Individual healthcare insurance
What is Health Insurance?
Health insurance as the same indicates is insurance for health. Although health insurance does not guarantee good health, it secures the payment of expenses incurred to regain health from illness, disease and accident. In case of the above three conditions being serious beyond a certain level, an individual is required to get admitted in a hospital and undergo the much needed treatment in order to recover health. While this hospitalization is necessary, it also requires a person to stay in the hospital, the nursing care received, the medications, doctor's fees etc. In case the hospitalization was done in a critical condition or was necessary for undergoing a surgery, a lot of other charges gets added up to the list of expenses.
Health Insurance- an indispensable necessity for everybody: It has been rightly said that ill health and misfortune does not announce and come. Health is Wealth a simple statement, but so full of meaning and is closely associated with creating and maintaining wealth. But it is very rarely the humans realize that maintaining good health is synonymous with creating and managing wealth. Wealth can be maintained only if one enjoys good health. The worst nightmare that anyone can have is when a family member is hospitalized. In the complex web of uncertain life, nobody can be sure what will happen next.
A seemingly minor ailment can get worse and turn into a major one. The worst happens when the prime earning member of the family is hospitalized. Since the past decade, mankind has witnessed an increasing incidence of lifestyle related diseases coupled with rising medical costs. Even though there has been increased awareness of health issues, many individuals rarely, is ready to meet the costs involved in staying healthy. A lot of people consider insurance as a cost as against considering it as an investment which would definitely come handy in times of need. Admittedly, medical treatment is seldom a subject of choice and comes more as a compulsion. It is an irony that despite medical treatment presently available for almost any type of illness or disease, the cost of the treatment continues to be beyond the financial means of the majority of the population. Therefore, every year across the world a millions of people die suffering from various diseases. Obviously, the deaths happen not due to lack of treatment facilities, but rather due to the fact that majority of the people are unable to afford the much needed treatment.
Hence, it goes without saying that a need exists for a provision to cover individual lives for the financial costs associated with medical treatment. It is interesting to note that the concept of health insurance which was initiated just as an instrument for reimbursement of the hospitalization expenses incurred for the insured person has evolved into an instrument that provides comprehensive financial protection in the event of hospitalization. Individual Health Insurance Plans nowadays cover end-to-end hospitalization expenses. All these and more thoughtful features introduced in the health insurance plans are rather appreciated. Nevertheless, sometimes a large majority of the insurable population fails to realize the indispensability of the adequate health insurance cover. Since health insurance is not mandatory like motor vehicle insurance cover, several people raise doubts regarding the importance of these plans believing that they might never require these, since they are in good health.
Almost all health persons indeed face the risk of ill health, disease and accidents requiring hospitalization and medical treatment. Practically, this hospitalization as also treatment comes at a substantial cost and in the absence of an adequate health insurance cover often needs the concerned individual or their family members to liquidate their hard earned savings to pay for these costs. Usually these savings are looked upon as the basis for the achievement of the very crucial financial objectives of one's life like purchasing a house, higher education of children, or provision of necessary income for oneself during the post-retirement years. A drain on these savings because of unexpected medical expenses can severely affect and sometimes derail achievement of the above financial objectives. The use of savings to pay for heavy medical bills could outcome in the above goals of life being postponed to a later stage.
The grim reality could be that in worst cases, these financial goals might not become achievable and would have to be completely abandoned to meet the exorbitant medical expenses. The above would be a consequence of not having a health insurance cover in case an individual has resources, though limited, to shoulder the costs of a proper medical treatment needed for self or the dependents. Although not much realized, ill health can practically result in the exhaustion of the limited financial resources which an individual has, so as to pose a threat to even the financial solvency of a person, leaving aside the non-fulfillment of the financial objectives. Hence it is the negative financial consequences of the absence of health insurance cover that need an adequate amount of insurance cover to be taken by an individual. Health insurance promises the financial basis for recovering from an illness or an accident with the needed medical attention and care.
Type of Health Insurance:
A health insurance policy constitutes a business contract between a insurance company and the insured or his employer in case it is a group insurance. The type and the amount of health care costs that are going to be covered by the health insurance company are spelt out in the offer document. The insured person's obligations might take a lot of forms like
(i) Deductible: This is the amount which the insured person must pay from his own before the health insurance company pays its share. For instance, an insured might be required to pay $500 deductible annually, prior to any of their healthcare is covered by the health insurer. (ii) Co-payment: This is the amount which the insured person is required to pay prior to the health insurer makes payment for visits or services. For instance, an insured person might be required to pay $50 as co-payment for the visit of doctor or for obtaining a prescription and it is important that the co-payment is paid every time a particular service is obtained.
(iii) Co-insurance: In place of, or in addition to, paying a fixed amount as co-payment, the co-insurance is a percentage of the total cost which the insured individual might also pay. For instance, the member might be required to deposit 20% of the cost of a major medical emergency over and above the co-payment, while the insurance company deposits the remaining 80%. In case a upper limit is present in co-insurance, the policy holder might owe a very small amount, or a huge amount, depending on the real cost of services they get.
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