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Do You Need Supplemental Health Insurance?
If all of a sudden you were an accident, would you be able to cover your lost income as well as all the co-pays and deductibles without straining your finances? There’s a good chance that even if your health insurance provides excellent coverage that an unforeseen medical emergency or stay in the hospital would hit your pocketbook hard. Supplemental health insurance is intended to help bridge the gaps that regular health insurance policies don’t cover. In addition, it can provide much needed cash to help replace any lost wages and pay for living expenses.
Supplemental health insurance works differently from standard health insurance. With standard health insurance, your policy pays your health provider or doctor for their services that they provide to you. You may have to pay a co-pay or deductible, and usually your health care provider takes care of the insurance paperwork. The benefits from your health insurance are paid directly to your doctor or other health care provider.
With supplemental health insurance, you are usually paid a fixed amount when you utilize health care services on a specific incident. As an example, if you were to fall and sprain your ankle your regular health insurance would pay the doctor bill, but you would need to pay your deductible or co-pay. The doctor’s office would bill your insurance company and bill you if there was an excess. If you had supplemental health insurance that pays $50 for a visit to the doctor, you would be able to file a claim and your supplemental insurance company would pay you $50. You could then use the $50 to pay towards your co-pay or deductible and any other expenses.
The benefits on a supplemental health insurance policy vary from policy to policy, with the differences usually having to do with the specific purpose of the policy. AFLAC, for example, is designed to help policy holders cover medical expenses that most health insurance policies do not cover by paying them in cash for doctor visits, hospital costs, or for being out of work due to an injury or illness. Other types of supplemental policies are intended to help pay for prescription costs or for paying out benefits for disabling accidents or catastrophic illnesses. Some policies are for hospitalization only and some for long-term care. There are quite a few supplemental policies designed for the purpose of paying for costs that are not covered by Medicare health insurance.
Not everyone needs supplemental health insurance. However it is a form of financial protection that can come in handy if you do not have savings or sufficient means to cover any unexpected medical costs that could crop up. Supplemental health insurance should be considered if you have small children, are self-employed, are on Medicare, or if you do not have the financial means that it would take to be able to handle large medical expenses or be away from work because of injury or illness.
The best policy for supplemental health insurance will depend on the individual and his or her circumstances and specific needs. For young families, as an example, supplemental insurance policies that pay for wellness care are very helpful. Hospital indemnity policies that pay cash benefits for parents who are unable to work due to illness or for being hospitalized would also benefit young families. For older adults, a long-term care or supplemental policy that pays a lump sum benefit for catastrophic illnesses could be very useful. A prescription benefit plan could help both families and older adults to help meet medical expenses that regular health insurance and Medicare don’t cover.
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How Health Insurance Premiums are Calculated
All health insurance providers have underwriting criteria, whether it is a for profit organization or not.
One of the major factors effecting your health insurance is your age. In general, the older you are the better the chances are that you will get sick or will need some form of medical treatment. Because of this, the older you are the more expensive your insurance premiums will be.
Many people with concerns about health insurance are not just worried about themselves but their family as well. Some insurance companies rate their premiums based on family size. Other insurance companies have a basic family rate they charge no matter what the size of the family is.
In terms of life insurance, women tend to pay lower rates than men do. For health insurance, women’s premiums are generally higher. This is due to the fact that health insurance statistics indicate that females have a tendency to need more medical care than males.
Your health history also plays a significant role in determining the cost of your health insurance premium. Insurance operates on the basis of many statistical probabilities. If your health has been poor in the past that means that you are more likely statistically to have higher health insurance expenses into the future, which results in either having to pay higher insurance premiums or not being able to obtain insurance at all.
Your occupation is also an important factor when it comes to health insurance. The higher the probability is that you will suffer a work related illness or injury, the more likely you will be charged a higher premium to cover these risks.
Your health insurance application will also ask you questions regarding personal habits such as drinking and smoking. If you are a heavy smoker or drinker, your premiums are going to be higher than someone who isn’t.
You need to be aware of certain provisions in insurance contracts. Insurance policy exclusions remove certain procedures and other types of health care from coverage. It is critical that you understand all the exclusions contained in your policy.
One common exclusion is preexisting conditions. These are often defined as symptoms that a prudent person would seek diagnosis, care or treatment for in a five year period, or a condition where a physician either gave a recommendation or provided care for.
Many health insurance policies exclude coverage or injuries or illnesses that are caused by narcotic or other types of controlled substance abuse that was not prescribed by a doctor.
Some policies have an exclusion of benefits for emotional and mental illnesses that do not have a bodily cause. Other policies may provide some limited benefits for certain items sch as psychotherapy. It is important that you understand all the details of your health insurance policy, particularly if there is a possibility that you or a member of your family may need the services of a psychologist, psychiatrist or other form of mental health professional.
If your illness or injury qualifies for workers compensation benefits, your own insurance will most likely exclude paying any of these medical bills.
Tags: health insurance premium, term of life insuranceRelated posts
Features of Health Savings Account (HSA)
One unique as well as interesting feature of an HSA is that the money in the HSA account can be invested in similar ways to how money in an IRA account can be invested. The same kinds of rules and restrictions apply to HSAs in regards to investing money as well as deferring taxes on earnings.
* All earnings on investments in an HSA account are non-taxable for as long as the money stays in the account or is withdrawn for the purpose of paying medical expenses.
* If earnings are withdrawn for non-medical purposes, and the owner is under the age of 65, then taxes will have to be paid on the withdrawals.
* Because contributions to an HSA are made with pre-tax dollars, it gives you the ability to reduce your income taxes.
Combining an HSA with a HDHP also gives the account owner the ability to use funds in the HSA account to pay for their annual health insurance deductible and to pay for medical expenses that their policy doesn’t cover.
There are limits to the amounts to the amounts you can contribute to HSAs in one year. The limit for individuals is $2,850 and for a family it is $5,650.
An HSA has more extensive coverage for medical expenses than most conventional health care plans. The coverage may include the following:
* Preventative health care visits
* Physical therapy, including chiropractor visits
* Mental therapy, including psychiatry, psychotherapy and psychology
* Dental treatment
* Maternity expenses
* Prescription and nonprescription drugs
* Alternative health care for procedures like acupuncture and homeopathy
* Travel and accommodation expenses that relate to health care
HSAs are potentially a great option for individuals and families who want to have a high degree of flexibility in their health care that they can manage on their own without being required to visit network health care providers or complete lots of paperwork.
The ability for owners over the age of 65 to use the funds in the account for both medical as well as non-medical purposes means that an HSA, unlike many other types of health insurance plans, can benefit practically anyone, including individuals that have medical expenses on a continual basis as well as healthy individuals that do not have a lot of ongoing costs.
Tags: health saving account