Health Insurance Plans

Health Insurance Plans

HEALTH INSURANCE PLANS

Health insurance plans insure its members against unexpected medical emergencies and keep their family’s finances stable during testing times. Keeping in mind the rising medical costs and a spurt of diseases buying a health insurance is mandatory

 

Top Reasons to Buy Health Insurance Plans

These are some of the top reasons why one needs to opt into buying Health Insurance Plans

  1. Better Financial and Health Care Planning

Accidents and medical emergency can happen without warning and a good health policy will ensure that an individual is sufficiently covered for emergencies. It is tough to compute how much one will spend on health care in a year but having health insurance plan helps one to pay for sudden medical costs. The individual can also buy a family health plan that will cover the entire family. Usually, these family plans are much cheaper than having multiple individual health plan. Also, he/she can opt for critical illness plan along with personal accident cover to address his/her divergent health care needs.

 

  1. Corporate Health Cover is Insufficient

With rising medical costs, the importance of a health insurance policy cannot be overstated. If one checks the cost of a two day’s hospitalization for a regular ailment and then comparing it with his/her company’s insurance coverage. When he/she will retire or change a job, his/her corporate health plan will cease to exist. So it is worthwhile to buy an individual health plan.

  1. Value For Money

Besides taking care of the cost of hospitalization, health insurance companies also offer daily hospital cash allowance for expenses incurred on food, commuting from home to hospital and all other daily hospital charges. There are some insurance companies which take care of the policyholder’s recovery expenses also. Many health insurance companies have expanded their coverage ambit to include domiciliary treatment. However, these customized and high-end benefits come with higher premium so make sure to read the policy documents carefully before buying.

  1. Increase in Incidence of Life-Threatening Diseases
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On a sad note, India is grappling with life-threatening diseases. The effect of these diseases is felt on the productive workforce from 35-65 years. Also, heart diseases among Indians occur five to ten years earlier than in any other population around the world. News about people dying in Swine flu across the country has created a panic in almost every part of India. Unfortunately, the number of people who are affected with Swine flu is more than 10,000 and the death toll has now reached to 2000. Over the last few years, the emergence of infectious diseases has increased and chances are high that these diseases may become more deadly in near future. By the year 2020, seven out of every ten deaths in developing regions are expected to be due to non-communication diseases (NCDs).

 

  1. Tax Benefits

A member can get an exemption for paying the premium under Section 80D of the Insurance Act.

 

Here are some health insurance plans

Fee-for-service or traditional indemnity plans

Preferred provider organization (PPO)

Health maintenance organization (HMO)

Point-of-service (POS) plans

High-deductible health (HDHP) plans

Consumer-directed health (CDHP) plans

Fee-for-Service Plan

The fee-for-service plan is one of the more straightforward types of health insurance. One can go to any doctor that he/she chooses, and his/her doctor will submit a claim directly to his/her insurance company for payment. These plans usually have a deductible, which is a set amount that one is required to pay before his/her insurance kicks in. For example, one’s insurance company may not start paying benefits until after he/she has paid $250 toward medical expenses. After he/she reaches his/her deductible, his/her insurance will cover a set percentage of his/her medical expenses.

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Advantages:

  1. Flexibility in choosing a medical care provider
  2. The individual can receive care just about anywhere in the U.S.

Disadvantages:

  1. More expensive than other plans
  2. Some services, such as check-ups and preventative care, may not be covered
  3. A high amount of paperwork, i.e. saving receipts for payment reimbursement

PPO (Preferred Provider Organization)

A PPO (preferred provider organization) is a type of insurance plan where the insurance company has contractual agreements with certain ‘preferred doctors and hospitals to offer services at a reduced rate. When a member receives care from one of the preferred providers, he/she pays less than what he/she would if he/she receives care from a provider that is considered out-of-network (not a preferred provider). PPOs usually have a co-payment, which is a set amount that you have to pay for in-network providers. He/she may also still have a deductible.

 

Advantages:

Quality choice of medical care providers

Option to choose out-of-network providers

Disadvantages:

Additional costs when using out-of-network providers

The higher amount of paperwork associated with out-of-network providers

 

HMO (Health Maintenance Organization)

In HMO (health maintenance organization) plans, a member is given access to certain doctors and hospitals, and he/she can only see a specialist after he/she had obtained a referral from his/her primary care physician (PCP). His/her PCP is in charge of managing his/her health care needs. Treatments that he/she receives outside of his/her network are usually not covered.

 

Advantages:

Total costs are lower than those associated with fee-for-service or PPO plans

Usually includes preventive care and a wide range of additional services

Minimal paperwork needed

 

Disadvantages:

Restricted choice of medical care providers

Could take longer to get an appointment with a doctor due to lack of choices.

 

Pre-existing Condition Insurance Plan

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The Pre-existing Condition Insurance Plan, or PCIP, is a transitional program created in the Patient Protection and Affordable Care Act (PPACA). Those eligible for PCIP are citizens of the United States or those legally residing in the U.S., who have been uninsured for the last 6 months and “have a pre-existing condition or have been denied health coverage because of their health condition.” However, if one has health insurance or is enrolled in a state high-risk pool, they are not eligible for PCIP, even if that coverage does not cover their medical condition. PCIP is run by the individual states or through the U.S. Department of Health and Human Services, which has a contract with the Government Employees Health Association, or GEHA, to administer benefits. Both will be funded by the federal government and provide three plan options. These options are the standard, extended, and the Health Savings Account option. PCIP only covers the individual enrollee and does not include family members or dependents

 

Federal employees health benefit plan (FEHBP)

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In addition to such public plans as Medicare and Medicaid, the federal government also sponsors a health benefit plan for federal employees—the Federal Employees Health Benefits Program (FEHBP). FEHBP provides health benefits to full-time civilian employees. Active-duty service members, retired service members, and their dependents are covered through the Department of Defense Military Health System (MHS). FEHBP is managed by the federal Office of Personnel Management.

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CONCLUSION

A medical emergency can knock anyone’s door and impact a person both emotionally and financially. As a result, financial advisors suggest that it is prudent to buy health insurance plan and health care policy early in life.