typically pay 20% of the bill for Medicare-approved charges.

Some Medicare enrollees choose to get prescription drug coverage or join a comprehensive managed care plan that combines all their Medicare benefits . Parts C and D are optional. Offered by private companies, costs for these coverages vary by carrier, plan and geography.

Medicaid