What Is the Purpose of Health Insurance?
Health insurance is a highly coveted benefit that is typically offered by an employer. Even if you are in relatively good health and rarely incur medical costs, having health insurance provides peace of mind and enables you to afford the medical care that you may need in the future. Also, for those in poor health, health insurance reduces the costs for regular doctor visits and daily medications.
Significance
Health insurance serves a number of purposes. Financially, it reduces the cost of medical care. For example, instead of paying over $100 for a visit to your doctor, you may only have to pay a tenth of that. As a result of the reduced financial burden, individuals may see doctors more regularly. For example, they may have an annual physical exam which might otherwise be avoided due to the cost. Also, not having health insurance can be rather worrisome. Certain activities may be avoided out of fear of getting injured.
Function
Health insurance companies are paid a specified amount, either quarterly or monthly. This fee is called a premium. Premiums are paid in advance for future coverage. Upon arrival to see a doctor, you are typically asked for a copy of your health insurance card. The purpose of this is to verify that you are covered and determine the financial responsibility of the patient. Patients with health insurance typically pay a co-payment upfront. Once services are provided, the charges are listed on a standard claim form and submitted to the insurer for payment.
Features
What is covered and what is not covered under a health insurance contract varies. Coverage for certain things, such as prescriptions or durable medical equipment (DME), can be added to a contract as riders. This would increase the premium. Also, some services may be subject to a deductible. A deductible is the amount of money that you have to pay out-of-pocket before your insurance company makes any payments. Ambulatory procedures, for example, may require you to pay a few hundred dollars upfront.
Considerations
Although health insurance serves to protect individuals from incurring large medical bills, patients do have some restrictions in their coverage. For instance, medical care may have to be provided by a doctor that is in the insurance company's network of providers in order for your claim to be paid. Also, your insurer might withhold payment for procedures that were not pre-approved to be performed, such as surgery. Benefits for physical or mental health therapy might be limited to a certain number of visits; once the benefit limit is met, the insurer will no longer pay for additional visits.
Warning
Living without health insurance can be extremely anxiety-ridden. Worrying about becoming ill or injured can be stressful. Not only is there a greater financial burden for medical care placed on the uninsured, but they are often required to pay up-front in order to receive care. Also, nobody is immune to illness or injuries. An accident can happen at any time and result in numerous medical bills. If these bills are not paid, collection agencies may become involved and lawyers may file suit.
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