Now that you can decipher many of the codes you will come across in insurance policies, you’re ready to shop around among the different types of insurance. First, a rundown on each type:
Hospital insurance. This provides coverage for inpatient and outpatient hospital services. For inpatient services this insurance usually specifies the number of days of hospitalization the policy covers and specifies dollar limits on total benefits payable.

Medical-surgical insurance. This coverage is divided into two portions: The medical portion pays for doctor visits to the hospital and may pay for office visits. Other medical services covered include drugs, X rays, anesthesia, and laboratory tests performed outside the hospital. The surgical portion covers the surgeon’s fees, whether the surgery was performed in the hospital, the doctor’s office, or an ambulatory surgical center. (An ambulatory surgical center is a medical facility where surgical procedures are performed on an outpatient basis. It may be a freestanding center or a facility associated with a hospital but separate from it.)

Major medical insurance. Often referred to as catastrophic insurance, this coverage protects against the high cost of medical care associated with a serious illness or accident. Before benefits are paid, this type of insurance usually requires you to pay a yearly deductible, typically ranging from $100 to $500, although deductibles vary from one policy to another. After the deductible is met, major medical insurance pays up to a certain percentage of covered expenses while you pay the remaining percentage. A typical coinsurance arrangement is 80 percent paid by your insurance company and 20 percent by you.

Once your out-of-pocket expenses reach a certain amount, many major medical policies protect you from further outlays of cash. This is known as a stop-loss provision. Your insurance company pays the remaining covered expenses up to the maximum limit. Because of such a provision, and the protection major medical insurance offers, if you can afford only one type of health insurance, you should consider purchasing a major medical policy.
It is important to remember that major medical insurance is usually cheaper than hospital or medical-surgical insurance because of the sometimes large deductibles these policies carry.

Tags: health insurance, Major medical insurance, Medical-surgical insurance, types of health insurance

Posted on Wednesday, August 20th, 2008 at 4:45 am filed under Health, Insurance.