Cash Course: Understanding Health Insurance

health insurance is a very important part of our Lives both medically and financially but did you know that health insurance in the United States started in the mid 1800s and covered only Railroad and Steamboat accidents no I had no idea today health insurance options cover everything from basic medical needs like yearly checkups and the occasional visit to the doctor for your average aches and pains all the way to complex medical issues like surgeries long-term disease treatments and child birth that's great but why would I need health insurance well have you thought about what would happen if you got really hurt or sick I'm healthy and exercise regularly I'll be fine H I sure hope you have some Deep Pockets and why is that okay so maybe you do need to tell me about help health insurance health insurance is designed to protect you from the cost of the medical services you need when you're sick or injured you choose a plan and agree to pay a fixed amount or premium each month the insurer then pays a portion of your covered health care costs these payments are typically based on discounts that Health insurers negotiate with doctors or Hospitals now if you don't have health insurance the medical bill for your injury could cost you hundreds thousands or even tens of thousands of dollar depending on the severity $3,000 I told you it could get pricey let's imagine that you do have health insurance you'd pay a premium of say $100 a month and each time you receive medical care or fill a prescription you are charged a co-payment this co-pay is part of the actual cost that you are responsible for and your insurance would cover the rest so instead of paying the entire medical bill you would pay something like $20 to see the doctor $50 for the X-ray and $25 for the cast and crutches these are also known as outof pocket costs now let's say your injury is worse than you thought and you need surgery which may require a hospital stay more doctors more appointments and more co-pays does it ever stop well with insurance you'll meet your deductible at a certain point this is the amount you're responsible for each year before Insurance begins covering most if not all of the bills beyond your basic Services deductible can range from $0 to $7,500 annually for an individual depending on the monthly payments on your plan typically the lower the premiums the higher the deductible and vice versa some Services may require co- inssurance where the insured pays a percentage of the cost for example if you need surgery you may be responsible for 10% while insurance pays the rest the good news is that most plans have an out-of-pocket maximum per year once that maximum is reached any care you receive for covered services will be 100% covered by your insurance so who pays for health insurance it depends sometimes an employer will pay all or a portion of it if you're under the age of 26 you might be under your parents insurance plan with their employer there's also the option for paying for your own private health insurance these tend to cost more than group or family plants lastly there is government subsidized health insurance this is when the government or another organization helps to pay for part of your health insurance now that you know a few things about health insurance here are a few things to consider so you'll be a Savvy decision maker when it is time to get your own plan first do your homework take the time to research different insurance companies and become familiar with their terms and policies then make a chart to compare your options if you have questions talk to an insurance agent these are professionals who should be able to help guide your decision- making second consider yourself your lifestyle choices and family medical history can have a huge impact when considering the costs and benefits of the policies available to you remember insurance is all about risk so make sure to factor your own third consider your budget even if you have a solid health insurance plan have money set aside to cover some of your outof pocket costs also there may be times when it is better idea to negotiate paying the medical provider directly rather than going through insurance if you have money set aside this makes it a lot easier to do nobody plans to get sick or injured but everybody eventually does understanding health insurance before you need it ensures one less surprise at the doctor's office and just like you need to keep an eye on your bank accounts and Investments you must keep an eye on the terms your plan offers and make updates as needed here's to good health and a quick [Music] recovery not again watch more at Prager kids.com and parents don't forget to subscribe