I never knew about health insurance before coming abroad for studies. I just knew that health insurance existed ,but had no idea about its importance or how it worked.
Fortunately, there was very little I had to do and everything was arranged by my university. So, there wasn't much I had to worry about.
But everything changed when one of my country mates met with an accident.
This is when I felt, it was necessary that everyone should have a basic idea about health insurance.
As a disclaimer, health insurance and especially their selection is an incredibly complex topic. I am not an expert in this field. Just as a student of medicine, I feel everyone should be aware about the basics of health insurance.
In this article, we shall discuss:
What is health insurance?
What are premiums, deductible and co-insurance?
What are some important factors you should consider before selecting your plan?
1. What is Health Insurance?
Insurance is a means of financial protection from a loss. When the loss is in the form of a health ailment, disease, accident or injury, it is known as health insurance.
Life can be unpredictable at times. Events can change life for better or worse.
Diseases , health ailments and injuries are one such incidents that can change lives for ever.
While the suffering might take time to heal, insurances can be a great too to minimize the financial part of it.
According to a study in USA, financial toxicity ( problems caused due to high health care costs) impacts approximately 137 million (56%) adults.
A life-threatening disease can wipe out your entire life's savings and push the family towards poverty.
This is why everyone needs some form of protection. Along with a healthy diet, regular check-up, exercises, health insurance is a vital component you should not miss to take care of your health.
Basically, health insurance is a form of protection that hedges you from financial difficulties causes due to health abnormalities.
2. What are premiums, deductible and co-insurance?
Health insurance has many technical terms, but these three are most essential terms you will always encounter.
A. Premiums: Premiums are your monthly payments. Just like you pay monthly installments for your car or home, premiums are the monthly payments for your health insurance.
They vary depending upon your plan. Even age has a role in it.
B. Deductible: Deductible is the amount of money you need to pay out of your own pocket, before your insurance company starts paying for your bills.
Every plan has a fixed deductible
For example : You go to the hospital for a check up. Initially, your reports showed that you require some medications costing 40 USD. Your deductible is 200 USD.
This means that until your medical expenses cross 200 USD, you will need to pay for the services from your own pocket.
But, lets says unfortunately, you had to undergo some surgery, the cost reaches 2000 USD, your insurance company will bear the costs after you pay 200 USD as a deductible.
Basically, deductible is the initial amount you need to pay before your insurer steps in to help.
C. Co-insurance : Co- insurance is the percentage of the medical bill you will need to pay after reaching the deductible.
For example: Your bill is 2000 USD and your deductible is 200 USD. So, now you have 1800 USD for the remaining insurance coverage.
Out of this the amount of money, you will bear: may be 10% , 20 % , is what is called co-insurance.
If your co-insurance is 10%, in addition to the deductible , you will pay 180 USD from your own pocket, while the rest 1720 USD will be paid by your insurance company.
So, it is integral that depending upon your own scenario, you select the right premiums, deductibles and co-insurance.
3. What are some important components to consider?
Insurance plans are complex, and you need a professional to help you out. However, doing your own due diligence is also vital.
Here are some of the basic components you should never forget:
The Hospital Network: Not all hospitals are covered by your insurance provider. It is important that you are aware which type of hospitals your insurance provider covers.
Else , you might have to pay for the whole treatment cost upfront and only a portion of it might be reimbursed.
For instance, the insurance coverage for my country mate only covered public hospitals.
Sub-disease clause : While selecting your policy, you need to be aware about the sub-disease clause. These are the diseases your insurance provider will not cover. So, this is another vital aspect you should be mindful of.
The clauses and conditions for reimbursements : These are the conditions you need to satisfy to claim your health insurance. You need to be very careful and read them properly before you sign it.
Professional Help and Personal Research : It is also vital that you take suggestions from a medical professional about your health condition and do personal research and compare different policies before you sign for one.
Your wellbeing depends on your own research and awareness.
Summary
Health insurance is a financial protection from unpredictable health incidents, and is one of the most important tools for your financial and physical wellbeing.
However, it is essential that you do your own homework about your health condition, and select the suitable policies. Professional advice and personal research while selecting policies is equally vital.
References
https://www.nature.com/articles/s41572-022-00341-1
https://pubmed.ncbi.nlm.nih.gov/17954671/
https://www.brookings.edu/wp-content/uploads/2016/07/theimpactofhealthinsurance_chapter.pdf