Health Insurance

What is Health Insurance?

Health Insurance is essentially a kind of insurance coverage that covers most of your medical and surgical bills in case of a medical emergency. The health insurance company estimates the risk by assessing the person’s overall health, financial status, and other variables, and then helps the insured create a financial plan.

This financial plan then dictates the amount of monthly premium that the person has to pay, which then distributes the cost and therefore also distributes the risk of paying an excessive medical fee in case of a medical emergency.

Why Health Insurance is Important?

Health insurance is very essential as it gives relief from financial stress that can occur during medical emergencies and health issues. Health-related issues are very common and always go side by side with all other matters of life. And it is also known that medicines and other medical health-related treatments are very expensive and difficult for a person to afford. Many countries like the United States of America have really expensive medical procedures and medications it helps people distribute the cost of their medical bills instead of paying an excessive amount of money at one point. So, it is mandatory to have health insurance to lessen the stress of medical expenses.  

Furthermore, the importance of health insurance can be seen by how it helps the insured pre-plan so that they don’t have to worry about expenses in case of an accident or any sudden medical emergency.

Types of Health Insurance:

There are different types of Health Insurance plans design for people according to their needs. These include Private and Public Health Insurance plans. Public Health Insurance Plans, as the name suggests, are insurance plans that are put forward by the government. For example, Medicare in the US.

Private Health Insurance plans are put forward by Private insurance companies like the United Health Group in the US. It is important to note that the more expensive the insurance policy the more likely it is to be available within a greater number of providers.

Popular Types of Insurance plans include

Fee for Service

The fee for the service plan is also called the indemnity plan. The best thing about this plan is that it allows the insured to choose the place they want to be treated in (i.e. the provider). This plan also leads to the insurance company approximately 80% of the costs and the insured has to pay the rest of the 20% which makes it an extremely convenient insurance plan.

Point of Service Plans (POS)  

The Point of Service health insurance plan is more concerned with the progress of the treatment. This means that it allows for the insured to choose whether they want to be treated by their primary care physician, any hospital in the insurance network, or even any hospitals and clinics that are out of the insurer’s network.

Preferred Provider Organizations (PPO)

As the name suggests, the Preferred Provider Organization health insurance plan allows the insured to receive treatment from any provider they choose.

This health insurance plan is similar to the indemnity plan. However, if the insured person chooses a provider that is out of the insurance company’s network then they might have to pay slightly more compared to what they would pay if they chose a provider from within the insurance company’s network.

What are the benefits of health insurance? 

As the rapid increase in pollution, population and climate change has diverse impacts on health-related issues and conditions, which also associate the medical costs. Health insurance plans may cover all the pre and post hospitalization charges. So there are many benefits of health insurance policy, five major advantages are the following: 

  1. Manage the medical expenses
  2. Manage the expenses of any critical illness
  3. Cashless treatments 
  4. Maternity expenses
  5. Tax-related benefits 

Mange medical expenses: Suppose an accident may happen and you got many injuries, or unfortunately you are diagnosed with a severe or critical illness. This news may break you as major psychological disturbance and the major stress can be the financial cost and the medical bills of medicines, lab tests or other procedures. In this worse scenario health insurance can be a relaxing factor as you may not need to worry about any billing expenses or financial burden of medical health care. Health insurance covers all the expenses related to medicines, stay admission and hospitalization.  

Manage the expenses of any critical illness: Health insurance also provides many compensations and supporting elements in case of critical illness, either in the form of either as a standalone plan or as a rider. These critical diseases are inlisted and covered by different insurance companies accordingly. But generally, these diseases may include kidney failure, loss of limbs, stroke or others. In this case, the insurance amount is provided as a lump sum amount, which can be used in managing the daily expenses, illness-related costs or other obligations. 

Cashless treatments: Some health care insurances include cashless treatments. As the insurance company and hospital have settled the policy about the expenses. And you just need to avail of the treatment without any stressing situation about financial costs. 

Maternity Expenses: At the time of childbirth stress doubled up for father and family. As there many expenses related to medicines and hospitalization. If you have health insurance then you don’t need to worry about these expenses.  

Tax-Related benefits: Health insurance plans are also supposed to provide tax-related benefits. Under section 80 D, if you are above 60 years you will get an amount of tax deduction for yourself, your spouse or children. This amount is a deducted amount from the premium of insurance which you may get at the end. 

Health Insurance in America

Health insurance in America is an absolute must for every citizen since the cost of medical expenses is very high. There are many people who have gone bankrupt trying to pay off their medical bills in America. Most American citizens rely on Private Health Insurance plans.

However, citizens from low-income families, older citizens, and war veterans who are not financially stable and cannot afford Private Health Insurance are given the option of Public Health Insurance programs such as Medicare and Medicaid.

Health Insurance in Lower-Income Countries.

There are very few low-income countries that have the option of health insurance for their citizens.  Rwanda is one of those few countries that provide Health Insurance to its citizens at very low costs. They do this through community-based insurance plans which have led to a significant population of the country (i.e. almost 90%) having access to Health Insurance.

Health Insurance has repeatedly proven to be extremely effective in helping people get safe, cheap, and effective treatment throughout the globe. It is extremely common in developed countries such as the USA, UK, and Canada. Despite this, health insurance is not as common in lower-income countries, however, efforts are being made to inculcate effective Health Insurance Plans in poorer countries. This will lead to improvements in their standard of living.

Thus, health insurance has proven to be an extremely useful initiative for all kinds of people around the globe.