The laws, rules, and benefits surrounding health insurance can be extremely confusing. Most health insurance programs will cover a wide range of things including medical care, hospice treatment, and prescription drug costs, but a lot of people wonder if it will cover their disability expenses as well. This article covers the difference between disability insurance and health insurance.
Disability Insurance and Health Insurance
The difference between disability and health insurance is that disability insurance qualifies the individual for payments that cover what they would be making if they were still able to work while health insurance pays for medical costs. Both kinds of insurance require the insured to pay premiums. Disability insurance does not pay for the actual hospital care and medications required by the disability; it only covers cost of living expenses up to a certain point. Disability insurance is different from workman’s compensation, which covers medical costs incurred by an accident while on the job.
The Cost of Disability Insurance Compared to Health Insurance
Health insurance is notoriously expensive for Americans. The monthly premiums can be several hundred dollars, and this is coupled with co-pays and costly deductibles. Disability insurance, on the other hand, has a relatively low monthly premium, which is the only required expense monthly. The difficulty arises in the waiting period for benefits. A disabled individual may have to wait 90 days before seeing any tangible benefits or payment. This waiting period can be shortened or eliminated completely for many policies, but there will be a higher monthly premium.
What Health Insurance Covers
Health insurance deals with any actual medical expenses incurred, whether for a disabled person or otherwise healthy individual. This includes doctor’s visits, hospital stays, prescription medications, and anything else that involves direct medical care. Actual coverage varies from policy to policy, so it’s important to check with your health insurance provider to make sure that they will cover anything that you might need. There is usually a co-pay for doctor visits or outpatient procedures which is typically between $5 and $25. Premiums are much higher than those for disability insurance.
What Disability Insurance Covers
In most cases disability insurance will cover up to 80% of the individual’s wages during the time that they are unable to work. Some disability insurance providers will set the payout on a monthly basis while others will pay based on a daily working average. The waiting period before benefits are provided is referred to as the elimination period. Any time there is a pre-existing condition present there is a good chance that disability benefits will not be paid. The same thing might happen if an injury occurs on the job site, which is covered by workman’s compensation.
It is important for people to know the difference between disability insurance and health insurance so that they do not have incorrect assumptions about coverage. Knowing that health insurance will not cover most disability expenses can save a lot of surprise and headache in the event of an accident.