How Health Insurance Works


When I consider purchasing an individual health insurance plan for myself or my family, do I have any financial obligations beyond the monthly premium and annual deductible?

Answers: It depends on the plan, but some plans have the following cost-sharing elements that you should be aware of.

Co-Payments: Some plans include a co-payment, which is typically a specific flat fee you pay for each medical service, such as $30 for an office visit. After the co-payment is made, the insurance company typically pays the remainder of the covered medical charges.

Deductibles: Some plans include a deductible, which typically refers to the amount of money you must pay each year before your health insurance plan starts to pay for covered medical expenses.

Coinsurance: Some plans include coinsurance. Coinsurance is a cost sharing requirement that makes you responsible for paying a certain percentage of any costs. The insurance company pays the remaining percentage of the covered medical expenses after your insurance deductible is met.

Out-of-pocket limit: Some plans include an out-of-pocket limit. Typically, the out-of-pocket limit is the maximum amount you will pay out of your own pocket for covered medical expenses in a given year. The out-of-pocket limit typically includes deductibles and coinsurance. But, out-of-pocket limits don’t typically apply to co-payments.

Lifetime maximum: Most plans include a lifetime maximum. Typically the lifetime maximum is the amount your insurance plan will pay for covered medical expenses in the course of your lifetime.

Exclusions & Limitations: Most health insurance carriers disclose exclusions & limitations of their plans. It is always a good idea to know what benefits are limited and which services are excluded on your plan. You will be obligated to pay for 100% of services that are excluded on your policy.

Beginning September 23, 2010, the Patient Protection and Affordable Care Act (health care reform) begins to phase out annual dollar limits. Starting on September 23, 2012, annual limits on health insurance plans must be at least $2 million. By 2014 no new health insurance plan will be permitted to have an annual dollar limit on most covered benefits.

Some health insurance plans purchased before March 23, 2010 have what is called “grandfathered status.” Health Insurance Plans with Grandfathered status are exempt from several changes required by health care reform including this phase out of annual limits on health coverage.

If you purchased your health insurance policy after March 23, 2010 and you’re due for a routine preventive care screening like a mammogram or colonoscopy, you may be able to receive that preventive care screening without making a co-payment. You can talk to your insurer or your licensed eHealthInsurance agent if you need help determining whether or not you qualify for a screening without a co-payment.

There are five important changes that occurred with individual and family health insurance policies on September 23, 2010.

Those changes are:
1. Added protection from rate increases: Insurance companies will need to publically disclose any rate increases and provide justification before raising your monthly premiums.
2. Added protection from having insurance canceled: An insurance company cannot cancel your policy except in cases of intentional misrepresentations or fraud.
3. Coverage for preventive care: Certain recommended preventive services, immunizations, and screenings will be covered with no cost sharing requirement.
4. No lifetime maximums on health coverage: No lifetime limits on the dollar value of those health benefits deemed to be essential by the Department of Health and Human Services.
5. No pre-existing condition exclusions for children: If you have children under the age of 19 with pre-existing medical conditions, their application for health insurance cannot be declined due to a pre-existing medical condition. In some states a child may need to wait for the state’s open-enrollment period before their application will be approved.

Read more all post Health :

    So we are screwed and the Health system scores again.

  2. Zoro Luffy says

    These devils insurance companies take money but refused to give back our money for life and death situation! United States strike against insurance companies

  3. TKN ZERO says

    they don't say anything about this in school but they sure teach us how to use unnecessary maths that i will never use in life, how to make batteries out of lemons and how to write shitty poetry. Thanks school! I will absolutely need all of that after i graduate

  4. Satbinder Rathour says

    why the music cant consentrate

  5. Antonio Castello says


  6. glenn johnson says

    It doesn't fuckin work

  7. Henbot says

    How have Americans let this whole health insurance systems stay in power when it trash

  8. Henbot says

    Wait is 100,000 $ the average for heart surgery ? in my country that shit is free. How can any American not be stuck in healthcare debt if they ain’t rich

  9. Illuminati aqi says

    Why USA is the best country in the world?? 'SIGH'


  10. BZ says

    Let me simplify how private marketplace health insurance works in three steps: (1) charge as much per customer as you possibly can, (2) deny as much actual coverage per customer as you possibly can and (3) treat the roughly 70,000 Americans who die every year because they can't access the health care they need as "externalities" (which, in non-corporate jargon, basically means disposable pieces of shit).

  11. icad9722 says

    The great thing about this is that "covered medical expenses" are not the actual covered medical expenses, cause you also gotta pay the "CME" as deductible plus out-of-pocket coinsurance percentage plus the latter again once the annual coverage limit is reached.

  12. Francis Suemitsu says

    Hope these kind of insurance or any insurance or investments will be taught in schools.

  13. Christoffer Mebius says

    Vote for Bernie Sanders!

  14. neohumanity says

    Single payer all the way. Screw this industry. (I've graduated college as an insurance underwriter)

  15. Bethlectic says

    "which is covered under your healthcare insurance plan" unlikely, but proceed…

  16. Lorenzo Alpine says

    Tell me we don't live on a Monopoly board. smh

  17. jo na says

    I still don’t understand

  18. Robert Palladino says
  19. John Brown says

    Quick guide: its a ripoff if you live in America.

  20. Jaelin Whittaker says

    How health insurance works:

    Money money money money money money money.

  21. Straw Man says

    Before insurance; "I'm not going to the damn doctor!"

    After insurance; "Hey dock, I think there's something in my butt again. You better have a look."

  22. Mohit Sharma says

    In India my father got the same surgery done in less than 2000$ and I guarantee that the doctor handson and cleaniness of hospitals are way far better, so basically travel to India 2000$ + surgery 2000$ + som other expenses in India 1000$ = 5000$ ? where she started with 100000$

  23. 郑海东 says

    Lenaring now

  24. Sagor Sarder says
  25. HassanProgram ツ says

    Hehe i’m in the UK

  26. wayne Last says

    This video only explains what the basic mechanics are for existing health insurance practice. It does not explain about the many faults and problems with the health care industry.

  27. Always Wondering says

    The cost of health is ruinous; it's seems bizarre.
    There are folk's who simply do not have money enough per month to both pay thier bills and buy medical cover-
    age; not even alone, but at all. Needless to say, paying out-of-,pocket is just not possible.
    'Odd' – with a capital O is that people who can just barely pay the bills for a spartan life-style are not qualified for governmental aid. They cannot see any doctor for any existing medical condition-no matter how bad it is. If you use any type of emergency service, a large bill follows you home.
    These people are completely screwed. And the insanity it takes to hopefully make changes is more painful than the illness'es that you cannot afford help with.
    I understand it, but it seems very strange.

  28. Anawa kyaw htut says

    Just like car insurance. They all are scams. I figured out how much it would cost me monthly to have an insurance policy on me then started saving aside weekly. I'll tell u mates that is the best insurance policy .

  29. Gy Bx says


  30. Abdul Qadir says

    The worst insurance ever like what's the hell it mean, pay monthly and then each time co-payments from your pocket. I used MAWISTA before this sh*t, that was way more better.

  31. Matrvus says


  32. AMBROSE EIDE says

    If you wanna run or get your own health insurance company or plan, get this premium domain name

  33. silverstar blackrose says

    Time to move to Canada

  34. The Ministry of Darkness says

    Im leaving America soon… Fuck America

  35. Red Bullseye says

    I have a 1500.00 deductible. I cant get my sleep study cause I would have to front 560.00 dollars. I pretty sure Im hardly ever sick enough every year to meet the deductible. Time to cancel my med insurance and live like a normal American. Sorry boss, Im trying to be productive but my body is shutting down do to sleep deprivation. I work in the medical field where I help care for people who are very sick, but when it comes time to keep the caregiver going no one cares.

  36. J McNeill says

    Wow I can't believe people have to deal with all this nonsense

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