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Health insurance in the United States can be complicated and difficult to understand. For many, it is also stressful. What does a plan cover and not cover? What does it cost? Which are the best plans?
It is important to have health insurance, especially if you have a chronic health condition like asthma. Peoplewithout insurance are less likely to gain access to needed healthcare services and medications. They may get sick more often and have poorer health outcomes. They may choose not to go to doctors due to concerns over cost. They may even delay or forgo needed care.
Having health insurance does not guarantee good health. It does offer greater access to care and can lead to better health outcomes. Insurance is the gateway to getting healthcare from a primary care doctor, specialist, and hospital. Health insurance also helps pay for needed medications.
It is important to choose a plan that fits your healthcare needs and finances. This means…
- Knowing what you need from health insurance
- Comparing the costs and benefits of health insurance plans
- Confirming your doctors are part of the health insurance plan you choose
- Looking at prescription drug coverage
- Assessing out-of-pocket limits
Navigating insurance coverage options can feel overwhelming. Some people may rush through the decision-making process without knowing all the details. Investing time to understand the basics of health insurance coverage can pay off.
5 Questions to Ask When Considering a Health Insurance Plan
Here is a list of questions to ask yourself when considering different health insurance plans.
1. What type of insurance is right for me?
Do I need an individual or a family plan? Is a high deductible plan something that works for my current health needs and budget?
2. What type of insurance do I qualify for?
Many employers offer insurance. The cost is usually deducted from the employee’s paycheck. If your employer does not offer health insurance, there are ways for you to still get coverage. This could be through government programs like Medicare and Medicaid if eligible, or through the Affordable Care Act and the health insurance marketplace. You can also contact a broker and buy your own health insurance.
Medicare is run by the federal government. Insurance Coverage eligibility is based on age, with certain exceptions. Members pay some out-of-pocket costs. Medicaid is a government health plan set by income limits and run through U.S. states. You may qualify for Medicaid if your yearly income is under a certain amount.
3. What coverage does the insurance plan offer?
If you have a serious health condition like asthma, you need to make sure the plan will cover your needs. This includes doctor visits, treatments, and medications.
Do you have a favorite doctor? Check to see if your doctor accepts the insurance. Not every doctor is accepted by every insurance plan. Are your medication(s) covered? Not every medication is covered by every policy.
4. What is the cost?
Consider the monthly premium. If your employer offers health insurance, the premium is usually deducted from paychecks. What are the copays for doctor visits, urgent care, hospital stays and medications? Is there a deductible? Can you afford this insurance? And will it meet your healthcare needs based on what it costs?
5. How much control do I want in determining care?
If you want help picking a doctor, then consider an HMO. You will need to get a referral from a primary care doctor to see a specialist in an HMO.
But if you want freedom to see a doctor without a referral, then a PPO may be for you. If you have conditions like asthma or other breathing issues, it may be useful to see the physician of your choice instead of waiting for a referral to be processed, approved or denied.
Understanding The Types of Health Insurance Coverage
What type of plan is best for you? The answer may depend on your job, state, income, age, and the types of insurance coverage available to you. Employers generally offer one type of plan for all employees so make sure it fits your needs.
Choose a healthcare plan that provides the coverage you need at an affordable price. Think about your healthcare needs. Compare coverage options. Consider the costs and benefits. Ask for help. Having a healthcare plan that fits your needs can give you peace of mind. And it can protect you from unexpected medical expenses.
Private or Commercial Health Insurance
The terms “private” and “commercial” for health insurance are used in the same way. Private companies and organizations offer these types of plans. Aetna, Anthem and Cigna are a few examples. You can get coverage through an employer or direct from the health insurance company.
Private or commercial plans cover the cost of medical services in part or in full. These services may include doctor visits, hospital stays, medications, and preventative care. The insurance plan may offer extra benefits. These benefits may include dental, vision and mental health services. It can be easier for people with private/commercial plans to get healthcare services. Those with government insurance programs may experience delays.
Consider the following when choosing a private/commercial plan:
- Understand that premiums can be expensive, especially for families.
- Networks may limit the choice of healthcare providers.
- Deductibles, copays, and coinsurance are all out of pocket costs.
Members should review each potential policy. Then they can choose the best option for their needs.
Health Insurance Marketplace Plans (Affordable Care Act)
The Health Insurance Marketplace is a government website. People can shop for and enroll in private health insurance plans.
The Affordable Care Act (ACA) created the Marketplace in 2010. The plans must cover certain health benefits. These may include preventive care, hospital visits, and emergency services.
These plans are for people without employer health insurance. Some people may qualify for financial help to help pay for their premiums. This help is for those with low or moderate income.
Government Health Insurance Programs
Government health insurance is a government program. The programs provide healthcare coverage for members. The two most well-known programs are Medicare and Medicaid.
- Medicare: Federal health insurance for those 65 or older. Some people living with certain disabilities may qualify as well.
- Medicaid: A program available to all 50 states but coverage varies from state to state. It provides coverage to low-income people including families and children.
The government also offers special insurance programs for select groups based on eligibility.
- Tricare: Health insurance for active duty and retired members of the U.S. military and their families.
- Indian Health Services: Healthcare for federally recognized American Indians and Alaska Natives. Indian Health Services is an agency within the U.S. Department of Health and Human Services (HHS).
- Veterans Affairs (VA) Health Care: Healthcare for all eligible military veterans. Military service and discharge status determine eligibility. Income or ability to pay does not affect eligibility.
Health Maintenance Organizations (HMO)
An HMO plan is a type of health insurance plan. It offers complete coverage for medical services through a network of healthcare providers.
Key features of HMO plans:
- Primary Care Physician (PCP): Members select a primary care physician from within the HMO network. The PCP serves as the main point of contact for the member’s healthcare. This includes preventive care and referrals to specialists when needed. HMO plans require a referral from the PCP to see a specialist.
- Network of Providers: HMO plans have a network of providers. This network includes physicians, hospitals, clinics, and other healthcare facilities. The insurance company has negotiated discounted rates with each provider.
- Coverage for Out-of-Network Services: HMO plans do not usually cover out-of-network service. This makes them different from other insurance plans. Emergencies are an exception. This is also true for certain types of care that are not available in-network. Seeing an out-of-network provider in a non-emergency may mean you’ll have to pay for the full cost of the services.
- Preventive Care: Many HMO plans provide coverage for preventive services. This could include vaccines, screenings, and annual check-ups. These will likely be no-cost to the member.
- Cost Structure: HMO plans have a predictable cost structure. Members pay a fixed copay for office visits, medications and other covered procedures and visits. They also pay a monthly premium and an annual deductible. HMO plans tend to have lower premiums. They also have lower out-of-pocket costs compared to other types of insurance plans.
- Coordination of Care: HMO plans have an advantage. They often involve care coordination among providers in the network. This can help ensure that members receive complete healthcare services. They can focus on managing chronic conditions and avoiding hospital visits.
Preferred Provider Organization (PPO)
A PPO is another common type of health insurance plan. This plan is more flexible. The members can choose the healthcare providers they want to see.
Key features of PPO plans:
Provider Network: PPO plans have a network of preferred healthcare providers. This includes physicians, hospitals, specialists, and other healthcare facilities. PPOs allow members to seek care from in-network and out-of-network providers. This is the main difference from an HMO plan. Remember, in-network providers cost the insured person less.
In-Network vs. Out-of-Network Coverage: In-network providers have negotiated discounted rates with the insurance company. This means members may pay less when they use in-network services. They may pay lower co-pays, coinsurance and deductibles. Out-of-network providers have not contracted with the insurance company. Members may pay more for services received from out-of-network providers.
No Referrals Required: PPO plan members typically do not need to choose a primary care physician. They don’t need a referral from a PCP to see a specialist. Members can visit any healthcare provider within the PPO network. PPO plans are good for people who value flexibility when making healthcare decisions.
Coverage for Out-of-Network Services: PPO plans provide coverage for out-of-network services. But members may pay higher out-of-pocket costs. This includes higher coinsurance rates and deductibles. Some PPO plans make members pay a percent of the provider’s charge. This is known as balance billing. It applies to out-of-network services that cost more.
Cost Structure: PPO plans have a more flexible cost structure than HMO plans. Members pay a monthly premium. They also pay co-payments or coinsurance for covered services. PPO plans often have higher premiums and out-of-pocket costs. They offer members the choice of healthcare providers and accessing out-of-network services.
High Deductible Plans
High deductible plans are another type of health insurance plan. They have lower monthly premiums. But they have higher deductibles.
Key features of high deductible plans:
High Deductible: These plans have higher annual deductibles than traditional health insurance plans. Members pay 100% of out-of-pocket costs for healthcare services. Once the deductible is met, the insurance company starts to pay their share.
Lower Premiums: One advantage of these plans is that they have lower monthly premiums. They may be a good option for people looking to save on monthly costs, especially if they don’t need regular care or don’t have chronic conditions.
Health Savings Account (HSA): High deductible plans are often paired with a health savings account. These are tax-advantaged savings accounts. These can be used to pay for qualified medical expenses. Adding money to an HSA is tax-deductible.
Coverage and Benefits: High deductible plans provide coverage for the same medical services as traditional health insurance plans. This includes doctor visits and hospital stays. It also includes medications, preventive care, and other healthcare needs.
Risk of High Costs: A potential drawback of a high deductible plan is that people have higher out-of-pocket costs. This can be expensive if you need significant medical care. Members must pay the full cost of covered services until they meet their deductible. People with these plans may face financial challenges if they need expensive medical treatments or services.
If you are considering a high deductible plan, consider the following:
- your healthcare needs
- your financial situation
- your tolerance for risk
High deductible plans may be a good option for healthy people who don’t need a lot of medical care. People with chronic conditions, including asthma, may want to think about a different option.
In-Network Services vs. Out-of-Network Services
Choosing in-network doctors can keep out-of-pocket costs lower for insured members. However, staying in the network of providers may not offer the flexibility a patient wants in choosing who to see for care. Keep your healthcare needs in mind to find the best coverage.
Here is a breakdown of both:
In-Network Services
Preferred Providers: Healthcare providers that contract with the insurance company to provide services at an agreed rate. This could be single physicians or hospitals and clinics. These are referred to as “preferred providers” or “in-network providers.”
Lower Costs: Plans may offer lower costs for services received from in-network providers. This includes lower co-pays, coinsurance rates and deductibles. Insurance companies negotiate discounted rates with in-network providers. This results in significant savings.
Coverage and Reimbursement: The insurance company reimburses the in-network provider for covered services based on a negotiated rate. The member is responsible for co-pays, coinsurance, or deductibles.
Provider Lists: Members receive a list of in-network providers to help them find doctors. These help insured members find in-network healthcare providers.
Out-of-Network Services
Non-Preferred Providers: These healthcare providers have not contracted with the insurance company. They are referred to as “non-preferred” or “out-of-network” providers.
Higher Costs: Seeking medical care from an out-of-network provider may cost more money. This could mean higher coinsurance rates, deductibles, and out-of-pocket maximums.
Coverage and Reimbursement: Out-of-network services may still be covered by the insurance plan. Insurance companies may reimburse out-of-network providers at a lower rate. This means the insured person will be responsible for the remaining balance.
Provider Choice: Choosing medical care not in the network may offer more options. This may be useful for people who have established relationships with doctors, especially specialists. However, these options may come with higher costs. Getting paid back for healthcare services may be difficult.
How to Choose a Health Insurance Plan
Choosing the right health insurance plan involves many factors. These include cost, coverage, provider network, drug coverage, and out-of-pocket maximums. Follow these steps to make an informed decision.
1. Assess Your Healthcare Needs: Determine your typical healthcare needs. This can include doctor visits, medications, and ongoing medical conditions. You want to choose a plan that meets your healthcare needs.
2. Compare Premiums and Deductibles: Compare the
monthly premiums and annual deductibles of different plans. Remember, a
lower premium may come with a higher deductible. Consider your budget
and healthcare usage to find the right balance.
3. Check Coverage and Benefits: Review the coverage
details. This includes inpatient and outpatient services. It includes
preventive care, mental health services and maternity care. Ensure the
plan covers your specific medical needs.
4. Check Provider Networks: Make sure your plan’s network includes your preferred healthcare providers. Out-of-network care may result in higher costs or no coverage.
5. Review Prescription Drug Coverage: Make sure the prescription medications you take are covered and at what cost. Consider any copays or coinsurance for medications.
6. Consider Out-of-Pocket Maximums: Understand the
plan’s out-of-pocket maximum. This limits the amount you pay for covered
services in a year. Compare this limit across different plans to assess
financial risk.
5 Benefits of Health Insurance
Health insurance helps people better afford expensive medical care. It also can help you get the quality care you deserve.
1. Access to Healthcare Services
Without insurance, the below services can be very expensive:
- Office visits
- Specialist visits
- Hospital stays
- Preventative care
- Emergency room visits
- Prescription medications
2. Financial Protection
In most cases, health insurance can protect people from high medical costs. People pay monthly premiums, deductibles, co-pays and coinsurance to share the cost of medical care with the insurance company. This can help people avoid big medical bills from illness or injury.
3. Coverage for Chronic Conditions
Health insurance provides coverage for managing and treating chronic conditions. Chronic conditions might include asthma, COPD, eczema, diabetes, heart disease and cancer. Insurance helps people with chronic illnesses get needed medications, treatments, and services.
4. Peace of Mind
Knowing you have health insurance can allow you to focus on getting better. You don’t have to worry about how you will pay for your healthcare needs.
5. Societal Benefits
Most people don’t consider the benefits to society when choosing health insurance. And rightly so. Health insurance is a highly personal decision. But from a big-picture perspective, early detection and treatment of health problems can prevent the need for more expensive medical interventions. This decreases the strain on the healthcare system.
Glossary of Terms
Affordable Care Act (ACA): A federal law passed in 2010 that standardized healthcare coverage in the United States. State and federal exchange programs that used the health insurance marketplace expanded access to health insurance access, especially for the uninsured. ACA mandates insurance companies cover 10 essential health benefits such as yearly wellness exams, some hospital care, certain medications, pregnancy and childbirth.
Coinsurance: The percentage of costs the member pays for healthcare services. Example: If you have an “80/20” plan, the insurance company pays 80% of the expense. The member pays the 20% of the cost.
Copays: Fixed amounts that members pay for services. This can include office visits, specialist visits, emergency room visits and medications. Copay costs vary from plan to plan.
Costs: The amount of money you pay for insurance. This includes monthly premiums, deductibles, co-pays, and coinsurance.
Coverage: The medical services and treatments the plan covers. This includes hospital stays, office visits, prescription drugs, preventive care and specialist visits.
Deductible: Money the member pays for medical services and medications before the insurance pays for service(s).
Health Maintenance Organization (HMO): A common type of health plan that provides health care coverage to its members through a network of doctors, hospitals and other health care providers. An HMO may cost less than other plans, but has coverage limitations.
Health Savings Account (HSA): A type of savings account that lets you set aside money on a pre-tax basis to cover for qualified medical needs. By using untaxed dollars in an HSA to pay for deductibles, copayments, coinsurance, and some other expenses, you may lower your out-of-pocket health care costs. HSA funds generally may not be used to pay premiums. Not all insurance plans qualify for an HSA.
High Deductible Health Plan – Type of insurance plan with lower monthly premiums and high deductibles. This may be a good option for people who do not use or need a lot of healthcare and want to save on monthly costs.
In-Network Coverage: Members have access to specific doctors approved by the insurer.
Medicaid: State-run health insurance program to cover people with low income.
Medicare: A federal government program that provides healthcare coverages for people age 65 or older, or under age 65 with a disability.
Open Enrollment: Time of the year when individuals can sign up for health insurance plans or change plans. This happens once a year, usually in the fall.
Out-of-Network Coverage: Some health insurance plans allow members to see doctors who do not have a contract with the insurance carrier. Members may pay more for these medical services and have higher premiums.
Out-of-Pocket Maximum: The most money a member pays out-of-pocket for medical expenses for the year. Once this is met, insurance pays 100% of the cost for covered benefits for the rest of the year.
Preferred Provider Organization (PPO): Type of common insurance plan with a network of health care providers. Unlike an HMO, a PPO offers more flexibility. Generally, referrals are not needed to see specialists and members can see doctors who do not contract with the insurance firm.
Premium: The cost paid monthly for health care coverage. If your employer covers your insurance, they will deduct premiums from your paycheck.
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