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Health Coverage: What Is It and Why You Should Care

Health coverage is a policy or contract that you, as a customer, pay a premium to receive. The premium covers the cost of services and benefits negotiated by the health plan on your behalf. Your health plan can provide prescription drug coverage, dental care, vision insurance, and other forms of medical care.

Employer-sponsored plans: These are health insurance provided by a person’s employer. These plans are offered to employees at little or no cost to the employee, although premiums may be deducted from paychecks. The benefits and costs of these plans vary widely depending on how much the employer is willing to spend and what types of coverage the plan offers.

Publicly funded coverage: Publicly funded, or government-funded, health care is provided by local, state, and national governments for low-income groups and people who can’t afford other types of health plans. These programs include Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP). They also include a variety of Veteran’s Benefits and other more regionally focused programs.

Health Maintenance Organization: A Health Maintenance Organization (HMO) is a type of health insurance that provides coverage for preventive care, primary and specialty care, prescription drugs, pediatric care, and other services. An HMO generally requires members to use its network of doctors, hospitals, and other health providers. Members must pay more out-of-pocket if they use medical providers, not in the network.

Exclusive Provider Organizations: (EPOs) are health plans that contract with healthcare providers to reward them for providing quality care at a lower cost to the plan. These providers have contracted with the insurance company and agree to charge a fixed fee for their services. This fee is often substantially lower than the service’s actual cost, meaning that plan members will get a significant discount on their care. Because of the reduced fees, EPOs often provide one of the lowest-cost options available when it comes to medical coverage, although it’s still important to compare your options and see what works best for you.

Point-of-Service (POS) Plans: These are the newest type of health care plan available on the market and can be confusing to understand. They are similar to traditional HMO plans in that they require you to use doctors, hospitals, and other healthcare providers within a specific network. POS plans work a little differently than traditional HMO plans because they allow you to visit an out-of-network doctor and pay a higher co-pay or co-insurance. But your insurance will do “internal” billing of the provider.

A POS plan works similarly to a traditional High Deductible Health Plan (HDHP) in that there is an annual deductible for medical expenses before any coverage kicks in, says ThomsonReuters. However, there is no maximum out-of-pocket limit like under an HDHP. When you sign up for the plan, the annual deductible and maximum out-of-pocket expenses are capped at a certain amount based on your family size and deductible options.

What are the Benefits of Having a Health Coverage?

1. Cost-effective

It is more cost-effective than going to the hospital if you don’t have coverage. If you don’t have coverage and you go to the hospital, you need to pay for everything yourself since sometimes it is hard for the family member to pay for your treatment and medicines since they are suffering from illness too or sometimes, they are old already that their income is low than before. But with health coverage, everything will be covered, so you won’t need to worry about the payment anymore. It will be cheap for you and your family members, who will definitely appreciate it on your behalf.

2. Help you avoid debts

Health coverage can also help you avoid debt if you get sick or injured, says CitizensAdvice. With insurance, the cost of procedures and prescriptions is usually covered by a health plan or an employer. You don’t have to worry about paying upfront. Even urgent care visits can rack up hundreds of dollars in charges often covered by health insurance plans. Unpaid medical bills are one of the most common reasons for going into personal bankruptcy today. What’s more, when dealing with a serious condition like cancer or diabetes, your bills could quickly mount into the six figures without insurance coverage.

3. Gives you peace of mind

Health coverage provides you with peace of mind by enabling you to take care of any medical emergency that might arise. By having health coverage and going the extra mile to keep it up-to-date, you ensure that if something were to happen to you, you would be taken care of immediately. You can rest easy knowing that no matter what happens, you and your family are protected by your chosen insurance policy. Plus, many people who do not have health coverage are not even aware that they could be receiving federal funding and subsidies to help them get affordable health insurance plans.

4. Access to better doctors and hospitals

Having health coverage will give you access to higher-quality healthcare. Most health plans have tiered levels of providers and hospitals. With lower-tiered plans, you might not have access to the best doctors or hospitals. If you want the best treatment available, you will need to pay out of pocket for a high-tiered plan. In addition, if you require emergency care and do not have insurance, you might be turned away because they do not accept non-insured patients.

5. Helps manage your chronic conditions

Having health coverage can help you manage your chronic conditions. For example, if you have diabetes, you might need to fill your prescriptions, get blood work done and go to the doctor regularly. Health insurance means you will never have to worry about how to pay for these things as long as you are covered.

Key Takeaway

Having a health plan also means you won’t be stuck with outrageous bills in an emergency or unexpected condition. Having a health plan gives us peace of mind knowing that we will not be facing thousands of dollars in expenses due to one accident or illness.

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