MEDICAL INSURANCE

KOCKIE ASKS…

Hi FFI, my sister recently had a severe tooth ache and had to rush to the hospital. She had to undergo several procedures that cost her lots of money, over Ksh 45,000 some of which we had to borrow as it was an emergency. It got us to thinking of taking up a medical insurance cover incase such an emergency occurred. How can we do this? Are medicines also covered in such insurance policies? How does medical insurance work? How do insurance companies determine how much I should pay?

SOLUTION

Health insurance insures against risk of incurring medical expenses among individuals. This is done by estimating overall risk of health care expenses amongst a targeted group. Health insurance taken by elderly people may therefore cost more than that taken by an adolescent, this determines how much you should pay, and also different covers have different policies.

Benefits are administered by a central organization such as a government agency, private business or not-for-profit entry.

How does health insurance work?

A contract between the insurance provider (insurance company or government) and individual or sponsors (employer or community program) is drafted. Type and amount of health care costs covered in the health insurance provider is specified in writing in the contract. Again, it differs from one insurance company to another, although difference might not be big.

A premium amount is normally paid periodically depending on the type of medical cover. Not all services are covered, they are called exclusions. There are also amounts the insured pays out – of – pocket before the health insurance provider pays its share, that is, before coverage. A co-payment is paid by the insured (out-of-pocket) before the health insurance provider pays for a particular visit or service, for instance, $40 co-payment for every visit to the doctor. Prior authorization indicates that the insurer provides prior to medical service occurring, however, small routines don’t count, they do not need authorization. After medical care, explanation benefits, document that indicates what medical services were covered and how payment amount and patient responsibility amount were determined is issued.

There are renewable medical cover contracts; annual or monthly, others are lifelong incase of private insurance, while others are mandatory for all citizens in cases of national plans. It would be extremely difficult to get health care in such a situation if you do have a medical cover.

Other factors determining health insurance costs are:

-Increased utilization due to increasing demand for health care especially due to lifestyle related issues like insufficient exercise, poor eating habits, over indulgence of alcohol and smoking leading to the need for health care have caused increase in health costs.

-Advances in medical technology and medicine such as new treatments, more intensive diagnostic testing has also seen the rise in costs of medical services especially in developed nation.

Shop around in health insurance companies, research in your nation on who offers what and at how much, policy terms involved and settle for the best medical cover. Some do include medication while others do not, although it is very rare that they do. If you are employed, check if your company offers health insurance to employees so that very time you visit your doctor, you utilize that service. Otherwise, get a medical cover that covers you and possibly your family as well. Remember to prioritize your needs.

All the best.