Health insurance is one of the initial things that a person thinks about when entering a hospital. Individuals would like to keep their hospital bills as small as possible. People usually think about their balance as it concerns their financial needs to fulfil other obligations. People opt to get health insurance that partially or completely pays for their bills.
Although technology has reshaped the world in every sector, including the medical field, in medicine, advancement in technology has also given rise to the cost to use or benefit from the machinery. People prioritize their health even if the tests or procedures are experimental. This means they are flexible in spending, which gives rise to their hospital bill.
Those who wish to go for a routine checkup spend thousands of dollars carrying out tests recommended by their doctor. For some of these tests, the individual must be admitted to the hospital for better care and supervision. This means the person would have to pay for the expense endured. It also means that the person would be set back a few thousand dollars, directly impacting their financial situation.
At these times, people think about getting a health insurance policy that would cover the cost that they will endure. A comprehensive health insurance policy will help the person save money. Moreover, it will prevent their income from spending more than what is justified. Everybody likes a discount or savings that may help them financially. Health insurance is the answer to such questions which arise in individuals’ minds.
This article will look at the basics of health insurance and discuss what is covered under this policy and the exemptions of health insurance. We will further evaluate the overall cost a person would need to pay to buy a health insurance policy. The guide will discuss the importance of health insurance and its effect on people. We will also enlist the factors a prospective policyholder should consider before purchasing health insurance. We will also cover the best health insurance companies in the industry. A FAQs section will be added to answer some general health insurance questions.
Let us talk about the fundamentals of health insurance.
What is Health Insurance?
In the first section of this guide, let us cover the basics of health insurance. Health insurance is a contract where the insurance provider agrees to pay some individual’s medical bills. The individual would need to pay the insurance provider an annual fee called an insurance premium in exchange. The premium can be paid in monthly instalments.
Health insurance is a financial plan that will prevent a person from going into a financial crisis when they come across some emergency like surgery or a medical procedure that is not cost-effective. Different people have various reasons that motivate them to get health insurance. Some people have ongoing health and medical issues that constantly require medical facilities to take care of them. Others like to think long-term and buy health insurance because they are precautious about the future. So they buy a health insurance plan that covers their financial needs if they require it.
Not having health insurance poses a great risk to one’s health and financial conditions. People cannot fully care for themselves when they are not assured or under-assured. The reason is that they would fail to get the right treatment that would make them feel better just because they cannot afford it. As a result, people would risk their health, in which case there is nothing a health insurance company could do to help them.
Those individuals who have medical insurance would go to see the doctor because they are well aware of what it would cost them, how the cost will be covered and how beneficial it would be for their health. The probability of people in this situation getting the treatment they need is relatively higher. Policyholders would like to follow up with the doctor and the procedures advised to better their health. Financial experts say that policyholders tend to catch their health issues before turning them into a bigger problem. With the necessary prescribed medicine, they can improve their health.
Let us discuss the different items covered under a health insurance policy.
What Does Health Insurance Cover?
Health insurance is responsible for covering the expense of medical, prescriptions, and any surgical services like the doctor’s fee. If the person gets sick, it will cover all the relevant costs under the agreed policy. The insurance also provides preventive coverage designed to prevent a person from going to the hospital. Some items under preventive coverage would include paying the cost of all vaccines and wellness checkups with the doctor.
Different insurance companies have several health insurance policies with various terms and conditions. So, the insurance policies cover the cost of maximum prescription drugs and medical-related equipment and services.
If a person has met an accident, the health insurance policy will cover their treatment and related expenses. Under this circumstance, the policyholder will receive a lump-sum amount that can be used to pay for out-of-pocket bills. In some situations, it is not enough, but it still helps alleviate some of the policyholder’s financial burdens.
Let’s talk about the exemptions of a health insurance policy.
What does the Health Insurance Policy Will Not Cover?
In the previous section, we covered all those items that are covered under a health insurance policy. Here, we will look at the exemptions under health insurance. Let’s get to it!
Health insurance policies by the insurance companies have a certain limitation which means that they will not cover the cost of treatment or medication if any one of the following is the case:
Illnesses due to substance abuse
If a person is hospitalized or needs treatment at the hospital related to a substance or drug abuse, the insurance company will not agree to cover its cost. Substance abuse can appear in different formats. It may include excessive smoking, alcohol consumption, and using drugs that are bad for health. If the hospital’s medical records show any signs of substance abuse, the claim to reimburse for medical treatment will be denied.
Treatment at home
If the policyholder is treated at home and not at the hospital, then the claim to cover the cost will not be approved as it stands void. However, some policy providers provide health insurance even if the person is treated at home. But the insurance coverage for it is relatively less. Most elderly choose to get health insurance to be treated at home because it is difficult for them to move to the hospital.
Certain drugs and medications
Certain prescriptions are not enlisted in the insurance policy to treat critical illnesses like cancer. These unlisted prescriptions would include chemotherapy drugs that the patient would need to take orally. In addition, the prescriptions enlisted under immunotherapy are not covered by the insurance policies. Moreover, certain injections fall intra-artery and intralesionally, not covered by a health insurance policy.
New or advanced treatments
If a specific treatment is only experimental and not proven by the scientific community, like robotic surgery, it will not be covered under the insurance policy. Even stem cell therapies are not part of most insurance policies terms and conditions. The insurance provider will not cover any other unproven surgery or treatment.
Any insurance policy will not cover all non-medical expenses such as toiletries. Such expenses come under personal hygiene, so individuals should pay for them from their own pockets. Hence, the insurance company will not be liable to pay for such items.
Pre-existing illnesses are those that the person has endured before purchasing a health insurance policy. Under this situation, the individual is not qualified to ask the insurance company to pay for the costs incurred for something that existed before. Hence, policyholders are not eligible for a claim. However, some health insurance companies do allow covering for pre-existing illnesses, but only after a certain lock-in period has ended.
Let’s discuss the cost structure of a health insurance policy.
How Much Does Health Insurance Cost?
The cost of health insurance is dependent on several factors. These factors either increase or decrease the overall cost that the person would need to pay to the insurance providers. Each company has its cost structure plan, but all the expenses directly come down to the following factors. They include:
Age of the Policyholder
Each individual who signs up for the health insurance policy pays a premium each month. This premium amount is also known as an annual fee that the individual would need to pay to keep their policy active. The premiums are calculated depending on the age of the policyholder.
Younger people would need to pay far less than older people. The reason is that young people are healthy and have no health issues. Whereas older adults have health and illness problems, they are charged more. Financial experts believe that older people have to pay three times higher than younger people to purchase health insurance.
Location of the Policyholder
The place where a person resides directly impacts the premiums they will be asked to pay to the insurance providers. The place would speak about the individual’s living conditions, style of living, quality of life, etc. Each state has a different set of laws that would be considered before agreeing on a premium amount.
People who ingest substances like tobacco will be charged more on the premium than those who do not smoke. Financial experts say that smokers will have to pay 50% extra of the premium because they are in a continuous chain of risky policyholders.
Seeking Coverage as an Individual or for a Family
The insurance providers have to evaluate whether the person would be applying as a stag or with their family. In both cases, the premium amount is different from one another. As a family, the premium amount will be more as more family members get the health insurance coverage they need. However, if only one person wanted to buy a health insurance policy, the premium would have been relatively lower.
There are different types of plan categories that a person chooses from depending upon their wants and needs. These plan categories correspond to the life insurance policy a person would like to sign-up for. The plan categories include bronze, silver, gold, and platinum, from which the individuals would need to select the insurance policy that fits them best.
These categories will assign the cost breakdown the policyholder would need to pay to the insurance provider. For instance, the bronze category has the lowest monthly premium and higher out-of-pocket costs. In contrast, the platinum package comes with the highest monthly premium and lowers pocket costs.
Let us discuss the reasons why people should get a health insurance policy.
Why is a Health Insurance Most Important?
The previous section discussed the factors that directly impact a person’s cost to buy a health insurance policy. Here, we will discuss why anyone should have a health insurance policy. Let’s get to it!
A list of reasons will compel a person to get a health insurance policy by being aware of its importance. They include the following:
The major health insurance companies have connected with the popular hospitals and medical centres under their network to provide services to people with numerous options. A policyholder would need to show the hospital admin the health insurance card, leading to them filling out some forms as a formality. The policyholder would not need to pay anything as the insurance company will handle the relevant costs related to the treatment.
Some policyholders would like to see a particular doctor that works in a hospital that is not under the insurance company’s network. Under such a situation, the policyholder would have to pay for all the expenses endured during the treatment and file a claim for reimbursement.
Hence, the policyholders would not need to pay a single dime with cashless treatment as the insurance company will cover it. Moreover, the cashless treatment benefit is something that not every company can afford. Hence, preparing a large sum of money in a quick time is a challenging task.
Rising Medical Costs and Health Disorders
In the last decade, the world has seen inflation and cost rise across all the products and services that include the medical field. To avail of doctors and advanced technology services, the individuals had to spend a lot of their savings and income. Medicines are not cheap because the cost of production has increased.
Moreover, the world has seen more cancer, tuberculosis, diabetes, HIV, AIDS, and other illnesses and people being victims of it. The world went through a global pandemic that gave rise to medical facilities and services. People signed up for health insurance because they realized that it’s financially and medically beneficial. Thus, having medical insurance gives you some relief that a third party pays the bills.
Free Medical checkup & Other Benefits
As stated in their terms and conditions, several health insurance companies provide free medical checkups every year to their policyholders. However, some health insurance providers offer this perk to those who have been a policyholder with the company for a long time.
Policyholders will also be provided with an added incentive of No Claim Bonus (NCB), where the insurers will provide some monetary benefit to the policyholder. To avail of this bonus, you mustn’t ask for any claim during a whole year. The insurance provider also covers ambulance charges and pre-hospitalization and post-hospitalization. These added benefits are offered to each policyholder.
Peace of Mind
Having a well-planned insurance policy means that the insurance provider has covered you and will pay for any expense that rose. This is helpful when a person goes through a life-threatening illness like cancer and runs on limited financials. Health insurance would add to a person’s savings plan and ensure that their income is not spent paying medical bills.
The medical coverage offered by the insurance providers is vast as it covers costs related to laboratory services, prescription drugs, hospitalization, maternity and newborn care, mental and behavioural health, emergency services, etc. Since life is unpredictable and accidents can happen anytime, it is better to be insured so that the insurance company pays the bills. Being insured means that the person has one less thing to stress about.
Let us look at those factors that a person should consider when considering a life insurance policy.
What Factors Should a Person Consider Before Deciding on a Health Insurance Plan?
In the previous section, we looked at the importance of a health insurance policy for a person. Here, we will discuss the different elements that a person should consider before deciding on a health insurance plan. Let’s get to it!
Financial experts say it is better in monetary and health terms to buy a health insurance policy at a younger age. The premium costs are usually lower relative to buying insurance at an older age at a young age. Old age has numerous health problems like blood pressure, diabetes, etc. It is ideal for getting insurance while still young and healthy.
It is better to look for those health insurance companies and policies that cover terminal illnesses like cancer, etc. The reason is that such illnesses require great care and the use of machinery, medication that is not cheap. Hence, if the policy covers all such expenses, it would make it easier for the person’s family to manage the finances. Moreover, the expenses incurred to treat a terminal illness are considered the ones that will drain the finances of that person’s family. So it is better to have a policy that covers such costs.
Financial experts advise not to select that health insurance policy where the individual has a high co-payment clause. Under this clause, the insurance providers state that the person would have to pay some portion of the amount when filing a claim and the insurance company pays the rest. This clause increases the expense account of the policyholder as they are liable to pay some part of the medical bills. Hence, this is something that the person should look into before choosing a policy.
Lastly, it is crucial that the policyholder would include the right add-on features to their policy. This will increase the overall overage of the policy. People tend to add riders to their policy for services that are not part of the policy, but they can be added by paying a little extra to the health insurance company. The important thing to note is that the riders add value to the insurance policy, which will help you in the long run.
Let’s now have a deeper look at the best health insurance companies in the industry.
Best Health Insurance Companies
The previous section covered the factors that a person should consider before considering any health insurance policy from reputed companies. Here, we will discuss the best health insurance companies based on people’s reviews of their products and services. Let’s get to it!
One of the trusted names in health insurance is ‘Kaiser Permanente’. It has a great network of hospitals and medical centres named after ‘The Kaiser Foundation’. It has received many customer service awards given by J.D. Power & Associates.
Kaiser Permanente’s private health insurance is available to people living in Washington, Washington D.C, Hawaii, Oregon, Virginia, California, Colorado, Georgia, Maryland, and Oregon. More than 23,000 physicians are included in its network.
If your resident area counts under the coverage of Kaiser Permanente, you can make plans like bronze, silver, gold, and platinum. Except for platinum, all the remaining plans have the option of adding a health saving account (HSA).
Kaiser Permanente offers high-deductible plans for Health Savings. It offers tax-free contributions and qualifying expenses like the following can be helpful:
- Medical Prescriptions
- Visits for Special and Primary care
- Visits to Doctors and hospitals
- X-rays and Lab tests
- Emergency services like Ambulance
- Therapies related to Physique and occupation
- Vision and dental care.
The HSA comes with a debit card, and the option of transferring the HSA balance (in case of job transfer) is also available. You can invest your saved amount of over $2,000 into any mutual fund selections.
- It provides ‘Strong customer service.
- Best options for Health savings account
- It provides a variety of health plans
- Insurance is limited to some areas only
Blue Cross Blue Shield
The private health insurance of the Blue Cross Blue Shield (BCBS) Association is available in the whole United States and more than 170 countries. An average of about 110 million Americans have health insurance provided by the BCBS organization. About 34 BCBS health insurance companies are working independently in the United States. Some have been rated as an ‘A’ (excellent) from AM Best.
The HMO plan is the most comprehensive plan providing the option of saving a great amount, but there are limited choices of doctors for those inside the HMO. The EPO plan runs through selective network providers and gives attention to policies that manage and promote member health care. In contrast, the PPO plans provide access to the participation of many doctors.
The fact is that BCBS PPO providers are spread in a great number in all places. It might be possible that you are likely to be close to any of them, despite the part of the country you are living in.
BCBS insurance plans also allow you to avail Health Saving accounts along with the flexible spending accounts (FSAs). FSA plan offers you the opportunity to save money, have tax-free health insurance deductible, and the other expenses related to health.
The HSA plan is similar to the FSA plan, but it doesn’t offer tax-free deductible plans. And it cannot be available and approachable through an employer. In these plans, to manage insurance deductibles, you can apply for funds of your own choice. You can have numerous benefits by choosing a high deductible plan for lower insurance premiums.
- BCBS organization has a large network of providers. You can access the BCBS health insurance policy no matter where you live. There will always be a facility provider who will help you with the BCBS insurance policy.
- It provides many policy options. It also has numerous plans according to the chosen coverage area and period.
- Customers have given less than 3.5 stars to different BCBS companies on Consumer Affairs. The complaints are Its difficult to get approval for any medical procedure; they deny your residence area under coverage and provide limited choices for PPO plans.
United HealthCare (UHC) has been listed as having an “A” (excellent) rating for financial strength from AM Best. It is also a part of the largest health insurer group in the United States, the “UnitedHealth Group”. UHC provides insurance of essential care for individuals that count the best for the Affordable Care Act (ACA) requirements.
The best feature of UHC that distinguishes it from other insurance companies is the online access to its plans. Through UHC, you can order your prescriptions online; you can talk to a nurse via the provided number/ hotline, and can make you participate in online wellness programs. UHC Members can have 24/7 online access to find doctors and set appointments with them. Moreover, you can make file claims and even talk to a doctor via a cellular device. You can also access the above facilities through their mobile application.
UHC provides health care options online, so the people who want electronic access and management of their health care, the UHC health insurance is a great choice. You can avail of HMO and PPO plans with your already managed HSAs and FSAs. It also offers ‘Member discounts’ for various health-related products and services. They include vision services (including Lasik), hearing aids, and programs for smoking cessation.
There is an extensive preferred provider network comprised of more than 1.28 million doctors and other professionals of health care. UHC also provides the Medicare Advantage in HMO and PPO plans.
- It provides PPO plans with a great coverage network
- Its health care related services are available Online
- Its customer satisfaction ratings are not satisfactory, and they are on average level.
Aetna has a great reputation in the U.S. and is considered one of the largest health insurance providers in the United States. It has the standard financial strength ratings of an AM Best “A” (excellent).
Aetna was established in 2018 by CVS Health. But up till now, it is providing employer health plans to residents living in the 50 states of the United States. Aetna does not provide health care insurance privately and to individuals. But it offers plans for employers, students, and the Medicare and Medicaid facilities. Policyholders with high deductible plans can only have access to HSA.
The health care provider network of Aetna is very large. Residents of any part of the country can access its insurance policies and plans through Aetna approved-providers. Members can access network doctors and licensed doctors through Network plan options. The option to see a network doctor will save you save a lot.
Aetna health insurance company provides numerous kinds of plans such as EPO, Stop-loss, HMO, PPO, Indemnity, POS, and HDHP with HSA. Aetna members are also provided with numerous wellness programs, including membership in the gym, weight-loss programs, health coaching, and many more.
- It offers HSAs
- It has Nationwide coverage
- It offers numerous Wellness programs
- There is a 3.5-star rating from Insure.com on the website and application of Aetna.
- Only 75% of customers would likely recommend its policy to their friends
Cigna is a global health insurance organization. It offers private health insurance in almost 13 states of the United States. The states in its coverage are Florida, Arizona, Colorado, Georgia, Illinois, Missouri, North Carolina, Pennsylvania, Tennessee, and Virginia. AM Best rated Cigna as an “A” (excellent) financial strength. Depending entirely on your plan, you may or may not need referrals for out-of-network care. , But you can have the greatest savings by utilizing an in-network provider.
There are different Plan options, deductibles, and co-pay options varying by your living state. You can have High-deductible plans along with HSA plan options. Policyholders can access the plan network doctors, the estimated costs, check claim status, and online insurance ID cards.
It offers some benefits which are member-friendly such as having a home-delivered pharmacy, a helpline for health knowledge, and rewards-supported programs. And also, the Cigna telehealth connection program allows you to access board-certified telehealth providers like MDLIVE.
- It offers out-of-network care without a referral
- It offers numerous Telehealth services
- Its coverage area is Limited
Molina Healthcare insurance provider serves 18 states of the U.S. But it offers its private health insurance to the residents of New Mexico, Ohio, Texas, California, Florida, Michigan, Mississippi, South Carolina, Utah, Washington, and Wisconsin. Molina Healthcare has more than 4.8 million policyholders across the United States. The coverage options, benefits, and plan choices are different depending on the state you are living in. It offers many health plans which you can access with low co-pays. It also covers some essential medical care like hospital care, medical prescriptions, prenatal, emergency services, hospital care, vaccinations, lab tests and x-rays, insurance for vision care, and doctor’s visits.
Molina offers several excellent benefits, wellness care, and preventive health care services to its health insurance policyholders, such as immunizations for adults, services for adult preventives, postnatal care, child and adolescent immunizations, pediatric preventive health care, and prenatal.
- It offers the excellent wellness programs
- It offers the excellent preventative care
- It only covers limited territories throughout the U.S
Frequently Asked Questions (FAQs)
Now that you have understood about health insurance, let us look at some of the general questions people ask when looking for a health insurance policy. They include the following:
Does Health Insurance Include Therapy or Mental Health?
Yes, Some Health insurances cover Therapies and counselling sessions, but it is dependent on the specific policy it follows. You may check the summary of your Health Insurance to ensure whether it covers mental health therapy.
If your Insurance has been covering the therapy, check to see if the provider understands your specific plan or not. Many therapists don’t bother to accept health insurance. So if you have the same case, you should talk and provide your receipts for reassurance. This can benefit you, and you may have a good therapist. But again, every condition and facility depends on the specific policy.
Does Health Insurance include Dental insurance too?
Health Insurance policies do not cover the dental problems expenses of adults. Adults have to purchase their Dental insurance separately. If you are getting your health insurance through any known faculty, the chances of dental insurance and your health insurance are high.
How to Know What My Health Insurance is About?
Insurance companies, including Health Insurance, are fully instructed to provide all covering topics in a document. The document copy will be given to you on your first visit or registration. If you have trouble finding your insurance details, you can check them online by logging in to your account or calling customer service.
Are Health Insurance Premiums Deductible Taxes?
The deduction of taxes for Health insurance premiums is only if your total medical expenses of a year exceed 7.5% of your adjusted gross income.
Taxpayers are restricted from maintaining their tax deductions if they are willing to deduct expenses related to their health. Taxpayers don’t give much attention to tax deductions now because the standard deduction rate has been increased.
The individuals, who earn on their own, often don’t qualify for tax-deduction itemization and don’t get any benefit from employer-sponsored insurance policies.
The article covers the basics of health insurance giving new readers and beginners the knowledge they need to understand the topic. The first section of the guide covers the fundamentals of health insurance to bring about a greater understanding of the topic. Health insurance is a contract between the insurer and the policyholder where they both reach a mutual agreement on a given health insurance policy.
The second section of the article is about the items covered under the health insurance policy. The general health insurance coverage would include medical treatment, prescriptions, and paying bills for surgeries proven by the scientific community. We discussed health insurance exemptions such as what is not considered part of health insurance in the third section. The section covers a vast list to which the policyholders should adhere too. This information will stand as new information for beginners to cater to before buying a life insurance policy.
The next section deals with the cost of buying a health insurance policy and the factors linked to the annual fee, which is the insurance premium. Here, you will understand the different factors directly proportional to the insurance premium. Catering to these factors would mean that you would want to get the best possible insurance premium for your health insurance.
In the next section, we discussed the importance of buying a health insurance policy for yourself or your family. The section enlists all the reasons anyone should get a life insurance policy. Although it helps pay the bills and alleviate the financial burden on the family, it is known to provide benefits and peace of mind, which leaves a person stress free.
The second last section briefly covered all those factors that anyone should consider when applying for a health insurance policy. These factors include diligence and checking the best health insurance companies available in the industry that offer the best policies. Moreover, a person should be familiar with their wants and needs and then search for a policy that fits them. Also, as per the suggestions from financial experts, getting a health insurance policy sooner is much better than delaying it over the years as that would increase the insurance premium cost.
The last section covers the best health insurance companies that people can avail themselves of. The list is finalized after catering to current and previous policyholders’ reviews. Each health insurance company has a list of pros and cons to help people better evaluate the insurance companies. It is crucial to choose that health insurance company that satisfies the wants and needs of the person.