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Understanding Your Health Insurance Policy - Part 1 of a 3 part series

Please  do not wait until a medical emergency or illness occurs before you know what health insurance policy covers. Although trying to read your policy may be as interesting as counting sheep while trying to get to sleep, it is important to gain enough information about your policy to understand the basic policy terms and what it covers.  Of course, reading your benefit booklet may help you get to sleep, if you are having sleep problems!  

When you sign up for an insurance policy, you are agreeing to follow the rules of the plan. Most people are given a benefit booklet that they file away and never read. The benefit booklet defines your benefits and your obligations; and how to access additional information.   If in doubt about what your benefits are, or any other questions about your responsibilities, always call customer service (the number is usually found on your identification card).  

If you have a PPO (preferred provider organization) plan, it means you have a specific network of providers.  Read your summary of benefits to understand the difference in benefits between using a network, versus a non network provider.   

Where to begin reading your benefit booklet? A good place to start is by looking at the policy’s definition/glossary section. Understand the terminology being used in the policy and/or how specific terms are defined are critical to gaining an understanding of your benefits.

After you have a basic understanding of the terms, the next important thing about your plan is finding out whether there is a waiting period. A waiting period is a specific period of time when you are not covered by your insurance. Some plans have a 30 day wait, others 60 or 90 and some are effective immediately. If you go to a doctor before the waiting period has been met, you will be responsible for the full amount of the medical bill.

In addition to a possible waiting period, some plans may have a pre-existing condition clause. A pre-existing condition, is a medical condition that is excluded from coverage by an insurance company, because the condition was believed to exist prior to the individual obtaining a policy from the particular insurance company. Some policies will never cover a pre-existing condition, others will cover them after a specific amount of time has gone by and other plans may cover pre-existing conditions from the start.

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