If you are one of the many freelancers or work for an employer that does not offer any insurance benefits, you will need to purchase a health and dental policy on your own or with the help of an insurance agent. To some, this may seem overwhelming, but it really only takes a little research to better understand how insurance plans are organized.
When reading a health insurance policy, you will find specific insurance terms. These terms tell you what you are responsible for paying and what the insurance company will pay.
Copayment – This is a cost-sharing arrangement in which the insured pays a predetermined amount and the insurance company pays the rest. Example: You have a $ 50 copay for a doctor visit where the cost is $ 80. You pay the $ 50 and the insurance pays $ 30.
Deductible: it is the amount that the insured must pay before the insurance begins to pay. The higher the deductibles, the lower the monthly cost.
Coinsurance – This is another cost-sharing arrangement, but in this one you pay a certain percentage and the insurance company pays another percentage. Example: Your office visit costs $ 80 and you are responsible for 30%, which is $ 24, so the insurer will pay 70%, which in this case is $ 56.
Waiting Period – This is a way for insurance companies to cut costs and avoid paying for pre-existing conditions. Waiting periods vary, but you can find waiting periods of 1 to 12 months for services that will be covered later.
Dental insurance companies offer many plans, but most fall into the category of savings plan, network plan, or fixed benefit plan. Each plan will address preventive, basic and major services. Consumers should be aware of what that means because the three basic types of plans are very different.
The dental savings plan is inexpensive and only offers network discounts. Most advertise discount ranges of 20% to 65% depending on the provider you choose. Some people think these plans are worthless and don’t offer much benefit, but they are perfect for people who only need cleaning, few basic services, and no major services. The other thing to consider is that the network and the fixed benefit plan have a maximum amount of benefits per year. This plan does not, so you could also upgrade a network plan.
A network plan has copays and deductibles. It offers more coverage with an emphasis on preventive services and is the most expensive option. This plan will generally pay 100% of your preventive services and the percentages of your basic and specialist studies. Some will have a waiting period for these services, and some will not cover important services at all. You must determine if you are at risk of needing important services or if you can expand the plan with a savings plan.
The fixed benefit plan pays out-of-pocket cash for covered services. If your family can’t afford a network plan, this is your next best option. This does not have deductibles but you must pay the difference between the fixed benefit and the dental bill. The best thing is that there are no networks so you can choose the dentist you want. You can also become a better consumer because you can ask the dentist what their prices are to maximize your fixed profit. This plan can also be augmented with the dental savings plan because the money is sent to you, not to the dentist.
Understanding the specific terms of insurance can be overwhelming when looking at a contract that can be more than 30 pages long. Consumers should do their research, but I recommend that they speak with a professional. The licensed insurance agent has been trained and understands the details of the contracts. They are better prepared to explain the nuances that you might miss.