Health Insurance Versus Health Savings Plans

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Understanding any health insurance policy can be like trying to read a foreign language in the dark

. With all of the unfamiliar terms and insurance jargon, it is no wonder most people don't really understand their medical coverage. Add to this the option of a Health Savings Plan, and you have a migraine cocktail.

If you are one of the few Americans with the option to purchase both health insurance and a health savings plan from your employer, consider yourself incredibly lucky. With millions of citizens uninsured, the sheer choice of the two would be like hitting the lottery for many people.

Health insurance and health savings plans are not mutually exclusive. In other words, you can one or the other, or you can have both. Generally, the best financial choice is to have both, though this of course varies on a case by case basis.

Insurance is designed to help offset any costs in the case of any accidents, illnesses, or surgeries. Most insurance policies require a small co-pay for visits to the doctor or a specialist at the time of the appointment. The rest of the visit fee is then paid for by the insurance company.
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Tests and surgeries, on the other hand, are billed to the insurance company upon completion. The company then determines what they consider an "acceptable fee" and then pay this amount. Anything beyond this so-called "acceptable fee" must be then paid by the patient.

Any urgent care or emergency room visits usually require a co-pay as well. Tests or treatments administered during these visits are then billed to insurance as usual. Hospital stays are something that should also be examined in a health insurance policy, as the coverage varies across companies and policies. Some cover costs up to a certain amount, while others require a daily fee to be paid for each day hospitalized.

Health Savings Plans are ideal for anyone with regular medical expenses. Individuals or families with chronic medical conditions should particularly consider a Health Savings Plan. Anyone who elects to use this service determines how much they spend annually on health-related costs. This amount is then divided up per paycheck, and deducted from the pay before taxes.

All medical expenses for the elected calendar year are then eligible to be paid for with funds from the Health Savings Plan. Some plans offer consumers a debit card that may be used for these expenses, withdrawing funds directly from their health savings plan.

Other plans require consumers to initially pay for the medical costs. An official form is then completed, and is sent in along with a receipt for the payment. For companies that accept a fax of the proof of purchase and reimbursement request, money may be received within a week usually.

Both traditional health insurance and Health Savings Plans certainly have their merit. As with any other service, it is necessary to first analyze your needs and then compare services in order to make an informed decision.

by: Casey Trillbar

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