In today’s marketplace one of the most complex contracts to understand are health insurance contracts. Just the sheer thought of a health insurance contract is enough to make most people cringe; however, it is not something that should be ignored, after all, you never know when the unthinkable will happen. What would you do if one of your family members came down with a major healthcare issue such as cancer?
Most Americans today, if they happen to carry health insurance, carry it through their employer. Unfortunately, these contracts are not fully understood by the employees and since they have health insurance they feel that they have enough to cover any situation.
Health insurance contracts that are purchased through an employer are not individualized policies. The same coverage applies to everyone on the plan. In most circumstances, these contracts will do; however, there are many times that this coverage, through the employer, simply is not enough. Since the health insurance contracts are not individualized, there are some very important parts of each contract you need to understand in order to determine if the coverage is right for you and your family.
Although employers legally have to pay at least 50% of the employee premium, the employee has the burden of paying 100% for his or her family. The cost of the premium for both a spouse and/or children can be very expensive. Instead of simply signing up your family, a good thing to look at is an individual policy for your family. The premiums on an individual contract can be quite reasonable; however, it is very important that you check into any pre-existing condition clauses that might be present, while also checking for any possible waiting periods.
There are some factors that you will want to consider when looking at a health insurance contract such as, the deductible and coinsurance. Some organizations will give you the opportunity to choose your deductible and your coinsurance amounts. For example, your might decide on a $500.00 deductible with an 80/20 coinsurance amount (you pay 20% after your deductible) for services rendered. What you need to consider is your own financial situation, ask yourself how much money can I afford to pay out of my own pocket should something happen?
Another important feature to consider is the doctor and hospital network being offered with the contract, after all, if your normal family physician is not in the network being offered you will either have to change family physicians or end up paying more money out of your own pocket for seeing a physician that is not in the network. Your organization may offer one other option but only if you can purchase a traditional contract that does not include any kind of network, in other words, you can choose to see any physician you want without any penalties.
Most health insurance contracts now include a doctor visit co-payment; however, what most people do not realize is that if any outpatient procedure is performed in the doctor’s office the charges will be claimed under your deductible and coinsurance on top of the normal doctor office visit co-payment.
One other important feature you will want to know about is the lifetime maximum benefit the contract will pay for your and your family combined. Many contracts carry a $1 million dollar lifetime benefit and although this sounds like a lot, when it comes down to the ever increasing cost of healthcare the $1 million dollar lifetime maximum is just a “drop in the bucket.” If you can get it, always try to obtain an unlimited lifetime maximum or at least a $5 million dollar lifetime benefit.
Purchasing any health insurance contract is important to you and your family. Whichever contract you choose, you should fully understand what you are purchasing and how it works. Remember, some of the more important features are the doctor/hospital network, the deductible and coinsurance (the amount you will have to pay out of your own pocket), the doctor visit co-payment and the lifetime maximum benefit for both you and your family.
Health insurance contracts make great bedtime reading; however, it cannot be stressed enough how much you really need to understand what kind of coverage you have and how to best utilize the benefits in your best interest.