What Is Health Insurance?
Health insurance protects you from health and financial risks. Most people need medical care at some point in their lifetime. Health insurance covers these costs and other essential benefits.
The Need for Individual Health Insurance.
No one plans to get sick or hurt, but illnesses and injuries can happen at any time. In some cases, they can devastate your health and leave finances. Health insurance protects you from costly illnesses and injuries by covering medical care and other services, such as hospitalization and surgery.
Protection from high medical costs –
Health insurance provides essential financial protection if you have a severe accident or sickness. People are exposed to these costs without health coverage. These costs can sometimes lead people without coverage into debt or even into bankruptcy.
People can underestimate how much medical care can cost:
- Fixing a broken leg can cost up to $7,500
- The average cost of a 3-day hospital stay is around $30,000
- Comprehensive cancer care can cost hundreds of thousands of dollars
Having health coverage can help protect you from high, unexpected costs like these.
How a health insurance plan protects you –
When you have coverage, your plan protects you from high medical expenses in three ways:
- Reduced costs: Once your spending for covered services reaches your plan’s applicable deductible, the plan covers part of your medical expenses.
- Example: If your plan has a $1,000 deductible, you pay the first $1,000 in covered services. After that, your plan pays the designated coinsurance.
- Out-of-pocket maximum: This is the total amount you’ll have to pay no matter how much covered care you get in a plan year.
- Example: If your plan has a $3,000 out-of-pocket maximum, once you pay $3,000 in deductibles, coinsurance, and copayments, the plan pays for any covered care for the rest of the year.
- No yearly or lifetime limits: Health plans can’t put dollar limits on how much they’ll spend each year or your lifetime to cover essential health benefits.