How Good is Your Health Insurance Policy Really?

 How much do you know about your health insurance policy? If your company provides your health insurance then you probably know just about as much as most people. You know the doctors to use and how much you have to pay before the insurance begins. For those that purchase their health insurance policy, then you have a very different situation.

The cost is the first difference that most people notice if they switch from a group plan. When your employer offers health insurance, the cost is usually a lot lower if the group is large. One of the reasons is that they spread the risk among a large group of people. The second includes the fact the cost of billing is lower because the company does the collection of premiums. The biggest reason for the price difference is that the employer pays part of the premium or all of it in very rare instances.

Frequently the coverage is broader in a group plan. The individual health plan seldom contains dental, prescription, and eye care. The deductibles are often higher in an individual health insurance plan and coverage more limited. Often well-baby care, wellness care, including physicals and smoking cessation, and maternity are not part of the policy. Many employers discovered long ago how to keep costs down and increase coverage and you can do the same thing when you buy your health insurance policy.

Health insurance policies vary widely so you have to make some decisions about the type of coverage that you want. Do you want one that just covers major medical, the services of a hospital, and outpatient surgery, or do you want coverage that picks up the expense of doctors and routine physicals covered? When you include additional options and get a more comprehensive health insurance policy, the price goes up. The insurance company calculates the premium by presumed expense. They expect to pay more, because more people use the doctor and wellness care, so they increase the price accordingly.

Another way that companies keep the cost of the health insurance policy low is to use Health Maintenance Organizations or HMOs. The doctors and hospitals in the group agree to a discounted charge, so the insurance company reduces the amount they charge the company. These types of plans are also available to the individual and create cost savings without cutting corners. Often there is a co-pay for doctor's visits and hospitalization and a few extra perks are in the package.