Even if you are healthy, you could be caught off-guard by an unexpected illness, injury, or serious accident. Health insurance can help limit your out-of-pocket costs to protect you against the financial risks of overwhelming medical expenses. Health insurance typically has benefits that include doctor’s visits, hospitalization, professional services, emergency room, maternity, prescription drugs, preventive care, mental health care, chiropractic care, and more.
The costs of today’s medical care can quickly add up to a staggering financial loss. Here are some average billed charges for hospital services:
$9,000 – an average day in the hospital
$45,000 – surgery and follow on care for a burst appendix
$45,000 – knee ligament surgery and follow on care
$1,400 – annual retail cost of Lipitor
$2,000 – average emergency room visit
Health Care Reforms Taking Effect in 2014
There is a lot of confusion about the health care reforms as mandated by the Affordable Care Act for plans that went into effect on January 2014. All non-grandfathered health plans will be required to have 10 Essential Health Benefits, or EHBs. The Kaiser Family Foundation has produced an excellent short video designed to educate consumers about the current and future changes to their health care.
Some Basic Information You Should Know Before You Buy
- Health insurance is a contract between you and the insurance company where the health insurance company agrees to provide coverage for a fixed monthly price (premium).
- Premiums vary depending on the types of coverage, your age, the number of people in your family, and your medical condition.
- The health insurance company pays your health care provider for your health care services while you pay a fixed amount (copay) or a fixed percentage (coinsurance) of the total bill for services.
- Many high deductible health insurance policies require that you pay a fixed amount for certain services (annual deductible) before they begin paying for your services.
- Most health insurance policies limit the annual amount you would be required to pay for services (annual out-of-pocket maximum).
- Health insurance usually provides either direct payment or reimbursement for expenses associated with illnesses and injuries.
- The cost and range of protection provided by your health insurance will depend on your insurance provider and the particular policy you purchase.
- If your employer does not offer group health insurance, or you do not qualify for it, you may wish to purchase health insurance on your own.
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