The Value of Health Insurance

Insurance helps pay costs when you need care – Insurance protects you from high costs when something bad happens. No one plans to get sick or hurt, but most people need to get treated for an illness or injury at some point, and health insurance helps pay these costs. You buy health insurance to protect you when you need medical care.

When you understand how health insurance works, it helps you be an informed consumer so you can find coverage that fits your needs.

What is health insurance? – Health insurance is a contract between you and your insurance company. You buy a plan or policy, and the company agrees to pay part of your medical expenses when you get sick or hurt.

Even when you need care that costs more than you pay in premiums and deductibles, insurance will cover the care you need. A standard health insurance policy also gives you access to preventive care to keep you healthy, like vaccines and check-ups. Many plans also cover prescription drugs.

Health insurance helps you pay for care –  Did you know the average cost of a 3-day hospital stay is $30,000? Or that fixing a broken leg can cost up to $7,500? Having health insurance can help protect you from unexpected costs like these.

Your insurance policy will show what types of care, treatments and services are covered, including how much the insurance company will pay for different treatments in different situations.

What you pay for health insurance – You’ll usually pay a premium every month for health insurance, and you may also have to meet a deductible once a year before the insurance company starts to pay its share. How much you pay for your premium and deductible is based on the type of insurance you have.

Just as important as the premium costs is how much you have to pay when you get services. Examples include:

— How much you pay before your insurance coverage starts (a deductible)

— What you pay out-of-pocket for services after you pay the deductible (coinsurance or co-payments)

— How much in total you’ll have to pay if you get sick (the out-of-pocket maximum)

What your policy covers is often directly related to how expensive the health insurance policy is. The policy with the cheapest premium may not cover many services and treatments.

For more information about how insurance works, visit

The above info was taken from a brochure written by CMS (product 11631 – December 2012)

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