Guide To Health Insurance.org

Without health insurance, a single hospital stay could leave you deep in debt and your savings account empty. By having health insurance you gain some peace of mind. Insurance companies pay for most of the bill, but exactly how much they pay depends on the contract, or policy, you sign with them. Insurance company practices vary from plan to plan, so be sure to compare premium, deductible, and co-payment amounts, and the level of service they provide, before choosing an insurance product.

Insurance companies charge a premium for their services. This is the monthly bill you must pay each month for coverage and services, and prices vary depending on your age and dependents. Fee-for-service, also called indemnity plans, usually require you to pay a deductible. Your deductible is the amount of money you must pay for health care expenses before your insurer will pay. Insurance companies have deductibles as a way to make sure you are seeking services for actual medical problems. Your insurance provider might also require you to pay a co-payment. This is a cost sharing arrangement, where you might pay $20 for a doctor's visit or $10 to for a drug prescription and the insurance company pays the rest of the fees.

By Doug Vanisky

How Much Does a Plan Spend on Administrative Cost
When someone asks an insurance company to pay a bill, this is called a "Claim." The "Medical Loss Ratio" is the amount that an insurance company pays for claims divided by the premiums that people paid for insurance.
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Adverse Selection and Cream Skimming
"Adverse Selection" happens when unusually high-cost people select an insurance plan. Informally, people often use the term adverse selection when people with expected costs that are higher than a population average sign up for a policy.
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