Health care, especially in emergency situations, can be too expensive for most people to afford on their own. But foregoing hospital and physician care is not a reasonable solution. The sound alternative is medical insurance. Medical insurance essentially reimburses you for a large portion of your health care costs when they arise, making the care more affordable to you. And although insurance can be expensive, the cost of treating an unforeseen illness or injury is likely be much more.

How your medical insurance policy influences your health care
Your medical insurance policy decides a lot more than simply whether you'll get treatment for an injury or illness and how much health care is covered. Your policy type and carrier also determine who will provide for your health care, where and when you receive health care, the quality of your health care, and how much you pay for your health care.

Unfortunately, all these factors add up to one complicated mess. Many people don't even understand the medical insurance policy they may already have, much less how to shop for a better one.

Buying a medical insurance policy is more of an ongoing process than a one time purchase. To maintain your health coverage, each month you pay a fee, or premium to your medical insurance company.

This payment is similar to club dues. The money is not earmarked specifically for your use, but is instead the cost of membership. In this case, your premium won't go only towards your future health care services; it's simply the fee you pay to be covered by your health insurance company.

But the cost of health services is not simply eliminated by paying the monthly premium. There are other costs associated with major medical insurance coverage.

The first cost you'll encounter is the deductible. The deductible is a pre-arranged dollar figure that you'll have to satisfy before the health insurance company begins to contribute any money to your health care costs.

Your deductible can be a significant out-of-pocket expense, particularly because it must be satisfied each year before the company pays. (So paying $1000 this year for medical services will not decrease your deductible next year.)

Deductibles can range from a few hundred dollars to a few thousand. Some health insurance policies do not have deductibles ever and others have them only in certain cases.

The other expenses are co-payments and co-insurance. All medical insurance policies will ask that you agree to one or both of these charges. Co-insurance means you'll be required to pay a certain percentage of your health care costs, and a co-payment means you'll be required to pay a certain dollar figure for each service.