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What is the average cost of private health insurance? Before we answer this question, let’s have a look at what is private health insurance and how it works?

When it comes to health insurance or any kind of insurance, there are a lot of terms that might confuse you. Before you make a decision, you should have knowledge about these terms and how they apply to you?

Before we move to the cost of private health insurance, you should know the basics so you understand what you’re getting for your money.

Let’s dive into the details!

What is Private Health Insurance?

In simple words, private health insurance (PMI) is health insurance that is not offered by the federal government or state. It can be acquired by private entities like your employer, a licensed broker or a private insurance company.

While on another hand, public health insurance is offered by the state or the federal government. In fact, a private health insurance plan can be a little more expensive, because you’re paying the entire cost.

Health insurance is a necessary part of your financial life because it covers most of your medical expenses.

Check Out: What is Health Insurance? How does it work?

When Do I need Private Health Insurance?

Here are a few scenarios when you need private health insurance plan.

  1. When You Turn 26:
    Under the ACA (Affordable Care Act), you can continue using your parents’ health insurance. But when you turn 26, you’re required to get your own health insurance policy.
  2. Part-Time Worker:
    If you’re a part-time worker, you should apply for your own health insurance policy.
  3. Unemployed or Lost the Job:
    If you’ve lost your job, you can still continue using your employer’s health insurance policy. But in this case, you’ll be paying the full cost that makes it more expensive. In this case, you should get your own private health insurance policy.
  4. When You’re Retired:
    When you retire, you’re no longer eligible for your employer’s health insurance policy. In this case, you need to get your own private health insurance policy only if you’re under 65 and not disabled.

Types of Private Health Insurance

There are 4 types of private health insurance plans.

  1. Individual Health Insurance:
    This type of private health insurance plan covers only one person’s medical expenses.
  2. Family Health Insurance:
    This insurance plan covers the entire family including your partner and children.
  3. Joint Health Insurance:
    This plan covers only two persons, like you and your partner.
  4. Children Health Insurance:
    Through this health insurance plan, your children can have their own private health insurance policy. Children can also keep enjoying parent’s health insurance until they turn 26.

How Does Private Health Insurance Work?

Private health insurance works in the same way as other insurance policies. You pay premiums monthly or annually for your health insurance policy. The cost of this premium may vary depending upon the type of insurance policy you have.

Each insurance policy has certain limits like how much claims you can make in a year.

Once you file a claim for your private health insurance, the insurer verifies the claim. If your claim is valid, you’re paid. In the case of health insurance, your insurer pays a certain percentage of overall medical service expenses.

There are a few terms associated with an insurance policy that you must understand before you buy a health insurance plan.

  • Premium:
    The amount you pay each year for your health insurance policy.
  • Deductible:
    The amount you pay before your medical insurance policy pays for your expenses.
  • Copay:
    The fixed amount you pay each time you get a medical service.
  • Coinsurance:
    Coinsurance is the percentage of total medical service expenses. You need to pay this amount.

Check out the detailed explanation for these terms here.

What Does Private Health Insurance Cover?

When it comes to health insurance policy coverage, there are a few limits on the types of conditions and treatments. These limits may vary depending upon the type of policy you have.

Medical insurance policies cover only acute conditions, usually chronic conditions are not covered by the medical insurance policy.

  1. Acute Conditions:
    These conditions are only for a temporary period of time. Acute conditions may include hip pain or joint pain etc.
  2. Chronic Conditions:
    Chronic conditions are those conditions that are permanent. These conditions can’t be treated, they are only managed like asthma or diabetes, etc.

Inpatient Cover Vs Outpatient Cover

Usually, private health insurnace covers the only inpatient treatments like a hospital stay overnight, hospital bed, etc.

Typically, outpatient is not covered by PMI. Outpatient expenses may include blood tests, x-rays, etc. Outpatient expenses can also be added to your private health insurance policy with extra cost.

Cost of Private Health Insurance

The cost of PMI is not straight forward, it depends upon many factors like

  • Age
  • Lifestyle
  • Medical History
  • The type of coverage you want
  • Whether you choose a high or low deductible
  • Whether you’re buying insurance for yourself only or for the entire family

On average, Americans pay $321 monthly health insurance premiums for a single person and $833 premium for family plans.

Conclusion:

Getting private health insurance is not as easy as getting public health insurance. However, once you know the complete detail of private health insurance (PMI), it’s not that tough. Cost of Private Health Insurance varies depending upon different factors like your age, medical history, etc. You can choose a health insurance plan that fits your needs and budget.

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References:

https://www.cbo.gov/topics/health-care/private-health-insurance
https://www.investopedia.com/articles/pf/08/private-health-insurance.asp
https://www.insure.com/health-insurance/individual-health-coverage.html

Domestic Partner Health Insurance, what does it mean? How it works and what are the benefits? We’re going to dive into domestic partnership health insurance details. But before we move further, let’s explore what is a domestic partnership?

What is a Domestic Partnership?

A domestic partnership is a relationship between two persons living together but they’re not married to each other or anyone else. They can be either same-sex or opposite-sex partners. They share a common domestic life and they support each other in financial and emotional life.

Although a domestic partnership is not like a marriage, the persons in a domestic partnership can enjoy some benefits of marriage. For example, you can carry your partner on your health insurance plan or you can take a medical leave to take care of your domestic partner, etc.

Laws for domestic partnerships vary from state to state. For example, some states require one of the persons to be at least 62 years old.

Who Qualifies As a Domestic Partner?

There are are no specific guidelines defining a domestic partnership. Each state has its own guidelines and benefits for a domestic partnership. So, Who Qualifies As a Domestic Partner? The answer is up to the state you’re living in.

However, the definition of a domestic partnership is almost the same, for all states, which is: Two persons living together, and sharing a common domestic life, but they are not married to each other or to anyone else.

Benefits of Domestic Partnership

As the definition of domestic partnership varies from state to state, the benefits of domestic partnership also vary in different states. However, the most common benefits are:

  • Eligible for family health and dental insurance plans
  • Can take family leave to take care of sick partner
  • Eligible for inheritance rights and death benefits
  • Financial and property rights
  • Eligible to make financial and medical decisions for your partner

Some employers provide domestic partnership benefits even if the state doesn’t recognize it. You get these benefits only when you formalize/register your domestic relationship either with your state or employer.

How To Register as Domestic Partners?

You can formalize your domestic partnership by registering with your state or with your government. If your state doesn’t recognize the domestic partnership, you can register privately with your employer.

To get registered as a domestic partner, you must fulfill the following requirements:

  • You both must be at least 18 years old
  • Unmarried
  • Your relationship must be at least 6 months old
  • Sharing common domestic life
  • Not in a domestic partnership with a different person
  • Not related by blood

Once you fulfill these requirements, you will fill out an application in front of witnesses. After that, you visit a notary public who varifies both persons through state identification like driving license, etc.

After paying a fee (varies from state to state), your domestic partnership is now registered.

If you don’t formally register your domestic partnership, you may not get as benefits as a registered domestic partnership gets.

What is Domestic Partner Insurance?

Domestic partner insurance or domestic partner health insurnace is when the health insurance policy extends the benefits from a spouse to a domestic partner. These benefits are also available for the children of this unmarried couple.

Check out Detail:  What is Health Insurance and How it Works?

To qualify for domestic partner health insurance you must fulfill the following requirements:

  • At least 6 months old relationship
  • Unmarried and not related by blood
  • You must be a couple in the public eye or public recognizes you as an unmarried couple living together
  • You’re financially interdependent and support each other

Domestic Partner Health Insurance Tax Implications

Generally, for a spouse or dependent, health insurance premiums are tax-free. But in the case of domestic partner health insurance, these premiums are taxable. Because domestic partnerships are not recognized at the federal level.

Disclaimer:

The aforementioned information is collected and analyzed from different resources, to get further details about domestic partner health insurance, please visit your insurance provider.

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Picture Credit: Pexels

Resources:

https://www.thebalance.com/domestic-partner-insurance-101-2645680
https://www.insure.com/health-insurance/domestic-partner.html
https://www.healthsherpa.com/blog/health-insurance-benefits-for-domestic-partners/

 

What is Health Insurance?

Health insurnace is a type of insurance that covers the cost of policyholder’s medical expenses including surgical, dental, hospitalization expenses, etc. Basically, health insurance helps you pay a portion of medical expenses. Just like car insurance, you pay a monthly premium for your policy. Health insurance also covers you in case of an accident.

Just like other insurance plans, the premium cost for health insurance varies according to the type of coverage you choose.

When buying a health insurance policy, keep the following consideration in your mind.

Components of a Health Insurance Policy:

  1. Premium:
    Premium is the amount/ fee that you pay for your coverage. This premium is calculated by the insurance providers based on different factors like gender, age, and medical history. If you choose to pay less premium, you will be paying high medical expenses out of your pocket and vice versa. You need to pay these premiums on the due date. If you don’t pay the full premium on the due date, your health insurnace policy may get suspended or canceled.
  2. Deductible:
    Health insurance deductible is the amount that you pay out of your pocket before your insurance policy pays for medical expenses. A deductible can be $500 or sometimes it’s much higher. This amount varies according to your selected coverage. So, when buying health insurance, ask your insurance provider for these deductibles.
  3. Copayments:
    Copayment, also know as copay, is the amount of money that you pay each time you visit a health care center. You pay this amount at the time when you receive a health service. Copay varies according to the type of health service you received. This is the fixed amount you need to pay and the rest of the bill is covered by your insurance policy. For example, if your copay is $50 and your health service total fee is $500, you will pay $50 and the rest is paid by your insurance policy.
  4. Coinsurance:
    In addition to deductibles and copayments, you also pay coinsurance. Coinsurance is the percentage that you pay for the health service you received. Coinsurance is different from copay because copay is a fixed amount while coinsurance is the percentage of your share in medical service’s expenses. For example, the total cost of your health service is $2000 and the copay is $50. The insurance company pays 80% of the remaining cost ($1950) or $1560. The total amount you would pay out of your pocket is copay($50) plus 20% ($390) which would be $440.
  5. Exclusions:
    Sometimes health insurance policies don’t cover all of the medical expenses such as tummy tucks or facelifts etc. Before buying a health insurance policy, you should ask for all these exclusions from your insurance provider.
  6. Coverage Limits:
    There is a maximum coverage limit associated with your health insurance policy. These limits can be monthly or annual.

How Does Health Insurance Work?

Health insurance policy protects you from paying the full amount of your medical services and expenses like pre-hospitalization, stay and post-hospitalization.

Health insurance policy comes with different coverage options, you can choose the plan that fits best for your needs. Different insurance plans impose a condition that you receive health services from a certain network for the highest level of coverage. If you choose health service outside of this network, you will be paying a high percentage of the total cost.

Sometimes, certain health services need preauthorization otherwise your coverage can be denied. All these conditions and limits are mentioned in the contract between you and your insurance provider.

Importance of Health Insurance

Having health insurance is an important part of your financial life because medical services are always very expensive. Health insurance is not important for yourself, it also important for your family. Because it becomes a tough situation when the sole earner is in a hospital bed.

Health insurance is so important that in some countries, like the United States, health insurance is included in the employer’s package.

Benefits of Health Insurance

  1. Financial Protection:
    Having a health insurance policy protects you from financial attacks like medical bills that are very expensive. You only pay premiums, deductibles, and copay, the rest of the medical bill is paid by your insurance policy.
  2. Cashless Claim Benefit:
    Many insurance providers provide cashless claim benefit options. In this option, you are required to get admitted to the insurer’s network of hospitals. All of your expenses will be settled by your insurer.
  3. Easy To Find a Doctor:
    If you’re a traveler and you’re out of your country where you’re in a medical emergency, your insurance provider can help you find a nearby doctor/hospital within the insurance provider’s network. Not only it helps to find a doctor/hospital but it also saves a lot when it comes to medical bills.
  4. Peace of Mind:
    Health insurance policy gives you peace of mind that you’re always covered when you’re at a very vulnerable point in your life. Your insurance provider will be there to make sure your treatment is started immediately.

Bottom Lines:

Having good health is the most precious asset, and we all protect it at all costs. Health insurance policy contributes a lot when it comes to paying expensive medical bills.

If you have any confusion about the health insurance policy, let us know in the comments section below.

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