Understanding the Basics of Health Insurance

1. Understanding the Basics of Health Insurance

Health insurance is essential for managing medical expenses. It typically covers hospital stays, doctor visits, and prescription medications. Health insurance plans come in various forms, such as HMO (Health Maintenance Organization) and PPO (Preferred Provider Organization). An HMO requires members to select a primary care physician and get referrals for specialists, often resulting in lower costs. In contrast, PPOs offer more flexibility in choosing healthcare providers and do not require referrals, but they usually come with higher premiums.

Key Terms:

• Deductible: The amount you pay out-of-pocket before insurance starts covering costs.
• Copayment: A fixed amount you pay for a covered healthcare service.
• Coinsurance: The percentage of costs you share with your insurer after meeting your deductible.

Choosing the right health insurance plan depends on your healthcare needs and financial situation. Compare different plans, check their coverage details, and evaluate the costs versus benefits to find the best fit for you.