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1. What is health insurance?
Health insurance is a contract in which the insured and the insurer shares risk.
The insured pays a premium to the insurer who pays a predetermined amount of
money toward health care expenses.
2. What is the difference between a HMO and a PPO?
An HMO (health maintenance organization) and a PPO (preferred provider
organization) are both managed care organizations that use certain procedures to
manage the accessibility, cost and quality of healthcare. The levels of service
and flexibility vary from plan to plan.
An HMO shares financial and delivery risks relating to health care services with
those who are enrolled in a healthcare plan in exchange for a fixed, prepaid
fee.
A PPO is a similar arrangement but the organization provides coverage for
services through a preferred provider at a discounted rate. Services obtained by
a provider who is not a preferred provider may be covered, but the rate may be
substantially higher.
3. What is a deductible?
A deductible is an amount of money that an insured person pays out-of-pocket
before the insurance company becomes responsible for any benefit payments.
4. What is the difference in a co-pay and co-insurance?
Co-insurance is the portion of costs that are shared between the insured and the
insurer. It is common for an insurance company to pay 80% with the insured being
responsible for the remaining 20%.
A co-pay is a predetermined amount of money that the insured pays out for
certain services. For example, if you have a $20 co-pay on doctor’s visits, you
would pay the doctor $20 for every visit and the insurance would pay the rest of
the doctor’s fee for that visit. Special services, like x-rays or lab work,
aren’t usually covered under the co-pay for the doctor’s visit.
5. Are co-payments counted as part of the annual deductible?
No, most insurance policies that have co-pays and deductibles handle doctor’s
visits and hospital stays separately. You have to read the terms of your policy
to be sure, but in most cases, a co-pay applies to the doctor’s visit and the
deductible applies to hospitalization or other healthcare services.
6. My health
insurance company is non-renewing my policy. Can they do this?
If your policy is not guaranteed renewable, the company may exercise their
right to non-renew your policy. It is important that you very carefully read the
section of your contract concerning cancellation.
7. How long does a company have to pay a medical claim?
The insurance company has 45 days to either pay or deny a claim once proof of
loss has been received, unless additional information is requested.
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