qWHY DO I NEED HEALTH INSURANCE? Anyone can fall ill or meet with an accident at anytime. With the ever increasing cost of health care, it is prudent to have health insurance. It will not only save you a lot of money when you fall ill but also give you peace of mind. Health insurance makes health care affordable to one and all. WHAT IS AN INSURANCE BROKER? There are many companies providing different kinds of policies. Different policies suit different people, depending on one’s occupation, health condition etc. This is where an insurance broker comes in. A typical insurance broker is an independent agent who works with a number of insurance companies. His job is to choose, in consultation with you the client, the very best policy from the different options of the different companies available. In addition to choosing policies he is also responsible for settling claims. Usually an insurance broker works on a commission basis. The commission is paid by the company. WHAT ARE THE DIFFERENT TYPES OF HEALTH INSURANCE? There are different kinds of health insurance plans available. You can choose one depending on your needs. 1. TRADITIONAL HEALTH INSURANCE PLANS (fee-for-service coverage)-Traditional plans are the costliest of all plans. However they are also the most flexible. Here you have the flexibility to choose the doctors, hospitals or the providers. In traditional plans, either you pay up front to the service provider and later claim the amount from the insurer or more commonly the service provider claims directly from the insurance company. However, these plans usually come with a deductible. That means you have to pay an initial agreed upon amount. After the initial deductible, the insurer usually pays about 80% of the rest. For example if the total bill is $1000 and the deductible is $200, you have to pay the $200 and usually 20% of the remaining $800. 2. HEALTH MAINTENANCE ORGANIZATION (HMO) – In this plan your health is taken care of by one primary care physician that you choose. He takes care of your annual examination, minor health problems and also immunization. However, if you need to see a specialist or need investigation, your primary care physician will have to refer you to the proper facility. Even here, your primary care physician refers within the network. In this way unnecessary cost is cut, resulting in a low premium to the participant. 3. PREFERRED PROVIDER ORGANIZATION PLAN (PPO) – Unlike HMO’s, here you can choose to go to other network providers. However, you will have to pay a little higher when you take service outside your network. Also if out of network facility charges more than the in-network services, the insurer will only pay in-network charges. You will have to pay the difference. The advantage of this plan is during emergencies, when your in-network service provider may not be easily accessible. 4. POINT OF SERVICE (POS) – In this, you the insured like in HMO choose a primary physician. However, unlike in HMO, the chosen physician can refer you to out of network specialists. If you see a specialist without being referred from your primary physician, you may or may not get the claim. 5. CATASTROPHIC INSURANCE PLANS – This is a good one to consider if you are generally healthy. Here you pay for most of the routine health needs. As the name suggests, the company pays only when something catastrophic happens to your health. WHAT WILL HEALTH INSURANCE COST ME? It all depends on what kind of policy you take, your age, the diseases you want covered and your health condition. While catastrophic insurance plans and health maintenance organization plans are the cheapest, the traditional health insurance plans are the costliest. Group health insurance which is available through employers usually works out to be pretty cheap. HOW OFTEN DO YOU PAY FOR HEALTH INSURANCE? The health insurance is usually paid monthly. But there are other options available depending on the provider. WHAT IS A DEDUCTIBLE? A “deductible” is the amount of money you have to pay each year before the insurance company comes in the picture. The more the “deductible”, the lesser the premium. For example if your deductible is $200, you have to pay the first $200 you spend on health for that year. If there is a need for anything more to be paid, the insurer steps in and pays the rest. Usually traditional insurance plans and PPO have a deductible while HMO plans do not. WHAT IS A CO-INSURANCE? This is a plan where the health cost is split between you and the insurance company. The more you pay, the lesser the premium. The split can be 80/20, 70/30 or so on. If it is 80/20, you pay 20% of the cost and the insurance company pays 80%. Usually a co-insurance comes in to play after the deductible amount is exhausted. For example if you take a policy with $200 as deductible and an 80/20 split co-insurance, you have to pay the first $200. After the first $200 if the bill comes to $1000, you will have to pay a further $200 of the bill. WHAT IS MEDICARE? Medicare is a federally funded health insurance program. It caters to the health needs of Americans over the age of 65 and also people with certain disabilities. The medicare part A is free and covers hospital stay and such. Medicare part B covers outpatient visits and such. The medicare part B requires you to pay a premium of about $96. It also has an annual deductible of about $135. WHAT IS MEDICARE SUPPLEMENT INSURANCE? Medicare supplement insurance is a policy that helps pay some costs that the medicare excludes. There are a total of twelve standardized medicare supplement insurances from A through L. When you buy a supplement insurance policy you should have medicare part A and part B. The medicare supplement insurance, offered by different companies differ very little, if at all. So it would make better sense to go for the cheaper policies. WHAT KINDS OF SERVICES DOES THE HEALTH INSURANCE COVER? What services a health insurance covers depends greatly on the type of insurance selected. Generally all policies cover emergency services, admissions and treatment during admission. It is very important to understand your needs before taking a policy. This is where the insurance broker comes in. DOES HEALTH INSURANCE COVER DENTAL OR VISION? Most health insurance typically does not cover vision and dental. However there are many health policies that offer these as a supplement and charge extra premiums for the same. There are also a few companies that offer a stand alone dental and vision plan. DOES HEALTH INSURANCE COVER PRESCRIPTION DRUGS? Although most insurance covers a few prescription drugs, none cover all of them, especially the expensive ones. Just check the plans formulary to see if your drug is in the list. If not, a generic equivalent, which is much cheaper, may be present in the list. Also know that certain policies cover no drugs at all.