What you need to know about health insurance - LivewellNebraska.com
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What you need to know about health insurance

What is Health Insurance ?
Health insurance is a contract between you and the insurance company that says that the insurance company will pay a portion of your medical expenses if you get sick or hurt and have to visit a doctor's office or hospital. It is a way in which people put their money together to help pay for medical expenses. Health Insurance may be purchased on a group basis (e.g., by a company to cover its employees) or purchased directly by an individual or family. In each case, the covered groups or individuals/families pay money to help protect themselves from unexpected healthcare expenses. Similar benefits paying for medical expenses may also be provided through social welfare programs such as Medicare and Medicaid funded by the government.

How Does Health Insurance Work ?
By estimating the overall cost of healthcare expenses for a particular group of people, a monthly premium can be developed. Premiums are deposited in a pool, ensuring that money is available to pay for the healthcare benefits of the group as specified in the insurance policy. The benefit is administered by a central organization such as a government agency, private business, or not-for-profit entity.

What is a Health Insurance Policy ?
A health insurance policy is a contract between an insurance company and an individual or his or her sponsor (e.g. an employer). The contract can be renewable annually or monthly. The type and amount of health care costs that will be covered by the health insurance company are specified in advance, in the member contract or "Evidence of Coverage" booklet. The individual insured person's obligations may take several forms.

Common Types of Health Insurance
Low Deductible Plans
Low Deductible plans typically cover most of your essential health care needs and give you the options you want including coverage for inpatient and outpatient hospital services, physician's services, prescription drugs and more.

High Deductible Plans
High Deductible Plans have a lower monthly premium. You can get protection against hospital and doctor expenses, but exclude coverage for certain types of medical care. Typical plans do not include benefits for pregnancy and maternity services or inpatient treatment for mental illness or substance abuse.

High Deductible Plans with HSA
High Deductible Health Plans, used in combination with a health savings account (HSA), are designed to provide you with a lower monthly premium and preventive care benefits. HSAs allow you to save for qualified medical expenses on a tax-advantaged basis.

Temporary Coverage Plans
If you find yourself temporarily needing health care coverage, a temporary coverage plan can bridge the gap – whether it lasts a month, six months or one year.

Consumer Driven Plans
You can combine the benefits of a high deductible health plan with the tax advantages of a health savings account (HSA).

Health Savings Accounts (HSAs)
A health savings account is an alternative to traditional health insurance. Paired with a qualified high deductible health plan, the HSA offers a different way for you to pay for your health care expenses. An HSA enables you to pay for current health care expenses and save for future qualified health care expenses on a tax-free basis. HSAs were created to help give control back to consumers and lower health care costs. You own and control the money in your HSA. Decisions on how to spend the money are made by you. You will also decide what types of investments to make with the money in the account in order to make it grow.
You must be covered by a high deductible health plan (HDHP) to be able to take advantage of an HSA. An HDHP generally costs less than traditional health care insurance, so the money you save on insurance can therefore be put into the HSA.

How you can help reduce health care costs

If we're going to reverse the trend of rising health care and health insurance costs, there are some basic things we can all do:

Choose generic prescription drugs instead of name brands whenever possible. Generics cost 30% to 70% percent less, and they're just as safe and effective.

Save hospital emergency rooms for life-threatening conditions. Visit a doctor's office for minor ailments such as cold or flu, sore throat, fever, or earache.

Stay healthy. Eat right, exercise, and don't smoke. Staying healthy is the best way to reduce medical costs!

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