The human body is susceptible to germs, pathogens, allergens, accidents and much more harmful organisms and events, which have adverse effects.
The result is sickness, physical injury, disability or death hence the need to take precautions against these eventualities.
Health medical insurance is a program that aids in payment of medical expenses enabling you to live a manageable life.
The history of health medical insurance
The first form of medical cover can be traced back to 1694 when Hugh the Elder Chamberlen introduced health insurance.
In the case of accident cover, the first accident insurance was availed in the late 19th century, and its features were similar to today’s disability insurance.
Over the time, this traditional disability insurance transformed to the medical health insurance available today.
The main reason these development were initiated was to relief the patients of the burden of financial stress in case of catastrophic illness or accident.
This is the aim up to date, and therefore, a health medical health insurance is a contractual arrangement between the government health program or a third-party payer to reinstate the policyholder all or a portion of the amount used for medical expenses provided by health care professionals.
A policyholder, in this case, is a person who signs a contract with the insurance provider and thus owns the health insurance policy.
Understanding health insurance
Health insurance coverage differ with the type of coverage and thus the insured may either pay costs out of his/her budget and then get reimbursement, or the insurer makes direct payments to the provider.
The term Provider means a hospital, doctor, clinic, laboratory, pharmacy, or health care practitioner.
Two broad classifications of health insurance
Private health insurance: This refers to a cover by a health plan supplied by a union or an employer and coverage acquired or purchased directly by the insured from an insurance company.
Own employment-based health insurance: This is cover financed through one’s own employment and covers only the policyholder.
Employment-based health insurance: This is cover through one’s employment or relative’ and offered through a union or an employer.
Direct-purchase health insurance: This is a cover through a plan offered by a private company or through an exchange and purchased by an individual.
Government health insurance: These are medical insurance cover plans funded by the governments.
However, even though the government supplies it, premiums need to be collected by most governments.
How do insurance determine the premiums to charge?
Anytime an insurance firm offers to give you a medical insurance cover they are assuming your medical risks hence then need to charge reasonable premiums when offering medical insurance plans for individuals.
There are several things considered including:
Age: Younger people are usually charged lower premiums than older people.
The reason behind this rests on the argument that, young people have no diagnosed health conditions and in case available, they are fewer when compared to the old.
However, it is also good to note that, young people have a high probability to get into accidents and get significant injuries.
Pre-existing medical conditions: Many insurance firms may deny cover for people with specific pre-existing health conditions and sometimes offers it at costly premiums.
This is because, people with such conditions are likely to develop other conditions hence increasing the costs.
The number of covered individuals: Medical insurance companies are more likely to charge more for a plan covering several family members than is the case with just one individual.
Tobacco use: Tobacco consumption is harmful, and insurance firms always penalize applicants engaged with chewing tobacco and chewing tobacco and charge them higher insurance premiums, and some may even refuse to cover them.
Family history: Applicants with a specific family condition or ailment may be charged higher premiums than others since the risk involved is higher.
For example, medical insurance quotes for applicants from a family with cancer history may be higher than from families with no such history.
Geographic Location: Where you live influences your health medical insurance premiums you pay.
People from a similar area have similarities in their health conditions and similarities in risk profiles.
Profession/Occupation: People who are likely to be exposed to radiations, injuries, or hazardous chemicals may be charged higher premiums than those working in less dangerous jobs.
However, the insurance firms mostly suffer from adverse selection where there is asymmetric information.
Thus, people or the insured are more likely to make claims reducing the profitability of the insurance firms.
How to choose the right health medical insurance
Is your primary physician under the provider’s network? Before choosing a medical plan or a medical insurance provider, always enquire whether your primary physician is a partner with the provider.
This will facilitate an easy transition regarding payments and treatment plans.
Consider the costs: For young and healthy people, you may decide to trade in the premiums with out-of-pocket payments.
As you consider this, be careful and factor in copays and coinsurance.
Your budget: Different medical insurance companies offer different classes of coverage such as gold, platinum among others.
These classes have different coverage and so is the price. It is, therefore, important to consider the package as per your budget.
Health condition: Always consider your health condition as you look for cover. Some conditions are much costly for you to treat compared to premiums payable.
It will, therefore, be wise to seek medical cover in such cases.
Advantages of health medical insurance
Health insurance helps you to offer essential cover to your health and critical to ensuring a healthy life and accident cover.
In case something unexpected happens or a disease attacks you unexpectedly, health cover will shield you from unexpected medical expenses.
Additionally, pediatric services are included and your children are thus covered.
Effectiveness in Healthcare: This is in terms of money and time.
With an insurance cover, treatment commences immediately without further due especially the case with surgical operations.
Sometimes without an insurance cover, the process may be delayed until you pay the required amount.
In some countries such as the USA, new terms are emerging such as managed care that refers to an insurance cover designed to provide care via the simplest means possible at minimum costs.
Before you take a cover, always consult your physician, insurance provider or a private consultant for the best services.