Forms of Health Insurance Payments
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The contract between an individual and health insurance company is called a health insurance policy. This contract is renewed annually or monthly, and the details of health care costs and coverage are provided in the policy or Evidence of Coverage booklet. There are several forms of payment for health insurance:
A policy holder may pay a premium, or an amount that needs to be paid each month or annually that purchases the health coverage.
Others prefer to pay a deductible, wherein an individual pays up to a certain amount per year before the health plan starts to pay its share.
Exclusions are indicated in the policy, where uncovered treatments and services will be paid in full by the individual.
Coverage limits are also indicated, where there is a maximum dollar amount for a certain service, such as hospitalization (room payment). If the maximum amount is exceeded, the excess will be paid out-of-pocket by the individual.
Out-of-pocket maximums, on the other hand, is similar to coverage limits, where an individual has a maximum amount of out-of-pocket payment obligation, and the health plan will pay for the amount in excess of the limit. This form of payment is limited to specific services.
Be sure to discuss your options with your health insurance provider, to make sure you choose a payment plan that fits your needs and budget.
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