If you are about to turn 26 years old, it is time for you to learn about health insurance. 26 is the age at which adult children are kicked off of their parent's insurance. This is not because your parents are wanting you to spread your wings, but because it is mandated by law. Health insurance can be tricky to figure out since it has its vocabulary, deadlines, and benefits. To help you make a more educated decision as to which type of insurance you should choose, here are a few of the basic definitions and explanations.
A health insurance premium is a cost you will pay every month, regardless of whether or not you use it. This monthly payment reserves the right for you to use your health insurance. If you do not pay your premium you lose that right and your insurance will not cover you.
A deductible is an amount that you have to pay before your insurance will start to pay a percentage. For example, let's say that you have a $500 deductible, but just a $30 copayment. You go to the doctor and expect to pay just the $30, but later you get a bill for $150 to pay for the visit. Do you have to pay? Yes, because that $150 is going towards the deductible that you are required to pay. Once you reach the full $500 you will no longer receive bills for the full office visit.
The deductible, copayment, and coinsurance you pay add up over time. Once you have hit a certain amount, say $3,000 for a single person, you will not have to pay them anymore and your insurance will pay for 100% of your healthcare needs. This is called your out-of-pocket maximum. Not many people hit their maximum every year.
A copay is usually a small amount that you are required to pay when you get medical services. As the name states, you are paying in cooperation with your health insurance. Check with your health insurance provider for a complete list of what medical services will cost in a copayment.
In conclusion, insurance is not something to be afraid of. You may be worried about how to pay for it, but everyone in the world has the same fear. Many government agencies work to make healthcare affordable to those who need it most. Talk to your local Department of Human Services for more information.Share