Nongovernment medical insurance pays some or all of a patient’s medical bills. It can be purchased individually or by an employer, and is typically obtained as an employee benefit. Some policies require coordination of benefits, which prevents the patient from paying double for medical care. This will determine which insurer pays the primary bill while the other one covers the remainder. Often, a patient is also required to make a copayment, which is a portion of the expense, when seeking medical care.
Cost-sharing is a major cost of care, but is not the only cost involved. Out-of-pocket expenses can include premium payments, coinsurance, and copays. Regardless of your insurance plan, understanding how much your plan covers will help you make the right medical decisions. For example, your insurance company may require you to use an in-network hospital if you need surgery. But most health plans will cover the cost of surgery and emergency room visits if you’re seen by an in-network physician.
Most health insurance plans cover prescription drugs if they are ordered by a physician. These drugs are usually purchased from pharmacies and reviewed by the FDA, which sets up a formal approval process. The FDA also sets up a list of commonly prescribed drugs called a drug formulary. The list of prescribed drugs is broken down into tiers, based on cost. The lower the tier, the lower the cost of the medication. The same is true for dental care.
Preventive care and wellness services are covered by most plans, although some may require an out-of-pocket expense. Ambulatory care consists of outpatient medical services, such as checkups, physical therapy, and counseling. Chronic disease management and pediatric services include oral care and vision care. You can also buy a short-term medical plan for a time period and use it to cover any gaps between your regular medical coverage. Just make sure to research the coverage before you decide to sign up for short-term health insurance.
A copayment is a percentage of the total cost of a medical service. In other words, you pay 20% of the bill, while the insurance company pays the other 80%. The difference between a copayment and a coinsurance is the amount that the insurance company pays, after the deductible. In some cases, coinsurance has an upper limit and limits the cost of care. If you are healthy, this may not be an issue.
Pre-authorization is required by most health plans. A prior authorization allows the insurer to check the necessity of the medical service before paying for the procedure. In other cases, it helps prevent patients from spending too much money on medical procedures that haven’t been proven to work. Some health insurance plans also require prior authorization before paying for procedures that require a physician’s approval. Depending on your medical condition, the procedure can be a necessary one for your health.
In some states, catastrophic medical insurance plans cover preventive services. For example, a catastrophic plan will cover the costs of three annual visits to a primary care physician. In addition to these preventive services, catastrophic plans may also cover a few additional services. For this type of medical insurance, you must be eligible for subsidies. If you don’t qualify for subsidies, you can also call one of the major medical insurance companies and ask about their coverage.