What Is Health Insurance?
Health insurance is a product that covers your medical expenses sometimes refer to as medical insurance or medical health plans. Like auto insurance covers your car if you get into an accident, health insurance covers you if you get sick or injured. Health insurance also covers preventive care – i.e., doctors visits and tests before you get sick.
Health insurance is a good way to help you manage your health care costs. You pay health care companies premiums – a set amount of money each month - and you get benefits to pay for your eligible health care expenses. This can include regular doctor checkups or injuries to treatment for long-term illnesses.
Health insurance doesn’t always cover 100% of your costs. In fact, it’s designed to share costs with you up until a certain point, called the out-of-pocket limit. After you hit the out-of-pocket limit, health insurance will pay 100% of your healthcare costs.
There are a few ways that health insurance companies might share costs with you or structure their medical policy, and usually those are the main major features differentiating them outside of their provider network.
What is a premium?
Premiums are regular payments to keep your health care plan active. Higher premiums usually mean lower deductibles.
Deductible
A deductible is the amount you pay out-of-pocket for covered services before your health plan kicks in. A plan with $2500 Deductible means that amount will need to be cover before the insurance kicks in.
Copayment/Coinsurance
- Copays are flat fees for certain visits. Will specify in the Plan information detail. - Coinsurance is the percentage of the bill you pay after you meet your deductible. Example: $300 dollar specialist visit or procedure in a 20% coinsure policy with no deductible health insurance subscriber will pays 300 x .20 = $60 is the responsibility of patient.
Out-of-pocket limit/ Out of pocket max
What is Out of Pocket maximum or Out of Pocket Limit?Out of Pocket Max is the maximum amount that the subscriber of a health plan is responsible for in a given time frame. Meaning that after the $ amount of maximum is reach, subscriber will not need to pay any out of pocket expense.
When can I enroll?
Most of the time, you may enroll only during an open enrollment period. Nov 1- Dec 15th of each year, for Medicare it is October 15 – December 7th.For Supplemental Insurance, Open enrollment usually is at the start of Company’s fiscal year (before the December 31st )
Between open enrollment you have 2 options: Qualifying life events and short term!!!!
If you’re between open enrollment periods, you might be eligible for special enrollment. Take a look at the list of qualifying life events - including marriage, birth of a baby, change of address, job change and more – to see if this option will work for you.
What is a qualifying life event?
One of the things you can count on in life is change. When those changes come, they might open the door for you to qualify to sign up for health insurance outside the annual open enrollment period. Here’s what you need to know:
Sign up right away
Usually, you’ll need to make changes within 30 or 60 days of your qualifying life event, depending on your plan. If you miss this deadline, you may have to wait until the next open enrollment – and that could be up to 11 months away.Types of qualifying life events
Family
Whether it’s marriage, retirement, loss of a loved one or birth of a new baby, there are many family-related life events that may qualify.Getting married. When you’re starting your new life as a couple, take a look at your medical picture, your budget, and your plans for creating a family and choose a health plan that’s the right match for you.
Bringing children into the family. Growing your family by having a baby, adoption or foster care means it’s time to take a closer look and make sure everyone’s medical needs are met by your health plan.
Divorce. As you navigate the details of a divorce, your health plan is an important factor to consider and change as you need - both for you and any family members that need coverage.
Losing a loved one. Coping with the death of a loved one is emotionally difficult and often brings life changes which can mean a change in how you manage your health insurance coverage.
Turning 26
No longer on your parents’ health insurance? No worries—there are budget-friendly plans designed specifically for you. The age of 26 is a benchmark birthday when it comes to health insurance. It means it’s time to get coverage that’s separate from your parents’ plan.Maybe you’ve been on your own awhile. Maybe this is the first time you’re taking charge of life. Either way, when you turn 26, it’s your time to take the lead on choosing a health plan that’s right for you.
Change of Address
Moving out of state? Or simply moved out of your existing coverage area? For an unexpected relocation, you may qualify for special enrollment.You’re moving to an area where you current coverage isn’t available.
You’re moving to an area where your current coverage is still available - but there are new plans that you can get because of the move.
Job
If you’re starting a new job, losing the one you have or have other employment-related circumstances, you may qualify for special enrollment.Losing a job – either voluntary or involuntary – is a life event that qualifies you for a special enrollment period for health insurance coverage. Here are the job changes that qualify:
You were laid off or dismissed. Losing a job can be very difficult when it’s not your choice. While you’re taking a look at next steps, you can choose a plan that will give you the coverage you need.
You resigned, quit or retired. Even if it was your choice to make a change, it’s still a big change. While you’re looking for a new job or while you’re waiting for Medicare coverage to start, you can choose a plan that works for you
Timing is everything
Remember that the window of time for making changes to your health benefit plan is only open for a short period of time – usually either 30 or 60 days after the qualifying life event happens. Get started with making changes right away so you’ll be able to take advantage and get the coverage you want and need. For more information, check your plan documents or contact your employer.What are the 10 essential benefits?
All health insurance plans need to cover the ten essential benefits……
Prescription Drugs
The federal government has categorized approved prescription drugs. One from each category must be covered.
Pediatric Services
This includes dental care, vision care, well-child visits, vaccinations, and immunizations. Dental and vision care must be offered to children through the age of 18 (2 routine dental exams; 1 yearly eye exam with corrective lenses).
Preventive and Wellness Services and Chronic Disease Management
Includes services like: counseling; cancer, asthma, diabetes screenings; physicals; and vaccines.
Emergency Services
Basically, this is a trip to the emergency room where you truly need care as soon as possible. This also means that you won’t be penalized if the hospital is out of network.
Hospitalization
Treatment you receive in the hospital as part of inpatient care. Plans may limit coverage for extended stay.
Mental Health and Addiction Services
This includes services to treat behavioral health, provide counseling, or provide psychotherapy.
Pregnancy, Maternity, and Newborn Care
These are services that care for you and your baby before, during, and shortly after giving birth.
Ambulatory Patient Services
This is outpatient care you receive without being admitted to the hospital. Many health insurance plans already provided this coverage prior to the ACA, because it’s the most common form of healthcare.
Laboratory Services
This includes testing to diagnose, to gauge effectiveness, and some preventive screenings.
Rehabilitative and Habilitative Services and Devices
These services help you recover if you are injured, have a disability, or have a chronic condition. At least 30 physical therapy, occupational therapy, or chiropractic visits. At least 30 speech therapy, cardiac, or pulmonary rehab visits.In addition to the ten essential benefits, health insurance plans must meet certain affordability standards, as well as other rules that vary on a state-by-state basis, in order to be included on a government-run health insurance exchange.
OFF-exchange plans or Private Insurance Plans need to have the 10 essential benefits?
Off-exchange plans sometimes called PRIVATE INSURANCE PLANS are not sold on government-run exchanges, must also cover the ten essential benefits and meet certain federal standards in order to be considered qualifying health coverage.
Types of private health insurance
HMO: A budget-friendly plan
A Health Maintenance Organization (HMO) plan is one of the cheapest types of health insurance. It has low premiums and deductibles, and fixed copays for doctor visits. HMOs require you to choose doctors within their network. When you sign up for the plan, you’ll select a primary care physician (PCP), whom you’ll see for regular checkups. Your PCP will need to give you a referral before you can see a specialist, like a dermatologist (skin doctor). Because all your health services are funneled through your PCP, it’s important to find one you trust. HMOs are a good choice if you’re on a tight budget and don’t have many medical issues.
POS: An affordable plan with out-of-network coverage
As with an HMO, a Point of Service (POS) plan requires that you get a referral from your primary care physician (PCP) before seeing a specialist. But for slightly higher premiums than an HMO, this plan covers out-of-network doctors, though you’ll pay more than for in-network doctors. This is an important difference if you are managing a condition and one or more of your doctors are not in network.EPO: A larger network makes life easier
An Exclusive Provider Organization (EPO) is a lesser-known plan type. Like HMOs, EPOs cover only in-network care, but networks are generally larger than for HMOs. They may or may not require referrals from a primary care physician. Premiums are higher than HMOs, but lower than PPOs.
PPO: The plan with the most freedom
A Preferred Provider Organization (PPO) has pricier premiums than an HMO or POS. But this plan allows you to see specialists and out-of-network doctors without a referral. Copays and coinsurance for in-network doctors are low. If you know you’ll need more health care in the coming year and you can afford higher premiums, a PPO is a good choice.HDHP with HSA: Offset out-of-pocket costs with a health savings account
A High Deductible Health Plan (HDHP) has low premiums but higher immediate out-of-pocket costs. Employers often pair HDHPs with a Health Savings Account (HSA) funded to cover some or all of your deductible. You may also deposit pre-tax dollars in your account to cover medical expenses, saving you about 30%. And remember, depending on your age, services such as mammograms, colonoscopies, annual well visits and vaccinations may be covered free of charge, even if you haven’t met your deductible.
How do health care accounts work?
Key takeaways about HSAs and FSAs.
- Both accounts offer tax benefits and have annual contribution limits.
- You must have a high-deductible health plan (HDHP) to qualify for an HSA.
- Funds from your HSA roll over year after year.
- Some HSAs offer investment options.
- HSA holders cannot spend more than the funds that have been deducted from their paycheck. However, they can file for reimbursement later in the year.
- You can't contribute to an HSA and a traditional FSA in the same year. But HSA holders can contribute to an LPFSA for dental and vision expenses, and to a Dependent Care FSA for child care costs.
- FSAs work on a "use it or lose it" basis, meaning any funds not spent by the end of your plan year will be lost, unless the plan has a grace period or rollover feature.
- You can use your FSA to cover eligible health care expenses early in the year, as long as you plan to contribute what's necessary to cover those expenses by the year's end.
- You contribute funds to an HSA and FSA, but only your employer can contribute to your HRA.
- With HRAs, employers may limit which health expenses are eligible and the amount you’re able to roll over from year to year.
If you like saving money, you’ll want to know more about Flexible Savings Accounts and Health Savings Accounts. Both let you deposit pre-tax dollars to cover health care expenses, saving you about 30 cents on the dollar.
Who should buy health insurance?
Literally everyone should buy health insurance because it’s mandatory (unless you qualify for a hardship exemption). But you might be thinking that it makes more sense to take the tax hit than to buy an expensive health insurance policy you don’t need. First, you should know that health insurance can be less expensive than the tax fee you face if you don’t have health insurance. Secondly, the amount you’d have to pay out-of-pocket for a medical emergency if you don’t have health insurance is much, much higher than the tax fee. Medical bills are a leading cause of consumer debt and related financial problems (e.g., bankruptcy and home foreclosure).For a Family
If you have children, it’s likely that they may need to visit the doctor or urgent care more frequently than a relatively healthy adult. Make sure that you have a plan in place, or in work that your dependent (aka childrens) are covered. Many states offer Medicaid run plans, for certain income earning threshold and most cover childrens until they reach the age of 18 years of age.
Student
You can stay on a parent’s health insurance plan until you’re 26-years-old, so no need to buy health insurance if your parents are willing to let you stay on their plan. You can also check your university for health insurance plans, which may be more affordable. This is an especially good option if you’re going to college out-of-state, as your parent’s plan’s network may not work in your state.
Self-employed
Make sure your premiums are affordable, as your monthly income may be variable. If you meet the income threshold apply for ACA, it was design for 1099 employees in mind. Your health insurance premiums are also tax deductible, so don’t forget that come tax time. Additionally, if you travel frequently, you may want to purchase a plan that allows you to see out-of-network providers, like a PPO or POS plan.
Employee of Company
If your company does not offer Health Insurance you can apply directly, use a holistic plan, short term, discount plan. Companies can also setup FSA and HRA by utilizing our platform for business, provider, employees.
With Low-Income
If your income is between 100% and 400% of the federal poverty line, you likely qualify for a subsidy from the health insurance marketplace, or Medicaid. This subsidy can help make health insurance more affordable or if income is low enough you will be given a Medicaid card to get health coverage.With HIGH-Income
If your job gives you the ability to save than HRA, and FSA might be a good option. Private insurance or Off-exchange is another, while the gap period you can always cover it with short term insurance.
Veteran
If you’re a veteran, you may qualify for health care through the U.S. Department of Veterans Affairs (VA). The Affordable Care Act does not change VA health benefits. If you qualify for VA health benefits, you do not need to purchase an additional health insurance plan to meet the Affordable Care Act’s health insurance mandate.
Pregnant
All health insurance plans that count as qualifying health insurance cover pregnancy and childbirth related services BUT always check your states as many cover maternity care and childbirth under Medicaid plan depending on income bracket. Pregnancy with many ACA plans or state run programs may be covered even if you became pregnant before your coverage starts.
Senior Citizen
If you’re above the age of 65, you likely qualify for Medicare. You can also purchase supplemental insurance, called Medigap, that can help pay for your deductibles, copayments, and coinsurance. Medigap plans may or may not make sense for you – make sure you know what you’re buying before you start to pay for it.Military
If you’re an active duty service member, your health care (and your family’s health care) is covered by TRICARE. You do not need to purchase additional health insurance to comply with the ACA.
Married, but don’t have kids
If you’re married but don’t have kids, you don’t need to buy health insurance as a family. You can buy individual plans from separate companies, if that makes sense for you and your spouse. You can also purchase a family plan from the marketplace.
What perks can I get through my health insurance?
Your health plan may offer benefits you don’t know about…but should. Some will subsidize your gym membership; others have a medical hotline you can call 24/7.
Does my Medical / Health Plan cover vision insurance?
Most medical plans don’t cover prescription glasses and contacts. For that, you’ll need to supplement your plan with vision insurance. Even if you have great vision, an annual eye exam can catch early signs of general health problems.
When can I change my health plan outside open enrollment?
Open enrollment is the annual window when you can make changes to your plan or choose a new one. But some special circumstances ― called qualifying life events ― allow you to make changes outside that window.TIPS on choosing a plan?
How do you like to work with your doctor?
With some plans, you’ll choose a doctor to work with and help manage your care. That’s called a Primary Care Physician (PCP). If you need to see a specialist, you’ll often need a referral from your PCP. With other plans, you can go directly to a provider in your network to make appointments but carry more expensive premium.
Where do you want to get your care?
Depending on the type of health insurance you choose, you’ll probably need to work within a network to get your care. Networks are the groups of doctors, clinics and hospitals your insurance covers. Meaning if you have preference for certain doctor, center, outpatient location, hospital, specialist, surgeon refer to plan network of providers.
What kind of coverage do you need for prescription medications?
Each plan has a list of medications that are covered. This is called the Prescription Drug List. If you have medications you take on a regular basis, check the list so you’ll know your costs and possible deductibles before you choose your plan.
What’s covered and what’s not?
Every plan has limitations. That means not everything will be covered. Take a look at each plan you’re considering so you know the costs, deductibles, copayments and overall benefits of the plan.
It’s important to know the limits of a plan before you choose. For example, elective, cosmetic or alternative therapies are common treatments that are not generally covered by health plans when they are not considered medically necessary.
Vision and dental services are covered under some plans. But you may need to buy an extra plan to cover these services.
ACA / ON EXCHANGE / OBAMACARE TIPS:
What are the metal tiers?
Remember earlier when we talked about how all health insurance plans split some of the costs between the insurer and the consumer? Metal tiers are a quick way to categorize plans based on what that split is.
Some people get confused because they think metal tiers describe the quality of the plan or the quality of the service they’ll receive, which isn’t true.
Here’s how health insurance plans roughly split the costs, organized by metal tier:
Bronze – 40% consumer / 60% insurer
Silver – 30% consumer / 70% insurer
Gold – 20% consumer / 80% insurer
Platinum – 10% consumer / 90% insurer
There’s a fifth category of health insurance plans that you may see on the marketplace, called “catastrophic” plans. Catastrophic plans have very high deductibles – often, the deductible is the same as the out-of-pocket max – which means they’re really only useful for preventing an accident or serious illness from causing you to go into severe debt.
Preventive care
All health insurance plans on government-run marketplaces offer a set of preventative health care services, such as shots and screening tests, at no cost to plan members (even if you haven’t hit your deductible). As of 2019, these are the 21 free preventive services, as outlined by Healthcare.gov:
Abdominal aortic aneurysm one-time screening
Alcohol misuse screening and counseling
Aspirin use to prevent cardiovascular disease
Blood pressure screening
Cholesterol screening
Colorectal cancer screening
Depression screening
Diabetes (Type 2) screening
Diet counseling
Falls prevention (for adults age 65 or older)
Hepatitis B screening
Hepatitis C screening
HIV screening
Immunization vaccines
Lung cancer screening
Obesity screening and counseling
Sexually transmitted infection prevention counseling
Statin preventive medication (for adults age 40 to 75 who are at high risk)
Syphilis screening
Tobacco use screening and cessation interventions
Tuberculosis screening (for certain adults at high risk)
How much should a health insurance plan cost?
Thanks to the Affordable Care Act, there are only five factors that go into setting your premium:
* Your age
* Your location
* Whether or not you use tobacco
* Individual v.s. a family plan
* Your plan category (Bronze, Silver, Gold, Platinum, or Catastrophic)
Health insurance companies are not allowed to take your gender or your current or past health history into account when setting your premium.