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Is Major Medical right for me?...
"I need health insurance". Hundreds of thousands of people are saying that these days but is a major medical plan the answer?
These are commonly referred to as the traditional health care policy. Our parents and grandparents enjoyed the flexibility of this coverage.
It was to simple to understand and use. Health providers would pay fees for the services provided to the insured people covered by the policy.
These type of plans offered the most choices of doctors and hospitals. You could choose any doctor you wished and change doctors any time. You were free to use any hospital anywhere. No hassling or haggling with claims or pre-approvals.
This coverage still exists today although the cost is usually prohibitive and out of the price range of most Americans. If you can afford it there is no better way to make sure you are covered no matter where you travel in the U.S.
There are two kinds of fee-for-service health coverage: basic and major medical. Basic protection pays toward the costs of a hospital room and health care while you are in the hospital. It covers some hospital services and supplies, such as x-rays and prescribed medicine. Basic coverage also pays toward the cost of surgery, whether it is performed in or out of the hospital, and for some doctor visits.
Major medical insurance takes over where your basic coverage leaves off. It covers the cost of long, high-cost illnesses or injuries.
Some health insurance policies combine basic and major medical insurance coverage into one plan. This is sometimes called a "comprehensive plan." Check your health insurance policy to make sure you have both kinds of protection.
How they work is quite simple. The insurerance company pays the lions share of your doctor and hospital bills. You pay a monthly fee, commonly referred to as a premium. |
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Understand that in order to get an accurate quote some health and personal information is required. |
Each Fee-for-Service-Plan comes with a deductible as well as a co-insurance amount. The deductible is paid for by you before the health insurance payments begin. In a typical plan, the deductible might be $250 for each person in your family, with a family deductible of $500 when at least two people in the family have reached the individual deductible. The deductible requirement applies each year of the health insurance policy.
Also, not all health expenses you have count toward your deductible. Only those covered by the health insurance policy do. You need to check the health insurance policy to find out which ones are covered.
After you have paid your deductible amount for the year, you are required to pay an out-of-pocket amount known as co-insurance. For example, you might have what is known as an 80/20 plan where you pay 20 percent while the health insurer pays 80 percent.
Most fee-for-service health plans have a maximum out-of-pocket tied into the coverage. This is the most you will have to pay for medical bills in any one year. It may be as low as $1,000 or as high as $20,000. Once you reach it you no longer have to pay any more out-of-pocket. The heath insurance company then pays the full amount in excess of the cap for the items your policy says it will cover. The cap does not include what you pay for your monthly health insurance premium.
What about if more than one family member has a major illness or injury? How does the co-insurance work then? In most cases you have a cap on this as well. Typically if you have a family deductible of say $500 and a co-insurance amount cap of $2,500 per person the most you would have to pay in a given year would be $6,000. That's two $500 deductibles plus two $2,500 co-insurances. Add them up and it equals six grand.
it seems like a lot of money and it is. However the reason behind insurance to start with is to pass the greater risk to the insurance company. One week in the hospital with an appendectomy can run up the bill towards $100,000. I know because my wife had such and emergency and our final bill approached $70,000. Our portion was several thousand but well worth it when you look at things this way.
To receive payment for fee-for-service health claims, you may have to fill out forms and send them to your health insurer. Today it is common for your doctor's office will do this for you. You also need to keep receipts for drugs and other medical costs. You are responsible for keeping track of your own medical expenses.
That's about all there is to describe the Fee-for-Service Health Insurance. If you can afford it get it. You will appreciate the freedom of choice and lack of headaches.
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