Personal Health Insurance policies are binding agreements between you and your insurance company. Personal health insurance offers packages of medical benefits such as tests, drugs, and treatment services. The insurance company agrees to cover the cost of certain benefits listed in your policy. These are called “covered services.”

Insurance companies determine which tests, drugs and services they will cover. These choices are based on their understanding of the kinds of medical care that most patients need. Your insurance company’s choices may mean that the test, drug or service you need isn’t covered by your policy. You have to pay for any uncovered medical care that you receive.

personal health insuranceSome companies sell individual health insurance policies that contain limitations on pre-existing medical conditions that you may have before your insurance takes effect. Other health insurance policies contain an elimination period, which means that benefits will not be paid until after you have been hospitalized for a specified number of days.

When you apply for the policy, you may be allowed to choose among two or three elimination periods, with different premiums for each. Although you can reduce your premiums by choosing a longer elimination period, you should bear in mind that most patients are hospitalized for relatively brief periods of time. If you purchase a hospital indemnity policy, periodically review it to see if you need to increase your daily benefits to keep pace with rising health care costs.

Medicare supplement insurance, sometimes called Medigap or MedSup, is private insurance that helps cover some of the gaps in Medicare coverage. Medicare is the federal program of hospital and medical insurance primarily for people age 65 and over who are not covered by an employer’s plan.

Good agents and good health insurance companies want you to know what you are buying. Don’t be afraid to ask your benefits manager or health insurance agent to explain anything that is unclear.

Ask for the insurance company’s rating. The A.M. Best Company, Standard & Poor’s Corporation, and Moody’s all rate insurance companies after analyzing their financial records. These publications that list ratings usually can be found in the business section of libraries.

In some cases, after you buy a personal health insurance policy, if you find that it doesn’t meet your needs, you may have 30 days to return the policy and get your money back. This is called the “free look.”

Most of the things your doctor recommends will be covered by the usual health insurance plans, but some may not. When you have a test or treatment that isn’t covered, or you get a prescription filled for a drug that isn’t covered, your personal health insurance company may deny the claim. If your doctor thinks it’s right to make an appeal, he or she may be able to help you through the process.

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