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Health insurance

Health insurance or medical insurance is a form of insurance that pays the medical costs usually for yourself or yourself, your spouse, and your dependents.

Expanded Definition

For many, health insurance is offered to employees as part of a group policy. Once health insurance was a free benefit, but increasingly employees pay for the insurance by payroll deduction. Others must buy health insurance from agents on the open market. Individual policies are often more costly reportedly due to the lower claims experience of the young, healthy employees typically insured on group policies.

In the US most health insurance has a deductible, a copay, and a payment schedule. Most policies have a fixed benefit cap sometimes per year, sometimes total payments for your lifetime.

A deductible means that you must pay the first portion of the bill yourself. Then the insurance will pay benefits on the rest of the charges. Some have deductible per incident, but most policies have an annual deductible. Sometimes there is a single deductible; other policies will define several classes of service (hospitalization, out-patient, emergency room, medications, lab services, x-rays, doctor visits, etc.) sometimes with a separate deductible for each (Read more here).

A copay is a portion of the bill the insured must pay once the deductible is met. Some policies require a $20 copay for an office visit; some require the patient to pay a fixed percentage of insured changes, often 20%.

The schedule of payments specifies the services that are covered, often specifies procedures insured, and may specify the rate the insurance company will pay for the procedure. An unlisted procedure is not covered by the insurance. The insurance company often negotiates charges with its approved doctors and hospitals (and their approval often requires providing the service for the specified contract charge) but if charges exceed the schedule amount, you may be asked to pay the excess charges.

Some polices have annual caps as low as $5000. That would probably not cover anything more than a simple surgery at most hospitals. Most policies offered by major insurers have lifetime caps of about $1.5MM. Caps seem to rule out coverage of some high cost medical procedures(Read more).

Note that life-time caps are outlawed in the new Federal health care law usually called Obamacare. Other provisions include coverage for children up to age 26 in group policies held by parents through their employers. This law is being challenged in the Supreme Court. Watch for updates when the decision is announced.

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