How Does Health Insurance Work?

Many people have health insurance, but do you know how it works? It can be confusing, but with the right help, you will be on your way to having great, affordable coverage.

The Basics

Let’s start with this—what does health insurance do? If you have a policy, it will help pay for your medical expenses. This includes preventive care, medications, equipment, doctor visits, and more. Anytime you receive any medical treatments, your insurance plan may cover them.

Types of Health Insurance

The type of health insurance plan you get is the first and one of the main cost and coverage-determining factors. Two of the more common types (even if you’ve never heard of them) are Health Maintenance Organization (HMO) and Preferred Provider Organization (PPO) policies.

HMO policies are one of the more inexpensive options. You receive care within a network and see a primary care doctor for specialist referral. This may sound complicated, but it’s probably a system you’re familiar with—you just go to your doctor before you can see someone else. It’s simple, cheap, and a fantastic option for many people.

Preferred Provider Organization (PPO) is like the bigger version of an HMO policy. Instead of being limited to a primary care provider and modest network, you can see a specialist anytime you like, the network is bigger, and you even get some coverage if you have to go out-of-network. PPOs are more expensive than HMOs, but it is a great option for anyone looking for a full-benefit coverage plan.

There are also point of service (POS) and public program policies. POS is identical to HMO in every way, except it offers some coverage out-of-network (but you’ll pay more out-of-pocket for it). There are also federal- and state-run health insurance programs that you may qualify for based on your age, health conditions, income, or military service.

Health Insurance Costs

Your health insurance costs will vary based on the type of policy you get, your age, health, location, and your insurance provider.

A premium is a monthly fee you’re required to pay to keep your policy active. If you get coverage through your employer, they may pay part or all of your premium.

Your deductible is how much you pay before your insurance policy will cover the costs. Once you reach it for that year, they will cover their full share of your medical expenses, then it will reset the following year.

Copayments and coinsurance fees are your share of any given medical cost. Copayments are a flat fee, such as $40 for a doctor’s visit. Coinsurance is a percentage, so 20% of your total medical bill. There is an out-of-pocket maximum that, once you reach it, you will not have to pay anymore out-of-pocket.

Health Insurance Heroes—Call Kannonball

We make health insurance easy. Call Kannonball Insurance Solutions today to learn more about your health insurance options.