Health Insurance 101: Your Questions Answered

Getting informed before you purchase health insurance is the best way to ensure the most affordable rate. Read on to shed some light on some of your tough questions.

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What are the different types of managed care?

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There are three main types of managed care.

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• Preferred Provider Organization (PPO):nIf you opt for a PPO, you have access to a network of health care specialists. You may choose a health care provider from within your network or a non-network health care provider. You pay more if you choose to go out of network.
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• Health Maintenance Organization (HMO):n An HMO requires a co-payment to an in-network physician. However, an HMO will not pay for services you receive outside the network. You choose a primary care physician and they become the gatekeeper to your health care. You must obtain a referral, if you seek specialty care.n
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• Point of Service (POS or Open Access HMO):nWith this insurance plan is, you can go out of network. But you won’t be reimbursed the full amount—usually only 50 to 80 percent.n
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What is an HSA?nnn

An HSA is a health Savings Account, which is used along with a High Deductible Health Plan (HDHP).

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If you choose an HSA, you put tax-sheltered money into a savings account. When you become ill or injured, you use the money in your account to pay for your medical care. If the cost of service exceeds the deductible of your HDHP, the insurance company pays the excess.

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This is a good way to save money on health care, because you only pay when you seek service and are not required to pay a monthly premium. However, if you have a health condition or partake in some dangerous hobbies, you are probably better off with a traditional plan.

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What’s the difference between a premium, deductible, co-payment and co-insurance?

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A premium is the total monthly or annual amount you pay toward your policy.

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A deductible is the amount you must pay before your health plan begins paying your health care expenses.

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A co-payment is the amount you pay when you receive care. The amount varies depending on your plan and whether you go to an in-network provider. Usually a percentage, co-insurance is the part of health care you pay along with your deductible.

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What is a preexisting condition?

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A pre-existing condition is usually a health issue that arose before you applied for coverage with a new insurer. Whether a pre-existing condition is covered by a new insurer varies from plan to plan, insurer to insurer. Some preexisting health conditions are excluded entirely, some are fully covered and some are covered after a specific amount of time. The Health Insurance Portability and Accountability Act guarantees coverage for pre-existing conditions if you are joining a new group plan from your employer and you were insured the previous twelve months.

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Will my health insurance pay for my prescriptions?

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In most cases, you will have to co-pay for prescriptions. Depending on your plan, certain types of prescriptions may not be covered, such as oral contraceptives or hormone replacement therapy. And if you opt for the generic version of the drug, you will pay a significantly lower price for a comparable product.

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Will my insurance rates increase as I get older?n

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As you age, your risk for certain health conditions increases. For example, women are more susceptible to breast cancer after age 40. Insurance underwriters take those statistics into account when determining your rates. But as health care continues to improve, certain conditions no longer guarantee you a higher insurance rate, such as high cholesterol or blood pressure.

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How do I find the right insurance at an affordable price?n

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Individual health insurance is still rather costly because most people are insured by their employer. If you are self-employed or your employer does not offer coverage, your best bet is to shop around. Use InsureMe to request multiple quotes from top insurance companies!

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