Health insurance has been a hot topic in America for the last 10+ years. And while it's readily debated, the basics can often be overlooked in terms of what health insurance actually is, how it works, and what options are available. To educate our community better, we wanted to provide a crash course for those looking to learn more about it. The best way to get started is to review some of the common terms. Let's dive in.
Health Insurance Terminology
Premium: This is what you pay monthly for health insurance. This payment gives you access to the plan, whereby you are able to get the benefits of the specific policy. You will pay this premium regardless of whether you need care or not.
Deductible: The deductible is an amount you must pay before the insurance company will start paying. For example, if your deductible is $5,000, then you will have to pay all medical bills for that year until you've paid $5,000. Once you have paid $5,000, then the insurance company will start to pay. It's important to understand the deductible as you WILL have to pay up to this amount if faced with significant medical bills.
Co-Insurance: Once the deductible is reached, co-insurance will kick in. Co-insurance means you AND the insurance company will share the bills. So if you have a 70-30 co-insurance, the insurance company would pay 70% of the bill and you would pay 30%. I'll reiterate, this co-insurance occurs AFTER you've reached your deductible. The insurance company will only start sharing these bills till you've reached the deductible.
Out-Of-Pocket Maximum: This is the amount you will never pay more than for bills. You can exceed your deductible, you can continue paying with the co-insurance, but once your total amount paid reaches this out-of-pocket maximum, the insurance company will cover 100%. So if your out-of-pocket maximum is $10,000 and you had a bill of $200,000, then you'd pay $10,000 and your insurance company would pay $190,000.
Copay: Your health plan might provide a special rate for certain visits. Typically a copay would be a set amount for office visits, going to the ER, etc. As an example, you might have a copay of $35 for an office visit. So if you went to the doctor for a cold, you'd pay this rate.
Preventative Care: Most health insurance plans provide preventative care for free. This means you can visit a doctor for preventative services for free, without having to pay a copay. This is offered to encourage good health practices and to catch things before they get more serious. This benefits your health while also protecting your insurance provider. If they can prevent a serious issue early, they won't have to cover a serious bill later on, down the road. Some examples of preventative care include diabetes screening, mammograms, cholesterol tests, etc. Check with your plan to see what's specifically covered.
The Different Types of Health Insurance Plans
Health insurance is quite broad, as there are a variety of ages and needs across our country. To accommodative this complexity, there are many different types of plans that people can leverage for getting appropriate health coverage. You can review some of the options you might have below:
Employer-Sponsored -- These plans are accessed by virtue of employment. Employers can, and might even be required in certain circumstances, to offer health insurance to their employees. Your employer would share in paying some of the premium so it's typically a great, affordable option.
Individual and Family -- Also known as the Affordable Care Act (ACA), Obamacare, and The Marketplace. Individual and family plans are accessed directly by those needing coverage. Enrollment can be done through the government or a local broker like us! These plans are heavily subsidized by the government, and you can even find plans with $0 premium.
Medicaid -- This is government-provided healthcare for those most in need.
Medicare -- Designed for those who are 65 and over, Medicare offers a more specialized coverage for seniors with different needs than the average person. Don't let the uniqueness of Medicare fool you, though. It has the most variety and options in plans to accommodate the various health issues seniors are concerned about.
Short-Term -- Depending on your current situation, you might need a short-term plan. This is commonly sought after by those who are in transition, such as those who recently left or were laid off from their job. It could include COBRA, which allows you to maintain your previous employers health plan, or possibly an entirely new policy.
Dental -- Most health insurance plans don't include dental. In order to get coverage for teeth cleanings, crowns, or other dental needs, you'll need to get a supplemental policy for dental coverage.
Vision -- Similar to dental, health plans don't typically offer vision benefits. For getting assistance on bills relating to your vision, a supplemental vision plan will be needed.
The Two Main Styles of Health Insurance
Major medical insurance falls under one of two main categories: HMO and PPO. These are terms you've likely heard before when looking at plans and/or talking with people about health insurance. A Health Maintenance Organization (HMO) plan works through a primary care physician. It offers low premiums and copays. The main downfall is you would need to go through your primary care doctor to get a referral for seeing a specialist. Also, most HMO plans do not cover costs if you go outside your network.
On the other side, a Preferred Provider Organization (PPO), allows you to access a large network of providers. You can easily see doctors and specialists directly, without going through a single point of contact, like with the HMO. The downside of a PPO is you would likely see higher premiums and copays because of the afforded flexibility.
How to Get Health Insurance
As a local health insurance agency, we are uniquely equipped to help you get the coverage that's best suited for your needs. We work with you to learn about your situation and possible health concerns, and then share available options. We are also happy to answer any questions and educate you on the various aspects of health insurance. If you are looking for a free consultation to discuss your options, please give us a call or submit your information on our website. We look forward to speaking with you!
LeRoy Wilkerson Broker/Agent