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Health Insurance is something everyone needs, most people have, but few know anything about.
Everything is in the policy, but most people never read their policy and that's understandable: it's boring, worded in legal terminology and seemingly endless in explanation.
However, health insurance is purchased for security and when the insurance is most needed (as in a serious illness), the contract is all you have. It is best to know what is in the contract before a serious illness occurs; after a serious illness occurs, you are most likely stuck with the insurance you have at the time.
Most policies have a one or two million dollar lifetime limit. While this may seem like a lot of money (and it is!), it is quite possible to run out of one to two million dollars when fighting a serious illness. At that point, it is unlikely that you can obtain other insurance and you can count on the fact that your company is never going to pay more than its stated limit. You need a policy with at least a five million dollar lifetime limit.
Most policies pay what is "reasonable" and/or "necessary", which often leaves the policyholder responsible for a good percentage of the bill--much more than the 20% (for example)he had counted on paying. For example, if you have a $5000.00 outpatient surgeon's bill and the insurance company decides the reasonable rate is $4000, they will pay their 80% based on their "reasonable" assessment, or $3200.00. There is an $1800.00 balance due from the $5000.00 charge. Guess who ends up with the bill?
Insurance companies should pay usual and customary since that is the American Medical Association's standard and will not leave their clients holding a good portion of the bill.
The most important element of an insurance policy is the "Renewability" clause. Some policies state "At the option of the Company, we can cancel your policy". In other words, if they decide to get rid of you, they can. Period. Some policies state "We will not cancel your policy unless we cancel all policies of the same type,class, etc, etc...in your state". Insurance companies are notorious for leaving the state if they find business is no longer profitable. The letters they send their policyholders often read:
Dear______,
We have decided it is no longer profitable to do business in the state of _______.
You have 30 days from the date of this letter to find other insurance.
Sincerely,
_________
If you or your spouse has had a heart attack, cancer, etc, it is a long way back from the mailbox where you opened this letter. Obviously, finding "other" insurance is not an option. You need an insurance company that promises not to cancel you.
Have you looked at your policy? Most people would honestly say it has never been read, but they know it is "filed somewhere". My advice: Dig it out and at least look at the areas I have mentioned. Then, when you need the coverage you have paid dearly for, you will know what to expect. Or---if you are appalled at what you find, you can switch to a company that gives you the security you really need now, before it is too late.
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