Having health insurance is important. However, choosing health insurance can be confusing due to companies offering different types and ranges of products.
If your coverage is non-existing or lacking you can end up with both financial difficulties and mental stress. And even if you have insurance coverage navigating the landscape of insurance jargon can be quite confusing. Before you sign any contract you should pay particular attention to the following:
What is being covered?
The most important thing is understanding the kind of policy you’re opting for. Health insurance falls into two main categories:
♦ Indemnity health plans – you pay a percentage of any medical costs you need and the insurance company pays the rest. You will generally be able to choose your healthcare providers.
♦ Managed care systems – options to pick a health maintenance organisation (HMO) or a preferred provider organisation (PPO).You pay a fixed monthly installment for this option and varies in terms of whether you’re able to choose your doctor or not.
Regardless of which plan you choose you will have to understand what conditions are covered. For example, you might not automatically be insured for care a pre-existing condition might require. The plan might also cover only certain treatments or you might have to opt-in for certain others, costing you extra.
Check for included benefits such as mental health services, dental care and prescriptions.
Knowing your coverage is crucial because it will also impact determining which policy is affordable and which isn’t. You will also always have to make the judgment based on your own specific healthcare needs – your situation is different to anyone else’s and you won’t necessarily find the same plans good for you that your friends like, for instance.
What is the actual cost of the policy?
The real cost of the policy goes beyond what you’re paying for on a monthly basis. These costs can be either a fixed sum or a percentage. Be aware of your deductible, the amount you have to pay before your policy’s coverage kicks in. It tends to be a percentage or fixed amount of annual costs – such as $5,000. This means that when you’re being treated, you need to cover the costs up to $5,000 before the policy provider pays the rest.
The best way to understand the real cost is to compare health insurance companies and calculate the monthly or annual costs for each policy. If you’re finding it difficult to understand contact the provider for a quote and advice.
What happens in the event of claims?
Before you choose your health insurance, you’ll also want to understand how claims happen and what happens if your company disputes your health insurance claim. This is important because you don’t want to start thinking about these things after you’re tied to a specific health insurance company and you need help.
Appeal against a denied claim – Most health insurance companies explain this procedure in the policy and on their website. As mentioned, don’t focus just on making the claim but examine the procedure for appeal against a denied claim. The key here is the understand what are your and the company’s responsibilities as well as the average times for resolving disputes.
When and how can you end the contract?
Don’t ever opt for health insurance without understanding how to get out of it. Be aware of the time period you are committing to, and how the policy is renewed. This includes understanding changes like how and when the company can change its policy offering and cost structure. Make sure you know how to cancel the policy and what, if any, additional costs accrue.
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