Medical insurance is an important form of health insurance which covers a piece or the entire risk of an individual incurring medical costs. As with all forms of insurance, there is some risk among most people. For this reason, medical insurance companies offer different levels of coverage and deductibles in order to minimize the risk. There are also group medical insurance plans available.
Most medical insurance policies will pay a percentage of a patient’s hospitalization expenses, as well as preventative medical services like cholesterol tests and yearly blood tests. In some cases, the policy will cover some or all of a patient’s in-home health care expenses, prescription drugs, and some dental procedures. If a patient is unable to work, the policy may pay for part or all of their lost wages and may provide for extended unemployment benefits. It may also provide funds to assist in covering childcare expenses for the disabled person.
Unlike some health insurance policies, hospitalization expenses are not usually covered by medical insurance plans. However, there are policies that will cover the costs of extended hospital stays. When purchasing medical insurance, it is important to understand the difference between the different types of coverage. The types of coverage will depend upon your individual health conditions and medical history. Some examples include:
The premiums for these types of plans generally have higher deductibles and co-pays than the deductibles and co-pays in traditional health plans. For instance, a high deductible plan will require a higher premium in order to offset the cost of major medical health insurance. These plans also tend to have less major medical coverage than low deductible health plans. The deductibles and co-pays for major medical health insurance can be paid entirely on your own through regular paycheck income. However, if you experience a major medical illness, you may be held liable for the costs of extended hospitalization expenses.
Critical Illness Plans, such as Personal Health Insurance or CHIP provide coverage for illnesses of severity or chronic nature. Critical Illness Plans do not usually cover preventative medical procedures. A critical illness medical insurance policy covers the costs of critical medical illnesses only. If a patient suffers an extended period of hospitalization and stays in the hospital for more than six months due to critical illness, that patient may be eligible for critical illness coverage. However, this type of coverage does not usually pay for routine doctor visits.
Most major insurance companies offer plans that feature catastrophic coverage. This type of coverage pays the full benefit amount for out-of-pocket medical expenses after the policyholder receives the final amount of the policy. The benefit levels for catastrophic plans vary greatly from one insurance provider to another.
An “insured peril” clause is another type of risk management tool used by insurance companies. An “insured peril” clause is often included in small business insurance policies. This clause gives the insurer protection from catastrophic health system expenses in the event the insured person becomes ill or injured and has to pay for the medical expenses out-of-pocked by the policy’s benefits. In some cases, an “insured peril” clause is included in small business insurance policies, but is not allowed in most other policies.
Individual health insurance plans can also include prescription drug coverage as part of the benefits. Prescription drug plans can offer substantial savings to policyholders who take their prescriptions through a direct drug purchase system. These programs are sometimes called “pay as you go” plans. Most prescription drug plans require a prescription history form and annual screening visit. These plans can also cover costs of certain outpatient surgery.