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How American Health Insurance Works

How American Health Insurance Works

Health care in the United States can be very expensive. A single visit to the doctor can cost several hundred dollars and an average of three days of hospitalization can take tens of thousands of dollars (or more) depending on the type of care provided. Most of us cannot afford such large sums if we get sick, especially since we don't know when we can get sick or have a quorum or how much care we might need. Health insurance provides a way to reduce these costs to more reasonable amounts.

The normal way it works is that the consumer (you) pays a premium by the health insurance company and that this payment allows them to share "risks" with many other (registered) people who make similar payments. Since most people are healthy most of the time, the dollars paid to the insurance company can be used to cover the expenses of a relatively (relatively) small number of people who become ill or injured. Insurance companies, as you can imagine, have studied the risks extensively and their goal is to charge a premium sufficient to cover the associate's medical costs. There are many, many different types of health insurance plans in the United States and many different rules and arrangements related to care.

Here are three important questions to ask when deciding which health insurance will work best for you:

Key question 1: Where can I get care?

One way that health insurance plans control their costs is by influencing access to service providers. Providers include doctors, hospitals, laboratories, pharmacies, and other entities. Many insurance companies contract a specific network of service providers who have agreed to provide affiliate planning services at more favorable rates.

If the service provider is not in the plan's network, the insurance company may not pay for the services provided or may pay less than what you pay for in-network care. This means that the member leaving the network for care may be asked to pay a much higher share of the cost. This is an important concept to understand, especially if you are not originally from the local Stanford area.

If you have a plan through a parent, for example, and that plan's network is in your hometown, you may not be able to get the care you need in the Stanford area, or you may incur much higher costs for get this attention.

Lead question No. 2: What does the plan cover?

One of the things that health care reform has done in the United States (under the Affordable Care Act) is to introduce more uniformity in insurance plan benefits. Before this consolidation, the benefits offered varied greatly from plan to plan. For example, some plans covered recipes, others did not. Now plans in the United States must provide a number of "essential health benefits" including

  • Emergency services
  • Hospital treatment
  • Lab tests
  • Maternity and newborn care
  • Mental health and drug treatment.
  • Outpatient care (doctors and other services you get outside the hospital)
  • Pediatric services, including dental and vision care.
  • Prescribed medication
  • Preventive services (such as some vaccines) and chronic disease management.
  • Rehabilitation services

For our international students who may be considering coverage through a non-US plan, it is very important to ask the question "What does the plan cover"?

Key question # 3: How much will it cost?

Understanding the costs of insurance coverage is very complicated. In our general presentation, we talked about paying a premium to enroll in a plan. This is an upfront cost that is transparent to you (that is, you know how much you pay).

Unfortunately, for most plans, this is not the only cost associated with the care you receive. There is also usually a cost to access care. This cost is calculated as a discount and / or currency and / or property rights insurance (see definitions below) and represents the contribution you pay out of pocket when you receive care. As a general rule, the more you pay up front, the less you will pay when you get care. The less you pay in installments, the more you will pay when you get care.

The question for our students is to pay (greater participation) now or to pay (greater participation) later?

Either way, you will pay for the care you receive. We have taken the approach that it is better to pay a larger portion of the initial premium to reduce, as much as possible, the costs incurred at the time of service. The reason we think is that we don't want any barrier to attention, like high-service Kubai, to discourage students from receiving attention. We want students to receive medical attention when necessary.

Important insurance terms and concepts:

  • Cash: The term "pocket money" and / or "cost sharing" refers to a part of your medical expenses that you are responsible for paying when you actually receive medical care. The monthly fee you pay for care is independent of these costs.
  • Annual deductible - The annual deductible amount is the amount you pay for each plan year before the insurance company begins to pay its share of the costs. If the deductible is $ 2,000, you will be responsible for paying the first $ 2,000 of medical care you receive each year, after which the insurance company will begin to pay its share.
  • Copayment (or "Copayment"): The copayment is a fixed advance amount that you pay each time you receive a sponsorship when that sponsorship is subject to a copayment. For example, a $ 30 copayment may apply to the doctor's visit, after which the insurance company chooses the rest. Plans with higher premiums generally have lower premiums and vice versa. Plans without shared methods generally use other cost-sharing methods.
  • Currency Insurance: Currency insurance is a percentage of the cost of your health care. For a $ 1,000 MRI, you can pay 20 percent ($ 200). Your insurance company will pay the other 80 percent ($ 800). High premium plans generally have less cash insurance.
  • Annual maximum pocket: The maximum annual pocket is the largest cost share for which you will be responsible in a year. It is the total deductible, earnings, and cash insurance (but does not include your fees). Once you reach that limit, the insurance company will receive 100 percent of its costs covered by the rest of the plan. Most associates do not reach the limits of the breast, but it can happen if expensive treatment is needed for an accident or serious illness. In general, high premium plans have lower pocket limits.

What does it mean to be a "covered benefit"?

The terms "covered benefit" and "covered" are used regularly in the insurance industry, but can be confusing. "Covered benefits" generally refer to a listed (ie "covered") health service under the specific health premium paid or recorded by the registered patient. The term "covered" means that a portion of the allowed cost of health services will be paid by the insurance company. This does not mean that the service will be paid 100%.

For example, in a plan under which urgent care is covered, a copayment may apply. copay patient expenses. If the Copayment value is $ 100, the patient must pay this amount (usually at the time of service) and then the insurance plan "covers" the rest of the allowed cost of the urgent care service.

In some cases, the insurance company may pay nothing for "covered benefits". For example, if the patient has not yet reached a $ 1,000 annual discount, and the cost of the covered health service is $ 400, the patient will have to pay $ 400 (often at the time of service). What makes this service "covered" is that the cost is calculated for the annual deduction, so there is only $ 600 left for the patient to pay for future services before the insurance company begins to pay its share.