Health Insurance
Affordable health insurance in Florida - What are my choices?
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Major Medical
Major Medical plans are easily the most comprehensive health plan that you can own. They can cover most medical expenses such has hospital costs, physician and surgeon fees, nursing facility care, prescription drug costs, diagnostic testing, blood and lab work, x-rays, in-home medical supplies, immunizations for adults and children, and more under one single policy.
These plans usually have a deductible and co-insurance cost-sharing and can be custom built with a number of different health insurance carriers to meet expense and coverage needs. This lets the insured take on some of the cost of the health care in order to keep the monthly premiums affordable and helps the insurance provider avoid smaller claims while allowing them to still provide superior coverage the large expenses. It is important to be aware of what's considered a "covered charge" in your major medical health insurance plan and what is not covered. Certain experimental treatments, high-risk surgeries, and "new" procedures may not be covered at all under a health insurance policy. Make sure you understand these facts and ask your agent or broker about anything that might be unclear to you.
The following is a VERY basic example of the principles of a major medical health insurance policy. Actual coverage may vary.
Example: Susan has a major medical health insurance plan with a deductible of $2,500 and 80/20 co-insurance and max out of pocket of $5,000(deductible included). She is diagnosed with cancer and has to undergo surgery. The condition was not pre-existing, and all services were considered a "covered expense" under her policy. She is hospitalized for a period of four days before being released and her total bill comes out to $59,000. She would be responsible for the first $2,500. The remainder of the bill is $56,500 with co-insurance of 80/20 (the insurance company pays 80%, Susan pays 20%).
80% = $45,200
20% = $11,300Even though 20% of the remaining bill is $11,300 Susan has a maximum out of pocket cap of $5,000 on her policy. Therefore her share of the $59,000 bill cannot exceed $5,000.
Indemnity
An indemnity health insurance plan is a policy that pays pre-defined benefits up to an amount equal to the loss. These policies pay out different amounts for certain covered expenses outlined in the contract. These costs can include doctor office visits, preventative wellness visits, infant wellness, x-rays, hospital room and board, surgery, surgeon fees, emergency room, ambulance costs, physical therapy, and hospice care with a set yearly benefit maximum on each type of expense. A pure indemnity plan operates on a reimbursement principle and therefore does not have a medical network. Other indemnity health insurance plans have a medical network that the insured must stay within. This type of plan may or may not have a deductible and often pays out first-dollar coverage for covered expenses if there's no deductible, but at limited levels. It is very important to understand the benefits that are covered in this type of plan – read your policy cover to cover.
The following is a VERY basic example of the principles of an indemnity health insurance policy. Actual coverage may vary.
Example: Danny has an indemnity health insurance policy that pays up to $70 per doctor office visit, up to $150 for a yearly wellness visit, and up to $100 for an x-ray, plus many other benefits. He goes to the doctor and has an x-ray done in the same day. The doctor office visit costs $72 and the x-ray costs $85. Since the doctor's office benefit is up to $70, he would owe the remaining $2. The x-ray benefit would pay out the actual cost of the x-ray which is $85 since the cost did not exceed the benefit.
Why Do I Need a Health Insurance Plan?
The core purpose of health insurance is the sharing of an uncertain. Policyholders enter into a contract with an insurance carrier in order to obtain coverage for health risks, at a predictable monthly fee. There are many people out there who think of health insurance as a gamble, and prefer not to pay monthly for something that they "will never use". Statistics show, however, that this conclusion is far from practical. According to publications from the Center for Disease Control and Prevention, there were over 2,400,000 deaths in the U.S. in the year 2007. Of the deaths, the 10 leading causes were broken down as follows:
Number of deaths for leading causes of death:
- Heart disease: 616,067
- Cancer: 562,875
- Stroke (cerebrovascular diseases): 135,952
- Chronic lower respiratory diseases: 127,924
- Accidents (unintentional injuries): 123,706
- Alzheimer's disease: 74,632
- Diabetes: 71,382
- Influenza and Pneumonia: 52,717
- Nephritis, nephrotic syndrome, and nephrosis: 46,448
- Septicemia: 34,828
According to these figures, over 62% of all deaths in the U.S are illness or accident related, with heart disease and cancer accounting for more than 49% of these deaths! In other words, an individual is far more likely to die from an illness or accident than any other cause of death.
Hospital bills for a major illness or accident can, and will bankrupt a family. As of 2007, 62% of all bankruptcies in the U.S. were health related. It happens all of the time. People had large medical bills that they were not able to pay. The lack of insurance can cause entire families to lose their savings, homes, businesses, their kids' college fund – to put it bluntly, one major illness can financially ruin an entire family.
To really get a grasp of insurance and why it is in anyone's best interest to carry a policy, one must consider Cost of Insurance vs. Out-of-Pocket Exposure. Without insurance, exposure to medical bills is unlimited! For any health given problem, which you may or may not have any control over, the uninsured individual is stuck with the medical bills regardless of weather there is money to pay them. Also, statistics show that you are more likely than not to eventually die from a health problem – and with health problems there are bills. A health insurance policy limits your exposure to medical costs by providing a set out-of-pocket limit that can be predicted. It is important for anyone with insurance to fully understand the covered expenses in their policy as well as the policy's exclusions and limitations. They can vary from carrier to carrier, so be aware.
Insurance contracts sometimes have hidden benefit limit maximums that can very easily be overlooked until it's time for a claim to be paid out, and then the insured is stuck. Read your health insurance policy from cover to cover and call your agent or broker with any questions. If a policy is priced lower than every other plan, but the benefits are the same, consider that a red flag for any buyer. Insurance prices are regulated by law, so a cheaper policy will have fewer benefits even if it is not evident on the surface. Bottom line: Be familiar with your benefits.
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