The initial process that leads to settling with a specific health insurance provider can be mind-numbing but worth it if you take your time. So while you can quickly decide to settle with Medicare Advantage plans 2021, you must be sure to check on the insurance companies incurred claim ratio, the above is the amount that the insurance company will pay in a bid to settle the insurance claims within a year with regards to the total amount collected by the company as premiums.
Check out the insurance company’s solvency ratio, the above is the insurer’s ability to meet its debt and obligations through the determination of whether the incoming cash flow can comfortably cater to the liabilities. In short, is that you should settle with an insurance company that has a higher solvency ratio. You also have to check whether the health insurance company settles claims so that you can know whether the company will be able to settle the claim that you might make in the future.
The above is known as the claims settlement ratio, which is a percentage that reflects the total amount of claims that have been settled, but with respect to the total number of claims that have been received. Lastly, you will have to check on the network hospitals, and whether you will be able to get cashless treatment. So while the list of hospitals that are affiliated with the insurance company might be long, ensure that they are within your locality, in case of an emergency.
Basic health insurance terms to have at your fingertips
Now that you have decided to take this major step it is natural that you familiarize yourself with some of the health terms, to better understand your insurance policy.
- Copayment
Copayment is the amount of money that you will have to pay for receiving the different types of medical care. Copays, therefore, vary and were instituted to discourage the carefree use of medical services.
- Insurance premium
It is the amount of money that you will pay to be provided for with coverage for the medical conditions and treatments as described in the policy. The payments are normally due once a quarter or once a year and you will therefore have to pay the full amount.
- Deductible
Deductible is the fixed amount that you will pay for covered health services before your insurance plan pays. After paying the deductible, you will then be required to pay a copayment or coinsurance for the covered services. In simple terms is that your insurance policy will become active only after you have paid the amount of the deductible from your pocket.
A health insurance plan that has a good deductible is the HDHP, where if you had taken an individual policy, you will have to pay $1,350, but if you have taken a policy that covers your family then you will have to pay $2,700. Remember that the HDHP comes with a health savings account, and which better equips people to cover the high deductibles using the savings in their HSA accounts.
- The out of pocket maximum
The out of pocket maximum is the most amount that you will have to pay every year to cover the costs, and this includes the deductibles, coinsurance, and copay.
- Exclusions
Most health insurance companies rarely cover things like cosmetic surgeries, meaning that if you are to go this route then you will be 100% responsible for the costs. Also, the health insurance policies don’t cover, all the medical expenses and they will, therefore, be categorized by the medical conditions, the medical provider, or the type of treatment.
- Pre-authorization
The fact that you have purchased a medical insurance policy, does not necessarily give you direct access to any medical procedure or special visit without preauthorization from your insurer. In essence, therefore, is that the insurance provider requires pre-authorization before covering the visits to the specialist.
Important to note is that pre-authorization is not a guarantee that the service will be catered to by the insurance provider, instead, it indicates that the policy provider intends to cover it pending the review of the claim and a determination of whether the service was important.
Conclusion
Most health insurance service providers limit their liability by providing their clients with the maximum amount that they are willing to pay when it comes to medical costs. So ensure that you are comfortable with the amount offered and find out if it is paid on an annual or lifetime basis, as some pay both.