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Health Insurance

One of the biggest threats to personal finance is the cost of healthcare in the US. This is why having insurance is such a big deal. There are options when it comes to buying a policy that fits your needs.

What Is It?

Health insurance is a form of insurance that provides risk management against major health issues that can arise. The cost of healthcare has risen higher than the overall level of inflation in recent years, so having insurance is important.

Who Is It For?

Everyone should have a healthcare policy if they are not covered by a government plan like Medicare or Medicaid. Illness or injury can happen to anyone of any age, and an insurance policy can help you avoid tens or hundreds of thousands in debt from a single event.

How It Works

Healthcare policies usually require policyholders to pay a deductible each year. This is the amount that the insured must pay before the insurance company begins to pick up much of the cost. After a person or family meets the annual deductible and any copays, the insurer will usually pay a percentage of the remaining medical bill. A common percentage is 80 percent. Additionally, insurance companies will generally work out rate agreements with medical providers to cut the cost of the services they provide.

Different Types Of Health Policies

There are government policies like Medicare and Medicaid. These cover a large number of Americans, but there are many people who do not have access to these options. The private insurance market generally has two types of policies. One is the more traditional policy with higher premiums and lower deductibles. More recently, however, individuals have had to pay more toward their healthcare costs. Deductibles have gone up, but people who hold policies with deductibles above $1,000 can save toward medical expenses in a Health Savings Account. The premiums saved can make these a good option, in spite of the higher deductibles.

Major Benefits

The major benefit of having a health insurance policy is the fact that you’ll not have to pay hundreds of thousands should you have a heart attack or get a cancer diagnosis. Additionally, keeping a policy ensures that you will not be left out in the cold should you come up with what is considered a pre-existing condition. Continuous coverage protects you in this case.