Health Insurance Companies

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The concept of Health Insurance came into existence over three hundred years back. But even today there are a lot of controversies regarding this subject in social and political levels. As the population increases and the cost rises day by day, it has become very much important for the common people to know about the policies of Health Insurance Companies, their functionality and the role of both the Government and the public in this issue.

Origin of Health Insurance Companies

While starting their business operation, Health Insurance Companies used to provide coverage only when some disabilities were caused to the patients. But the modern concept of Health Insurance covers everything including pre and post hospitalization expenses.

The Functionality of Health Insurance Companies

Health insurance is basically an agreement between the consumer and the company whereby the customer agrees to pay a certain sum of premium and the company in turn promises to cover all emergencies and other medical conditions of the consumer as listed in the agreement.

Taking into consideration the rising cost of medical care, people are ready to pay the premium amount to the Health Insurance Companies in anticipation of their condition during any crisis period of ill health.

How the Health Insurance Companies Earn Profit

Many a times it is seen that the Health Insurance Companies need to pay more as coverage amount than they have actually received as premium. Still being into business they obviously earn some profit. This is possible due to certain policies on which the Health Insurance Companies survive.

Firstly, after scrutinizing the medical history of a proposed consumer, the high-risk individuals are either rejected or covered under an increased premium rate. The applicants having a medical history with normal parameters are covered under the general scheme. Secondly, while calculating the premiums, the statistical calculation on probability is done on the number of consumers falling ill in a particular year and accordingly the premium is charged to keep a profitable margin after covering all the costs.

To prevent consumers from claiming for unnecessary treatments, the Health Insurance Companies often charge some ‘out of pocket’ expenses from their consumers in the form of co-payment. Sometimes they also incur extra expenses like smoking cessation incentives that ensure their profitability in the long run.

How to find the suitable Health Insurance Company for You

To find out a suitable Health Insurance Company to cope with your needs, first of all you require to note a few points like whether you need a long term or short term insurance; how much of premium you can afford to pay, whether you need only basic coverage or a comprehensive one and whether the doctor or hospital you prefer, accepts that health insurance.

Then you can compare the rate quotes of different Health Insurance Companies and get feedback from your friend, relatives, your doctor and other sources that you trust. But the final decision should always be based on your own evaluation.

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