The Importance of Health Insurance

The Importance of Health Insurance


A medical insurance plan covers part or all medical and surgical expenses of the insured individual so that they can get the care they need without placing any financial strain on loved ones. In exchange, the policyholder pays a premium in the form of regular instalments. The practice is said to have been inspired by medieval guilds and ancient Greeks who established benevolent societies to care for families of breadwinners when they became too sick to earn a living. Apart from medical expenses and disability, most plans also cover accidents, dismemberments, telemedicine, and death.

Medical insurance plans are vital. People fall ill unexpectedly. At times they are not financially prepared for the treatment costs even after factoring in their savings and income. This is where health insurance comes in handy as they can access cashless treatment from any providers enlisted by their health insurance company. Considering how expensive medical care is becoming by the day, some medications could render one bankrupt. Medical insurance can help avoid this. People who cannot afford treatment usually go without it, which in most cases, leads to complications and death. Investing in a health plan could help prevent this.

How Medical Insurance Works

Some covers directly pay for all medical costs incurred, including ambulance or transportation, treatment, medication, hospitalization, and post-hospitalization expenses up to a predetermined duration of time. Others chip in a percentage of the bill, and you have to pay the remaining out of pocket. Others still ask you to pay and then reimburse you.

Types Of Health Insurance

There are several types of health insurance plans. First up is Health Maintenance Organizations. With HMO, you can access health care courtesy of a given local network of providers. You have to choose a primary care physician ( PCP), and the insurance company will only pay for expenses and specialists referred by this PCP. Second is the Preferred Provider Organization, which gives a policyholder the freedom to choose a doctor they prefer for treatment provided they are among the insurer’s approved providers list. PPO will cover expenses if you decide to go for a doctor or hospital that is not in their network, but your out of pocket cost will increase significantly.

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Thirdly is the Point of Service Plan, which features both HMO and PPO benefits. Last but not least, is the Exclusive Provider Organization plan that only covers in-network health care unless it was an emergency, and you had to use an out of network provider. Policyholders can decide to choose a PCP or not and can go to specialists without a referral from the primary care provider.

Public health insurance is another category of health insurance plans, whereby the government subsidizes healthcare expenses if one pays a specified premium.

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If you are buying health insurance cover as a preventative measure, consider plans with lower premiums and higher deductibles. If you are sickly, opt for policies with lower deductibles and higher premiums as these will offer you a more extensive cover. The good thing about health insurance is that on top of giving you a safety net in cases of illnesses or injuries, most companies offer a no claim bonus, so if you do not make any claims or need any treatment, your money doesn’t just go to waste.


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