How does health insurance work?
When you sign up for coverage, you join a group of other people to combine your healthcare purchasing power.
Supplemental Health Insurance
Once you're set with your health insurance, the next thing to consider is dental insurance, vision, and other "supplemental" insurance.
Your employer may offer you the option to purchase these insurance plans at group rates. So you may pay the entire premium for these insurance products - sometimes called financial protection products because they help protect you from unpredictable illnesses and accidents.
These supplemental insurance products - also called voluntary or specialty products - can include:
- Dental insurance
- Vision coverage
- Life insurance
- Disability insurance
- Critical illness insurance
- Accident insurance
Dental Insurance
Dental insurance can be available by itself - called a stand-alone plan - or in conjunction with your medical insurance. Some plans pay up to 100 percent for basic dental care like cleanings and X-rays. A dental network can work just like a physician network, where the insurance company negotiates for in-network discounts on your behalf - and requires you to use in-network dentists.
Vision Insurance and Discounts
You're lucky if your employer offers you affordable vision insurance along with your medical and/or dental insurance. Vision plans can include simple discounts on frames and lens - even on Lasik and PRK procedures. Other vision plans cover your eye exam, frames, lenses, and contact lenses, with varying copays and allowances. Often, you'll need to use a specific network of providers - just like with medical or dental insurance.
Life Insurance and AD&D
Some employers offer basic and optional life insurance coverage:
- Basic life insurance - either a flat amount or a percentage of your salary
- Optional life insurance lets you buy more coverage at affordable group rates
An advantage of buying life insurance through your employer is you often don't have to answer any medical questions in order to be covered. Additionally, many life insurance plans include accidental death and dismemberment (AD&D) coverage.
Long-term Disability Insurance
Long-term disability insurance generally will pay you - after a waiting period - a percentage of your income if you're disabled because of an injury or illness and can't go to work. There's usually a waiting period after your disability occurs and before the benefits kick in - ranging from a month to a year.
Critical Illness / Specific Disease Insurance
Critical illness insurance can include coverage for a specific disease - such as heart disease, stroke, cancer, or other specific diseases. You must buy these before you get a diagnosis for the disease. Be sure to read the fine print on these policies - because there's a possibility not everything will be covered.
Accident Insurance
Accident insurance includes basic coverage that includes a certain amount for an accident, for an ambulance, and for hospitalization. Other specific things may be covered too, like bone fractures.
Long-term Care Insurance
Long-term care insurance may cover medical care, nursing care, and certain kinds of in-home care if you become ill or disabled and can't take care of yourself.
Learn more about the types of Health Insurance Plans.
Watch Healthcare Video: How does health insurance work?
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