Health Insurance Frequently Asked Questions FAQ

• Q: What exactly is Insurance?
  
  A: Insurance is a contract that allows parties to share risk. Basically, a person pays their Premiums in exchange for the Insurance Company's commitment to pay a predetermined amount of money for any or all problems (Claims).
  
  
• Q: What is a Deductible?
  
  A: It is a predetermined amount of money that a person commits to pay before the Insurance Company is responsible for any benefit payments. This is done so that people will make sure that any problem that an insured might have really needs medical assistance. It is a way for Insurance Companies to keep premium costs down.
  
  
• Q: What is Coinsurance?
  
  A: Coinsurance is the portion of medical costs that are shared by both the Insured (the patient) and the Insurer. For example, if you have an 80% to $5,000 coinsurance;
  
        ~ The Insurer is responsible for 80% of the next $5,000 in covered medical expenses.
  
        ~ The Insured is responsible for 20% of that same $5,000 in covered medical expenses.
  
  * In the above mentioned policy with $1,000 deductible and 80% coinsurance to $5,000: If a covered event occurred that had a total cost of $10,000, the insured would be responsible for the first $1,000 (deductible). Of the next $5,000 in covered expenses, the insured would pay another $1,000 (coinsurance). After deductibles and coinsurance are satisfied, Insurance Companies pay 100% of all other covered expenses. For this example the Insured would pay $2,000 and the Insurer would pay $8,000.
  
  
• Q: What is a "Doctor's Office Visit Copay"?
  
  A: Generally, this is an amount of money that an insured patient would pay to their doctor for that particular visit. In most cases, any costs incurred in that visit are covered 100% after the copay. Often, any lab tests (MRIs, Blood work ups, etc.) are not included in that visit cost and are subject to Deductibles and Coinsurance.
  
  
• Q: Do I have to pay my deductible before "Office Visits" are covered by copays?
  
  A: The simple answer is no. However, there may be companies that do have that clause in their contracts. It wouldn't be against the law to have that clause, but we rarely see this situation.
  
  
• Q: Are copayments credited against my annual deductible requirements?
  
  A: No, for the most part, insurance policies with "Office Visit Copays" handle office visits and hospital stays differently. Hospital stays are generally covered under the "Major Medical" portion of the policy and tend to be subject to deductibles and coinsurance.
  
  
• Q: What is the difference between "Group" and "Individual" coverage?
  
  A: A simple explanation is that group policies can include two families or more and require an employer to pay a minimum of 50% or the single person premium to qualify. Individual policies cover only one family or individual.
  
  
• Q: Can I be charged more for a policy than a nonsmoker would because I smoke?
  
  A: No. Insurance companies can only choose to accept or reject your application based on smoking or any physical impairment.
  
  
• Q: Can I be singled out for cancellation of a policy because of health problems?
  
  A: No. You can, however, use up your benefits by having covered expenses in excess of your lifetime maximums.
  
  
• Q: Does it cost me more to deal with an agent than it would if I dealt directly with an Insurance Company?
  
  A: No. In dealing with an agent, you are dealing with the Insurance Company. Agents are appointed (approved) by insurance companies and are required to fairly and accurately represent them. There are no extra fees to be paid to us for our services. The benefit of dealing with an agent who represents several companies is that you get an even analysis of each company's products and options.
  
  
• Q: What is Group Insurance?
  
  A: Generally, Group Insurance is defined as a policy that an employer makes application for with an Insurance Company. The employer is generally required to pay some portion of the employees' premium and the employee must work some minimum number of hours per week. The employer can pay a greater portion of the premium, but is not required to do so. In some states, Group Insurance is "Guaranteed Issue". which means that the Insurance Company cannot turn down any applicant.
  

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