Insurance can be hard to shop for, so learn about your options with these valuable guides.

Guides


Major medical insurance coverage is the most popular form of coverage available to individuals and families. The problem is that many people may not understand what major medical insurance coverage is, how it works or how much it can cost. There are issues and misconceptions with what major medical insurance covers including various hospital exams, co-pays and other information. This guide is specifically for individuals who are new to insurance coverage and especially new to major medical insurance coverage.

There are several aspects of major medical insurance this guide will cover. Among these aspects are what major medical insurance coverage covers, the cost of major medical insurance, how to find and narrow down an insurance provider and how to avoid complications with the major medical insurance coverage later down the road. Before we get started on these various aspects major medical insurance coverage there are a few facts that everyone should know regarding major medical and how it works.

 

Facts about Major Medical Insurance Coverage

 

There are several basic facts about major medical insurance coverage. These facts do not change regardless of the type of major medical insurance you choose or the company that you choose to go through for your major medical insurance. The following are a few basic facts that will help you with the initial process of finding, obtaining and starting your major medical insurance policy.


Premiums

The first fact that major medical insurance coverage is the premium. Every major medical insurance program will have a premium. For those individuals not sure of what the premium is or how a premium works here are a few basics. A premium is the monthly payment that a policyholder will pay to an insurance company for their chosen major medical insurance policy plan. This premium can range from $120 a month to as much as $800 a month depending on the type of policy. The type of policy can range from a single policy to a family policy. The number of people on the policy will greatly influence the premium amount for each month. The premium is not applied to the deductible or to any part of the insurance coverage. In fact, the premium is considered to be a payment for having the insurance itself. This is one of the major issues that faces the healthcare reform act as it is an extreme issue for those individuals who may not be able to afford insurance.


Co-Pay

A co-pay is also a fact regarding major medical insurance coverage. A co-pay may be applied to a doctor’s visit, series of doctor visits, prescriptions, both or one or the other. For those individuals who do not understand how co-pays work or maybe confused regarding a co-pay here are a few of the basics. A co-pay is an amount that is paid by the policy holder at the time of services being rendered. For example, if the major medical insurance coverage policy covers co-pays for doctor’s appointments then a co-pay amount, ranging from $15-$45 will be paid at the time of the doctors appointment. This is in lieu of paying a larger amount or the full amount of the doctor’s visit which can go into the hundreds of dollars depending on the physician. A co-pay may also apply to prescription drug coverage. For example, a policyholder may be prescribed a heart medication on a monthly basis. This heart medication may cost as much as $200 for a month supply. However, under major medical insurance coverage that provides a co-pay for prescription plans the cost of the prescription can be decreased significantly to as little as five dollars or upwards of $25 depending on the particular form of prescription.


Deductible

A deductible is another fact of life when it comes to major medical insurance coverage. A deductible is the amount that a policyholder will pay before certain services become available under the policy. For example, under some major medical insurance policies a deductible will need to be paid before prescription drug coverage and the co-pay related to prescription drug coverage kicks in. This means that an individual may pay as little as $100 or as much as $500 before any prescription drug coverage is initiated. The most common forms of deductible under major medical insurance are with hospital stays, inpatients and outpatient surgeries. A deductible may be as little as $500 for the services or as much as $3000. After the deductible is paid, which is usually pay out-of-pocket, the policy will kick in and cover the remaining qualifying factors that are allowed on the major medical insurance policy.

It should be noted, that the deductible, co-pay and the premiums are the three major issues that individuals have when it comes to having an insurance policy especially purchasing a major medical insurance policy. For example, a family of four may be viewing as much as an $800 month premium in some states simply to have the coverage. If the coverage requires a deductible for doctors visits before a co-pay can kick and then that family will also need to pay out not only the $800 for that monthly premium but also an additional amount to meet the deductible. After the deductible is met the family may still be have to pay for co-pay.

The co-pay will be for each individual in the family that sees the doctor. An extreme example of this, but unfortunately a common example, is when a large family has several children. If each child in the family were to contract the flu and need to visit a pediatrician in order to return to school, then the family would not only have to pay the high premium a month for the insurance coverage itself but also pay the co-pay for each child. This means a doctor’s appointment for four children could cost as much as $200 on top of the high cost of the premium. This is one of the issues that is facing the United States government in their health care Reform Act.

 

Major Medical Insurance and What it Covers

 

There is some misconception as to what major medical insurance covers. This misconception is major medical insurance covers all aspects of medical coverage including doctor’s appointments, lab work, hospital stays, prescription and maternity care. The truth of the matter is, that major medical insurance may or may not cover all or some of these items depending on the insurance policy itself and the insurance provider. The following are a few of the items that are covered under major medical insurance.


Doctors Appointments

Doctors’ appointments are generally covered under major medical insurance. However, with certain policies there may be several stipulations regarding what doctors appointments are covered, how much of the doctors appointment is covered and if the deductible should be applied before co-pay can be given. The most general practitioner and family medicine doctor plans are covered, there may be a small deductible required for co-pay kicks in. The most common doctors that are either not covered or are only covered after referrals and deductibles are met are specialty physicians, physicians that require a referral such as a psychiatrist or psychologist and maternity doctors.

There is a huge misconception that major medical insurance will automatically cover maternity. This is untrue. Depending on the policy itself and in the insurance provider, maternity may or may not be covered until the third or fifth year of insurance coverage. There are some insurance companies that will allow maternity to be covered after one year of continuous coverage, however most do not allow maternity coverage for at least three years. Some insurance companies will view maternity as a pre-existing condition while others will simply not cover maternity with out either a stipulation or a supplemental policy. In these cases, many families will choose to either have an alternative birthing option such as homebirth or birthrate midwife. Other families may choose to go with a government programs such as Medicaid in order to cover the maternity and any related issues following the maternity and birth of the child.


Lab Work and X-Rays

Lab work, x-rays and lab tests are covered under some policies and not others. The common misconception that lab work, testing x-rays are always covered under major medical. This is not true. Some major medical coverage is will cover lab work if it is done by the general physician or ordered by the general physician. X-rays may also fall into the same category as lab work. However, certain procedures such as CAT scans, MRIs and other major tasks may require the insurance company to approve the testing prior to be testing being done or may not cover the testing at all. These may also be covered under the policy after a certain deductible is met. This is why it is vastly important for an individual to read the policy and sure what the specific rulings and guidelines are for lab work, testing and x-rays.


Specialty Procedures and Long-Term Care

The vast majority of major medical plans will have some stipulation for specialty procedures and long-term care. These specialty procedures can be anything ranging from bone marrow transplants to gallbladder surgery. The long-term care issues can be directly connected to cancer or another long-term care issue. Though major medical will tend to cover certain aspects of these procedures, most of them will need to be covered under a supplemental plan. For this reason, many policy holders will purchase a supplemental or gap insurance plans to cover specialty procedures and long-term care. Long-term care insurance is the most common form of supplemental plan for the specialty procedures. It should be noted that any kind of supplemental plan or gap insurance is not considered part of the major medical policy and there may be certain guidelines are stipulations that will prevent an individual from gaining the full access to either the gap insurance or to the major medical policy that they have obtained in regards to special procedures and long-term care.

If at any time an individual is concerned as to whether or not their policy will cover certain health appointments, doctors visits, prescriptions, specialty procedures or long-term care they should seek the guidance of their insurance provider. Insurance agent for the particular insurance policy provider will be able to help an individual determine what kind of major medical insurance policy best fits their needs, what kind of supplement policies that their needs and how to best plan for any type of long-term care insurance as it pertains to their major medical plan.

 

The Full Cost of Major Medical Insurance

 

When an individual chooses to purchase a major medical insurance policy they may or may not be fully prepared for the full cost of major medical insurance. Though there are several aspects of major medical insurance coverage and payment options depending on the type of policy one receives, there will still be a full amount of cost that needs to be considered. In order to budget properly for the full major medical insurance costs than any procedures that may arise connected to the major medical plan, here are the basics that need to be considered. These basics are the basic money amount that individuals should put into a budget or savings plan in order to cover all of their medical needs.


Premiums

Premiums are the first thing that an individual must budget. They are the most common expense that is budgeted when it comes to major medical insurance. That is due to the fact that premiums are in the hard-line amount of money the individual or family will need to spend on insurance each month. The basic concept of a premium is to ensure that the individual or family maintains their major medical policy coverage. However, many individuals will go with the cheapest method available which will increase their other costs. When you are looking at a major medical insurance coverage plan at the best option is to choose the policy that covers as much as possible for the least amount as possible. This will give you a good balance for any type of expense that may come later including co-pays, deductibles and other expenses that will be talked about in a few moments.


Deductibles

Even the deductibles or something that is chosen immediately when a major medical policy is instigated, many families and individuals will forget about the deductible altogether. They will tend to go ahead and make doctors one of the other appointments only to realize at the pharmacy or during a referral session or another doctor’s appointment the deductible is required. One of the best methods is to remember how much of the deductible you have for various appointments. For example, if you have a deductible for a standard physician appointment and that is $300 prior to any co-pay or other policy kicking and then the best thing to do is budget $300 to set aside. This $300, or related deductible price, will cover the deductible that you have in case of emergency.

For example, if you do not go to a doctor that often, but have chosen a $300 deductible then the best method is to set aside $300 in savings for when you do go to the doctor you will have the deductibles pay out-of-pocket and you will not have to worry about coming up with the money at the last minute. This should also be budgeted for prescription drug plans or for any other option that you have a deductible for including hospital stays. If you do not have the amount of money set aside you will have to pay the money out-of-pocket before your insurance policy will completely kick in. There are several options to help with paying for deductibles which will be discussed later in this guide.


Co-Pay

Co-pays are the amount that most individuals forget about when it comes to their major medical coverage. For example, if a family member is sick and the deductible has already been met not only will family have to pay for the monthly premium that they will also have to pay for the co-pay at the doctors office. This could mean that a monthly fee for a medical policy and visit is as much as $500 for that month. All of these factors need to be considered when budgeting properly for the full cost of major medical insurance coverage.

 

Ways to Pay for Major Medical Coverage and Unforeseen Costs

 

The biggest worry for many families and policy holders is how to pay for major medical coverage as well as unforeseen costs, deductibles and co-pays. There are several methods available for individuals and families to use in order to make sure that not only can they pay their premiums but they can also meet their deductibles and can meet their costs for unforeseen medical conditions that may require long-term care. These methods will allow individuals to not only cover their monthly premium costs but also cover issues such as cancer or unforeseen costs that may arise. The following are a few of the ways people can use to pay for major medical coverage.


Simple Budgeting

Simple budgeting is the first way that many people do use in order to pay for major medical coverage and pursuing cost. Once an individual knows how much their premiums will be for their major medical coverage they will also find out the amount they have to pay for deductibles for certain services and the amount they have to pay for co-pay. Knowing these amounts makes it incredibly easier to budget properly for individual portions of the policy or for the policy itself.

A family can then budget out the amount of money they will need to pay the deductible if there is a hospital procedure, service or if there are prescription drug costs. This simple budgeting method to be worked into the monthly budget and can be easily set aside into a savings account for future use. The benefit of a simple budgeting plan in order to cover major medical coverage cost and foreseeing costs, is the ability to take that amount and put it toward each following year if it is not used during the previous year. In other words, if you have saved up the money for your deductible, co-pays and unforeseen costs and that money is not used during the first year you will not be the favorite for the following year and be able to apply it to whatever year is necessary.


Health Savings Account

A health savings account is becoming an increasingly popular way for families and individuals to save for major medical coverage and unforeseen costs related to that coverage. A health savings account is much the same a simple budgeting except that a certain amount of your employee paycheck can be put towards a health savings account. There are certain tax benefits that go with a health savings account as well. The major benefit that individuals enjoy of having a health savings account is the ability to have an amount of money automatically deposited into the account and if the account is not utilized for major medical coverage during that year it will roll over and continue to accumulate. This is a huge advantage for individuals concerned about long-term care issues such as cancer or other related issues. This will mean that each year they are creating a larger amount of savings in the health savings account.

It should also be noted that health savings accounts can also be cashed out after a certain amount of time. A health savings account runs through a bank in conjunction with an insurance policy provider. This option can be discussed with your local bank, employer or with your insurance provider to determine if you are eligible and how to open your health savings account. A health savings account can also be used for independent contractors and freelancers if handled properly. For more information on health savings accounts, major medical insurance coverage or other insurance plans please see your local insurance provider and schedule an appointment.