Understanding Health Insurance Terms
Health insurance is a crucial aspect of managing your well-being and financial security, especially when unexpected medical expenses arise. While the public healthcare system provides substantial coverage, private health insurance offers additional benefits and faster access to treatments. To help you navigate the complexities of health insurance, this guide explains key terms you need to know to make informed decisions about your coverage.
1. Excess
The excess, is the amount you pay out of pocket before your insurance policy starts covering the costs of your medical treatment. For example, if your policy has a $500 excess and your hospital bill is $2,000, you’ll pay the first $500, and the insurer will cover the remaining $1,500. Policies with higher excesses usually have lower premiums.
2. Cover
Cover refers to the extent of protection your health insurance policy provides. This includes the types of medical treatments, services, and procedures your policy will pay for. Coverage can vary widely, so it’s important to understand what is and isn’t included in your policy. For some policies you can add to the base cover to increase your coverage, this can include GP visits, specialist consultations, Dental and Optical cover and more.
3. Pre-existing Condition
A pre-existing condition is any illness, injury, or medical condition you had before taking out your health insurance policy. Insurers may exclude coverage for pre-existing conditions, or they might impose a wait period before these conditions are covered. Disclosing all relevant medical history when applying for health insurance is critical to avoid complications with claims.
4. Policy Exclusions
Exclusions are specific services, treatments, or conditions that your health insurance policy does not cover. Common exclusions include cosmetic surgery, alternative therapies, and experimental treatments. Knowing your policy’s exclusions helps you avoid unexpected costs for services you thought were covered.
5. Maximum Benefit
The maximum benefit is the highest amount your health insurance will pay for a specific service, treatment, or overall coverage within a policy year or for the duration of the policy. Once you reach this limit, you’ll need to cover any additional costs out of pocket. Some policies have annual maximum benefits, while others have lifetime limits.
7. Medical Necessity
Medical necessity refers to treatments or services that are considered essential for your health according to accepted medical standards. Health insurance policies typically cover only those treatments deemed medically necessary. For example, a surgery to repair a broken bone would be medically necessary, while elective cosmetic surgery might not be.
8. Claim
A claim is the formal request you make to your health insurance provider for payment or reimbursement of medical expenses covered under your policy. It’s important to follow your insurer’s procedures for filing a claim, including providing necessary documentation like medical bills and reports.
9. Rehabilitation and Recovery Benefits
These benefits cover costs related to rehabilitation and recovery after a major surgery, such as physical therapy, occupational therapy, or home modifications. Some policies include these benefits as standard, while others offer them as optional add-ons.
Conclusion
Health insurance is a vital part of ensuring you and your family have access to the medical care you need when you need it. By understanding these key terms, you can make informed decisions about your health insurance policy, ensuring that you have the right coverage to protect your health and financial well-being.
Glen Hatcher
Financial Adviser
New Vision Financial Services
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