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The Basics of Health Insurance

The most important thing to keep in mind when selecting health insurance is the primary purpose for which you expect to use it. Some people are looking for insurance simply to feel safer, to reduce the financial impact of a hypothetical medical emergency in the future; others have chronic medical conditions, or family members with such conditions, that require periodic doctors' appointments and prescription medication they cannot afford out-of-pocket. The reason you are looking for insurance will affect the form in which you want to obtain it.

Another crucial thing that confuses many first-time insurance buyers is the terminology; there is a lot of terminology specific to insurance that may be very difficult to understand, and it becomes especially overwhelming when so many of these unfamiliar terms refer simply to different reasons to pay money to the health insurance company. The three you will hear most often, however, are "premium," "deductible," and "copay." Your premium is the set amount you pay each month to maintain coverage; a deductible is a set amount paid towards a single major cost, after which the insurance company pays the remainder; a copay is the amount you must still pay out of a repeated cost, such as a prescription or appointment. The words are long and unfamiliar, but the concepts behind them are relatively simple once you have learned what they mean, and they are all important numbers to pay attention to when deciding whether an insurance plan is affordable.

The final, and most important, thing to pay attention to in an insurance plan is, of course, the exclusions. Almost all plans list certain types of care they will absolutely not pay for, and it is crucial to make sure that you are buying a plan that will in fact cover any expenses you anticipate needing it to cover.

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