If you are one of the many self-employed or work for an employer that does not offer any insurance benefits, you will need to purchase a health and dental insurance policy on your own or with the help of an insurance agent. To some it may seem overwhelming, but it only takes a little research to better understand how insurance plans are organized.
When reading a health insurance policy, you will come across some insurance specific conditions. These terms tell you what you are responsible for paying and what the insurance company will pay.
Copay – This is a cost-sharing arrangement where the insured pays a predetermined amount and the insurance company pays the rest. Example: You have a co-payment of $ 50 for a visit to the doctor which costs $ 80. You pay the $ 50 and the insurance pays $ 30.
Deductible – This is the amount that the insured is responsible for paying before the insurance begins to pay. The higher the deductibles, the lower the monthly cost.
Coinsurance – This is another cost sharing deal, 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%, or $ 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. Wait times vary, but you may experience wait times ranging from 1 to 12 months for services that will later be covered.
Dental insurance companies offer many plans but most fall under the category of a savings plan, a network plan, or a fixed benefit plan. Each plan will cover preventive, basic and major services. Consumers need to know what all of this means because the three basic types of plans are very different.
The dental savings plan is inexpensive and only offers network discounts. Most advertise rebate ranges of 20% to 65% depending on the provider you choose. Some people think these plans are worthless and don't offer a lot of benefits, but they're great for people who just need cleanings, a few basic services, and no services. major. The other thing to consider is that the network and the fixed benefit plan have a maximum benefit amount per year. This plan cannot be used to complete a network plan.
A network plan has copay and franchises. It offers more coverage with a focus on preventative services and happens to be the more expensive option. This plan will typically pay for 100% of your preventative services and percentages of your basic and major services. Some will have a waiting period for these services and some will not cover major services at all. You need to determine if you are likely to need major services or if you can supplement the plan with a savings plan.
The fixed benefit plan pays predetermined cash for covered services. If your family can't afford a network plan, this is your best option. This has no excess but you have to pay the difference between the fixed service and the dental bill. The best thing is that there are no networks so you can choose any dentist you want. You can also become a better consumer, because you can ask the dentist what their prices are to maximize your fixed benefit. This plan can also be supplemented with the dental savings plan, as the money is sent to you, not the dentist.
Understanding the specific terms of insurance can become intimidating when looking at a contract that is over 30 pages. Consumers need to do their research but I recommend that they speak to a professional. I am a licensed insurance agent who has been trained and understands the specifics of contracts. They are better prepared to explain the nuances that you might skip.