How Do Health Insurance Plans Actually Work?

July 21, 2021
21 Views

Your health is your wealth, and in order to protect it, you need to get a health insurance plan if you haven’t already.

With the help of medical insurance, you can pay hospital bills without any stress, as it provides you coverage in case of a medical emergency or an urgent hospitalization. Considering the current medical costs, even if you are diagnosed with a minor health issue, it may cost you to use your savings for the treatment. On the other hand, if you have health insurance, you can keep your savings for better utilization and let the health insurance plan take care of all your medical expenses. It would be best to say that health insurance has now become a basic need for every individual. Thus, in order to purchase the best health insurance plan for yourself and your family, you must conduct thorough research before making the final decision.

How Do Health Insurance Plans Actually Work? 1
Image Source: Shutterstock

Moreover, before choosing a health insurance plan, you should understand how it works. A health insurance policy can also be thought of as a contract between you and your health insurance company that commits them to have your back financially in the event of a medical emergency. It acts as a financial safety net that helps you deal with huge medical bills and costs incurred during hospitalization. Health insurance plans are investments that you make to protect your hard-earned money from being spent on hospitalization, drugs, ambulances, doctor’s consultations, and other medical expenses.

Understanding health insurance:

When someone opts for Health Insurance, an arrangement is set according to which the insurance provider promises to cover all your health expenses in times of need in exchange for the fixed amount of premiums you decide to pay monthly or yearly.

To understand how health insurance actually works, you need to understand several key terminologies attached to it:

What is premium?

The premium amount is the price you regularly pay to get quality cashless medical aid during a crisis. When you buy a health insurance plan, you promise to pay a certain amount monthly to obtain maximum coverage when medical contingencies occur. This premium is decided by the applicant and the insurance provider based on several factors when purchasing the policy. Thus, you need to keep paying this premium regularly to keep your health insurance plan, failing which you will lose your insurance plan.

How is the premium amount decided?

When you choose any health insurance plan, you need to provide certain personal information that may include age, gender, location, medical condition, etc. Based on this information, the premium is decided by the insurance provider. Often health checkups are also scheduled for the applicant to assess his/her medical condition depending on which premium can be decided.

Other terminologies:

Deductibles – When you opt for a health insurance plan, it includes deductibles. This is the amount you need to pay before the insurance is activated to cover your expenses. Once this amount has been paid, your insurance can cover your health care costs as it is supposed to.

Copay – This is a percentage of the claim amount that an insured person has to bear every time he opts for a medical facility; however, the insurance company or an insurer pays the rest of the amount.

Coinsurance – This is a decided percentage of the total amount that an insured person has to pay every time they avail of a service. And the remaining amount will be covered by the insurance company.

How to decide on a perfect health insurance plan?

When you select the plan, you need to look for the following:

Type of the health insurance plan
Monthly premium to be paid
The deductibles
The co-payment charges that are to be paid
The coinsurance percentage
The out-of-pocket cost to be paid
Tax exemptions it provides.
There are multiple insurance providers available today, making it more difficult for policy buyers to choose an appropriate one. Hence, remember to go for reliable and well-known insurance providers such as Care Health Insurance who have a vast list of network hospitals and an outstanding claim settlement ratio.

You may be interested

News
7 views

Lawan refers EFCC, Petroleum Agencies Board nominees to committees for screening

Webby - September 22, 2021

By Sanni Onogu, Abuja Senate President Ahmad Lawan has forwarded President Muhammadu Buhari’s nominees into the board of the Economic…

FG fights back, seizes properties of RNP member over debt
News
3 views
News
3 views

FG fights back, seizes properties of RNP member over debt

Webby - September 22, 2021

Spread the loveBarely 24 hours after he co-founded the Rescue Nigeria Project (RNP), a two-term governor of Kwara state, Alhaji…

APC divided over Tinubu’s supremacy in Lagos
News
1 views
News
1 views

APC divided over Tinubu’s supremacy in Lagos

Webby - September 22, 2021

Spread the loveNational leader of the All Progressives Congress, Bola Ahmed Tinubu is facing serious opposition to his leadership of…

Leave a Comment

Your email address will not be published.