Health Insurance 101 – A Comprehensive Guide
Understanding health insurance can be a tricky thing, especially because there are various types and factors to consider. Instead of spending hours researching which kind of policy is right for you, we have done the work for you.
According to the government Census of 2018, 27.5 million US citizens did not have health cover, which has increased in number since 2017. If you are one of the millions of American’s who do not have health coverage, you could be putting yourself at risk of thousands of dollars in debt if you fall ill. Don’t take that risk, find a suitable health care plan for you and your family below.
An overview of health insurance:
What is health insurance: Put into a simple sentence, health cover or health insurance is there to help you cover the costs of medical-related expenses.
There are 2 main types of health insurance that could be relevant to you:
- Private health insurance.
- Public health insurance – social insurance. These are health insurance plans provided to low-income earners, older adults or people who have special considerations. These plans come from the government to support those who need it. Some common programs are; Medicare, Medicaid and CHIP.
Public health insurance breakdown:
Medicare: Is a resource to help reduce financial stress and risks associated with major medical expenses for individuals who are senior members of society (over 65’s usually) and or/ those with disabilities. Provided by the federal social insurance program. It is also important to note the Affordable care act (2010) was to help lessen the load of costs that medicare takes on.
Medicaid: Is a social welfare program that covers low-income families and their children. Again it is federal and state government-funded and provided at a state level. To qualify for Medicaid your income needs to be 133% less than the poverty line and you must not qualify for medicare.
CHIP: This plan is for children and families that do not make the cut for any of the above plans in the public health insurance sector, but also cannot afford private health cover. It works by helping to cover a certain amount of money that leaves a gap between Medicaid and private cover.
Top takeaways of public health insurance:
- Affordable option
- Lower admin costs
- Less flexible with the health care providers you can choose from
- They supply a list of accepted providers
- Often, certain treatments are not included or covered even if they are deemed necessary for the patient.
Private health cover breakdown:
Private health insurance is a little more straight forward and it comes in 2 forms – Employer-provided or Individual.
1. Company/Employer Provided:
- Plans are provided in entirety or at a lower rate by your employer
- They are often included in your employment package
- The majority of American’s who have health cover, have this style of cover.
- Seen as an employment benefit
- Generous in nature compared to public health insurance and are much more flexible when it comes to choosing your health care providers.
Fun fact: The Affordable Care Act, (also known as Obamacare) was reformed in 2010, and in 2015 it was deemed that any employer who had over 50 full-time employees to provide health coverage to employees or they will face a tax penalty. The downside of this is that employees are often paid fewer wages to compensate for the health insurance payments paid by their place of work.
2. Individual health insurance:
- Taken out by individuals and families, chosen based on medical needs.
- Costs vary depending on the type of plan and benefits included in the plan.
- Fee-for-service health cover is one of the most expensive options but it offers the most flexibility when it comes to choosing who you want to treat you for different health care services.
- Health maintenance organizations (HMO’s) offer lower co-payments but are more prevention-based in their plans. They also provide a list of health care service providers that you must choose from, leaving little room for flexibility.
- PPO’s or preferred provider organizations offer plans that are more affordable in nature and are more flexible in the health care service providers you can choose from.
There are many key areas that should be considered when thinking about applying for or signing up for a health insurance policy. Whether it be public or private it is important to note if the services you need are in their network of providers and if you will be covered for the treatment you require.
If you don’t have cover:
Taking out health cover can seem like a daunting task, but there are simple things you can do to ensure you are applying for the right policy. Consider your current health needs and those of your family. Look to the future and think about any family history of health conditions that could affect you going forward. Your lifestyle choices can also influence your future, so ensure to make healthy choices and reduce your costs. Make your life easier by using a simple comparison tool that does the hard work for you and presents you with options that suit your personal circumstances.
Know the keywords:
Deductible: This is the amount you pay for covered services before your cover starts to pay for you.
Out of pocket maximum: This is the maximum amount you will pay in a year for services covered in your plan and 100% of costs will be covered once this amount is paid. When comparing which one is right for you, take a look at this amount.
Premium: Your monthly or yearly payment required to keep your plan valid.
Copayments: The dollar amount you pay for a covered service after you meet your deductible.
Coinsurance: The percentage of the cost you pay for a covered service after you meet your deductible.
Take a look at the range of government offered health cover plans to see if you are eligible for any of them before taking the leap into the private health insurance sector. That being said, there are certain restrictions and longer waiting periods for public health plan recipients so if you have specific or immediate health care needs, private cover might be a better option for you.
It is very important to take the time to read the fine print before signing up for health care plans. Here are some points to look for or ask about when enquiring:
- Can I choose my health care service providers or is there a specific list I need to select from?
- Are specialists, such as optometrists and dentists, covered?
- Which special treatments are covered e.g pregnancy.
- Does the plan cover some or all of the cost of my medications prescribed?
- What is the maximum amount for out of pocket expenses
- What kind of customer service/support service do you offer to your customers?
The Affordable Care Act:
The ACA was reformed in 2010 to allow American’s better access to health insurance that is affordable and includes a wider range of offerings such as; dental, medical, vision and more. It outlines a few key areas that have helped reduce discrimination and provides a better chance of care for everyone. Anyone under the age of 26 is allowed to remain on their parent’s health insurance and cover must be made available to all people despite pre-existing conditions or gender.