The Insurance Pedaler

Life, Health, and Travel Medical Insurance

Certified "" Agent for the FFM "Marketplace"

Health Insurance

Health insurance comes in many forms. The most typical form of health insurance is what is referred to as "Major Medical" insurance. Major medical covers virtually anything that can happen to you and will pay for the related expenses of the medical care and hospitalizations associated with those illnesses or injuries. Reimbursement or direct payment to healthcare providers for those expenses are almost always subject to an annual deductible and co-insurance.

There are other forms of health insurance, most of which are referred to as indemnity policies. Most of us have seen the television commercials with the AFLAC duck. The duck is trying to convince you--as only ducks can--that you should have this type of insurance which essentially pays you a lump sum if you contract any specific disease, injury, or illness that is specifically covered under the plan you have purchased. If the disease or illness you get is one of the ones named, you get paid. If it is not covered, then you don't get paid. The major advantage of an indemnity plan, is that if you are "lucky" enough to get one of the diseases covered, the money comes to you directly and you can use it for anything whether it is related to your medical care or not. Indemnity insurance is not a replacement for major medical insurance, but is essentially considered supplemental insurance.

A few terms you should know:

  • Deductible: This is the amount of money you will have to pay for your covered losses (expenses related to your injury, illness, disease) before the insurance company will begin paying anything toward your medical expenses. If you have a deductible of $2,500, then you will have to pay $2,500 toward your medical bills first, then your insurance company will begin paying the balance--subject to a "coinsurance percentage."

  • Coinsurance, usually a percentage, is the amount you will have to pay once the insurance company begins paying for your health care costs. If you have a 20% coinsurance, then after you pay your deductible, you will be paying 20% of most covered expenses (some specific ones may be covered fully by the insurance company) up to the maximum annual "out-of-pocket" amount.

  • Out-of-pocket: This figure is important to pay attention to when you are signing up for your health insurance, because should you have a bad year in terms of your health and run up huge medical expenses, once you have paid out money equal to the maximum out-of-pocket amount listed in your insurance policy declarations, the insurance company will pay 100% of virtually all covered expenses thereafter for the remaining part of the calendar or policy year.

  • Co-Pay: This is usually an amount you will pay out of pocket for doctors visits and other specific covered items, such as prescription drugs. A co-pay is usually a fixed amount for each visit or prescription drug. Co-pays for medical services do not usually apply toward your deductible, but do accumulate toward your maximum annual out-of-pocket amount.

  • Lifetime Maximum: This is maximum amount an insurance company will pay out for any and all coverages over your "lifetime" with that insurance company. Under the Patient Protection and Affordable Care Act (PPACA, ACA, or "Obamacare"), policies subject to this act no longer have lifetime maximums. If you have a "grandfathered" policy, you may still have a lifetime maximum associated with your policy.

  • Pre-existing Conditions: This was the major victory won by the PPACA. Insurance companies can essentially no longer refuse to offer you health insurance or limit coverages due to medical conditions that you already have or had prior to applying for insurance with that specific company. Insurance companies can no longer hold a policyholder "hostage." If they raise their rates for the new policy year so high that you can find the same coverage for less money elsewhere, the new insurance company cannot restrict your coverage based on any "pre-exisiting" medical conditions you bring with you.

The PPACA also eliminates the largest single largest cause for people to be uninsured in the United States. Prior to "Obamacare" an insurance company (and they all fed out of the same trough) could refuse to accept you as a policyholder if you had anything major wrong with you either currently or sometimes even in the past.

  • Note: Deductibles and out-of-pocket amounts are for one year. At the beginning of the next calendar or policy year (usually, calendar) your deductibe and out of pocket amounts begin over again. Some companies will actually carry over a percentage of these into the next policy year if you were so healthy that you did not even come close to your deductible amount in total medical expenses