Major Medical 101: What you NEED to know about health insurance but never thought to ask.
Major Medical Health Insurance is a HOT topic today. Everyone is thinking about it and talking about it. Maybe you are asking yourself questions like:
- Do I have enough coverage?
- Why are my premiums so high?
- What does my deductible mean?
- What are exclusions?
- How can I be sure that I’m covered but save money on my premiums?
These are common questions. Below we will help answer these questions and help you understand what major medical is and how to get the coverage you and your family need.
Do I have enough coverage?
Knowing whether you have enough coverage can be a difficult thing to determine. Basically you need to ask yourself a few questions:
Do I have enough savings or financial resources to pay the entire cost of a major illness or accident? (Remember, these amounts could be in the millions of dollars on average.)
How much of my financial resources do I want to spend paying for medical needs?
After you have determined the answers to these questions, it is valuable to work with an experienced agent to research the available options and how each addresses your individual situation. You can also research on the internet various plans and programs which may be right for you.
Supplemental medical policies such as critical illness, cancer, or accident can help ensure that you have the maximum coverage in the specific areas that are of concern to you.
Why are my premiums so high?
Premiums are determined by many factors such as age, sex, risk class, etc. But basically, premium is controlled by three things:
- Choice
- Share of Cost
- Features
The more choice and features and the lower your share of cost your policy has, the higher your premiums will be. Adjusting those will also give you the most flexibility in premium. For example: you may choose to limit the number of doctors you can see and take a greater share of the cost by raising your deductibles or co-payments in order to keep the features you need at the cost you can afford. But there are many combinations insurance companies offer today that give you control of the plan and the price. One of the least expensive, fastest, and easiest ways to keep features and choice high and share of cost low is to add a supplemental health insurance policy such as an accident, cancer, or hospitalization plan to your major medical plan.
What does my “deductible” mean?
Deductibles are simply the part of your medical cost you have agreed to pay before the insurance company begins to pay their part of your medical treatments costs. Deductibles can run anywhere from $500 to $15,000 on average. Some policies with deductibles pay 100% of all costs after you have met that deductible. Other plans may pay 80%, 70%, or 50%, which leaves a significant amount of the cost of care for you to pay.
Deductibles are an excellent way to reduce premiums and keep features high. If you think you are paying too much in premium you can reduce that cost and save hundreds of dollars each month just by increasing your deductible and adding a supplemental health plan to your insurance coverage. By combining your high-deductible medical plan with a low-cost, feature rich supplemental health plan you can ensure that you have the maximum coverage at the minimum cost.
What are exclusions?
Exclusion are the types of treatments, services, procedures, etc. that your plan does not cover and therefore, your insurance company will not pay for. Exclusions vary per policy but there are general exclusions on most major medical policies such as acts of war, elective surgery, fertility treatments, as well as many others. It is critically important that you know the exclusions of any policy prior to purchase. A knowledgeable agent is one of the best ways to ensure that you not only know, but understand the exclusions of your policy and how they may affect you. Having a supplemental medical policy can cover some of those exclusions if an excluded service is of concern to you. Speaking with a licensed health insurance agent can be the safest and easiest way to explore the options you have in regards to exclusions and supplementing them with a specialized policy for your individual situation.
How can I be sure that I’m covered but save money on my premiums?
Spending money for health insurance you don’t feel you use and may not understand can seem like a frivolous expense during tough economic times. But having major medical insurance with a supplemental policy is an ideal way to ensure that you have the best coverage for unforeseen accidents and illnesses. The combination of the two gives you the maximum control of features and cost available in the health insurance market today. Supplemental policies can be customized to your unique situation, are available to individuals and families, and cost as little as $10 per month for significant levels of coverage. Generally, supplement plans do not have the underwriting requirements of a major medical plan and can be issued immediately, in some cases. Once you have chosen to add a supplemental medical plan to your coverage or if you have specific questions, speak to a knowledgeable health insurance agent, research the plans via the internet, or call your current health insurance company. However, an experienced health insurance agent will be able to detail how to reduce your major medical premiums and customize your coverage to your specific situation. In addition, a good agent will be able to explain the costs and benefits of each option so that you can have peace of mind knowing you are covered at a price you can afford. Anyway you decide to explore your options, it is a good idea to know that your medical costs are going to be covered without spending too much to have the protection you want and need.
