Health Insurance Obligations That You Need to Know

What Is Health Insurance
Photo by Chris Potter – CC BY 2.0

A formal contract between an entity that provides insurance services and an individual that seeks to benefit from this agreement, a health insurance policy can be renewed on a specific time frame. It can be renewed monthly or annually depending on a specific insurance agreement contract. No matter what type of health insurance agreement, the type of healthcare coverage and its costs are covered in advance prior to the contract signing. Clients are made aware of the health insurance specifics via specific documents or most commonly via Evidence of Coverage pamphlets.

When we speak of standard health insurance policies, there are also standard obligations that must be fulfilled by the insured individual. The most common forms of obligations are:

Deductible
In simple terms, a deductible is just the out-of-pocket payment amount that the insured must give to the health insurance entity. This is paid before the insurer pays its share for the benefit of the insured.

Premium
A premium is the particular amount that the insured or a sponsoring entity needs to pay monthly for the purchase of health coverage.

Co-Insurance
As opposed to paying a fixed co-payment, or in addition to paying this amount, policy-holders can just pay the co-insurance. The co-insurance is defined as a specific percentage of the total payment cost that the insured must pay.

Coverage Limits
There are times when health insurance policies, or at least some types, will pay for healthcare insurance only up to a certain financial limit. It is expected that the insured should pay any type of charges in excess of a specific healthcare plan’s maximum service payment. In relation to this, there are some insurance companies that provide schemes that are lifetime by nature. When the maximum benefit that can be covered by a health insurance policy is reached, the plan will stop and the insured must pay every remaining cost.

Exclusions
This means that not all services are covered a by a specific health insurance plan. Due to this, the policy-holders, out of their own pockets, must pay for the maximum cost of services that are not covered by their insurance plan.

Capitation
Capitation is actually the particular amount that must be paid by a policy-holder to a particular health insurance entity. With this, all members of the insurer are agreed to be treated by the healthcare provider.

Prior Authorization
This is just a certification that proves the services that an insurer provides to an existent medical service. Obtaining this certification means that the policy-holder is bound to pay for the service that will be provided by the insurer. However, there are small routine health services that need no authorization to materialize.

There are many other forms of obligations that the policy-holder should fulfill to benefit fully from a specific health insurance service. However, these are the most basic forms of obligations that you should be aware of before getting a health insurance deal that would suit your needs. You must also keep in mind that comparing price quotes is also important if you want to get the best insurance deal for you.

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