Trying to determine health and wellness insurance can sometimes seem like trying to learn a new language—but without the cool language learning apps.
But don’t sweat. If you’re wondering, What is health and wellness insurance?, we’ll break down all those confusing and confusing terms and discuss them in plain English. So you can ensure that you get the protection you need to stay healthy and balanced and keep your financial resources fit.
Health and wellness insurance is a type of insurance coverage that helps with expenses for the often expensive costs of clinical care—hospital visits, surgery, hospitalization in an emergency clinic, routine checkups, prescription medications, to name a few. Sometimes called clinical insurance, the main job of health and wellness insurance is to transfer risk from you to the insurance provider (good one!). By doing this you don’t end up drowning in clinical costs you can’t afford. In fact, the financial risk you take without health and wellness insurance is one of the biggest factors that everyone needs.
While the various health and wellness insurance options out there might advise you on a Saturday night to try to pick the best streaming solution to watch (just not that much fun), there are only 2 main types of health and wellness insurance: private and public.
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Private coverage is what your employer or union offers. It also consists of plans on a government administered marketplace (Health care.gov) during open registration.
Public health and welfare insurance is the kind that Uncle Sam spends on. This consists of Medicare for individuals over 65, Medicaid (for low-income families) or coverage from the Division of Veterans Events.
Since we’ve answered quite a bit about what health and wellness insurance is, let’s see how it works.
In practice, health and wellness insurance can be very tricky (“Delayed, I thought you said this surgical treatment was covered!”). But theoretically, it’s pretty simple.
By paying regular monthly premiums, your health and wellness insurance company will be part of certain health-related services—as long as they are included in your plan. After you pay a certain quantity fee, called an insurance deduction, the insurance company will start to know your clinical costs. Your insurance provider will then cover a portion of the cost. And for points like regular doctor visits, you usually only have to pay a small copay (usually around $20), and your insurance provider will cover the rest—even if you haven’t met your insurance deduction.
Many health and wellness insurance plans also have requirements about which network of doctors or service companies you can use. You can deal with whoever you want, but if that provider isn’t on the right network, you won’t get the full benefits of your insurance provider.
One piece of advice if you want to pay less on your own: Lower your insurance deductions. You will pay a larger monthly premium, but your insurance will start sooner. It also operates in reverse. If you want to pay a lot less each month, choosing a higher deductible plan will lower your premium. It’s like a seesaw, but without the component where you get hurt because your friend jumps.
Individual health and wellness insurance means it’s a strategy you buy yourself—on an individual basis (we’re telling you some of them aren’t that complicated). One of the most common types of individual plans are those available on the market as opposed to plans that you create through corporate or federal government programs.
Team health and wellness insurance plans are assigned to specific individual teams, as offered by companies.
Just as you might buy paper towels, granola bars or gummy births (you did!) at your favorite grocery store, many companies do the same for health and wellness insurance. Buying preparations for the team—in this situation, the employees—saves them money and can sometimes help you save.
But don’t assume your employer’s plan is your best option. Sometimes you can find a cheaper option with the same coverage by looking around a bit.
And if you’re self-employed or unemployed, don’t worry. You still have some great options when it comes to health and wellness insurance.
Health and wellness insurance premiums are the amount you pay monthly (sometimes annually) for coverage. And health and wellness insurance costs sometimes seem like you’re on a Ruby plan instead of Silver. That’s expensive! But what’s really expensive isn’t having insurance and looking at the cost of a $50,000 medical facility.
Again, if you want to pay less each month, choose a strategy with a larger insurance reduction. Just be prepared to pay more for clinical fees before your insurance provider starts helping. That shouldn’t be a problem for you if you follow our Baby Actions and have the emergency money fully cashed out. You can also open a Health and Wellness Savings Account (HSA) if your plan meets certain requirements—it’s a tax-free way to save and spend on clinical costs.
You probably know it by now, but the health and wellness insurance deduction is the amount you have to pay before your insurance provider begins to reimburse you. For example, if your insurance deduction is $5,000, you will definitely pay $5,000 for your own care. After that, your insurance provider will begin to reimburse you.
You may also have heard of something called maximum out-of-pocket costs. This is the maximum amount — the ceiling — that you will spend on maintenance in a given year. So when Murphy attacks, and it looks like the sky is about to fall, there’s at least some kind of restriction. Once you hit that, your insurance provider will take it from there, at least until December 31 of that year.
Coinsurance relates to your maximum out-of-pocket costs and affects your premiums. This is the part of the clinical solution that is your responsibility once you reach your insurance deduction. This is a way to share health care costs with your insurance provider.
On most plans, coinurance is usually a fraction—like 80/20 or 70/30. So if your plan says 80/20, your insurance provider will handle 80% of the costs, and you’ll take care of the other 20%—but right after you hit the insurance deduction for the year.
So you’ve hit your insurance deduction, and you’re ready to make your first claim (hopefully that’s unless it’s something too big).
The first thing to understand is that, oftentimes, you don’t have to mess with the claims either. Your doctor or provider has your insurance information and will usually send the claim directly to your insurance provider.
But if you end up making a claim yourself—like if you had an accident while traveling—here are some tips:
Once you have done this, go ahead and follow the instructions from your insurance company to file a claim. After that, just wait for your insurance provider to allow or deny it. If they reject it, you can continue to appeal.
By now you already know the basics of health and fitness insurance. But there are many more that we haven’t included. And with deductibles, networks, copays, and fees, it can be very tricky to ensure that your health and wellness insurance plan really fits your personal life circumstances.