Health insurance is typically available through group insurance or private insurance. Senior Citizens can receive health insurance assistance through Medicare while low income individuals and families may qualify for health care insurance through Medicaid. Health insurance is usually available with different levels of coverage options, ranging from low cost catastrophic to high cost full coverage, depending on your anticipated needs. Enter your zip code above to compare free health insurance quotes online!
Determining Health Insurance Coverage
Since injury and health are unpredictable events, it is difficult to know if you have sufficient health insurance coverage. However, you can use your health history and lifestyle habits as a past performance indicator to determine your future needs. If you frequent the doctor’s office with every runny nose or have a chronic condition that requires routine visits, then you probably want to find insurance that covers office visits.
If you have been to the doctor twice in 20 years you may decide to chance catastrophic only insurance. Likewise, if you live a life of adventure and are an adrenaline chaser, then you may need insurance that covers trips to the Emergency Room as well as the doctor’s office!
Premiums and benefits vary with each plan, typically with more benefits resulting in higher premiums. This is where knowing your lifestyle and health history can help reduce the cost of your insurance plan. The more coverage you can afford, the better the plan you can have, but you at least need to be sure your basic minimum needs are covered.
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Types of Health Insurance
The type of network you belong to can affect your premium. While the level of care you receive should not be affected by the network, the flexibility and convenience may be. If you have a choice between an HMO, a PPO, a POS, an HSA, an HRA, a FSA, or a MSA, it is important to understand the fundamental differences before you select your plan.
An HMO (Health Maintenance Organization) operates with a primary care physician as your first point of contact for all of your health care needs. Anytime you need to see a doctor, you must first visit your primary care physician, who will then provide you with a referral for a specialist if needed. HMOs are typically lower in premiums than other plans; but, the network may be somewhat limited because some doctors simply do not participate in HMO plans. However, there are no deductibles and the co-payments are reasonable.
A PPO (Preferred Provider Organization) plan usually has a substantial network of participating doctors and hospitals. There are no restrictions as to who your primary care doctor is (within the network) and you never need a referral to see a specialist. Staying within the network provides you the most financial benefit, although you can receive some financial assistance for out of network costs as well. PPO’s generally involve deductibles, co-payments, and out of pocket limits.
POS (Point of Service) plans combine the best of HMO’s and PPO’s by providing you with a decent network from which to choose your primary care provider. Provided you stay in the network, there are no deductibles and the co-payments are nominal. Going out of the network, however, can be very disadvantageous with higher co-payments and deductibles.
A non traditional approach to insurance includes the HSA (Health Savings Account), HRA (Health Reimbursement Arrangement), FSA (Health Flexible Spending Arrangement), and MSA (Medical Savings Account) plans. These accounts vary from each other to some degrees, but they operate on the same basic premise. Either you and/or your employer put money aside in a savings account that is usually tax exempt for medical care expenses. The money can be used to pay for doctor’s visits, medical treatments, prescription drugs, and even some over the counter medications. There is a lot of flexibility as to how the money is used to pay for your health care and with some plans if the money does not get spent it remains in your account for future use.
The HSA requires a high deductible plan but it has the most flexibility. Both employers and employees can contribute to a HSA with no limitations to your tax-free annual contribution and the funds stay with you. If you want to use the money for non-medical expenses, you can do so provided you pay income tax on it. An HRA is funded strictly by an employer so there is no portability on the account. The employer has no annual contribution limits and is in control of the rollover rules. FSAs are employee funded with pre-tax dollars and can also be funded by the employer, but if the funds are not used prior to March 15th of the following year, the money is not refundable and it remains with the employer. The funds cannot be ported nor can they ever be used for non-medical expenses. The MSA is similar to an HSA for self-employed individuals.
Health Insurance Cost Breakdown
Premiums are the amount you pay for your insurance coverage and are usually paid on a monthly basis. Premiums are never returned to you, even if you never use your insurance. A deductible is the amount of money you have to pay to your health care provider before the insurance company begins to pay their portion of the medical bills.
Deductibles are sometimes confused with out of pocket costs because, technically, a deductible is out of pocket. However, whereas a deductible refers to the amount you have to pay each year before your insurance pays their portion (for example, 80%) the out of pocket is how much you will spend before the insurance pays the entire amount (100%) of the bill.
For the most part, deductibles and out of pocket expenses start anew each year no matter how much you paid out of pocket previously. Therefore, if you have a deductible of $2,000 and you spend $1,500 this year, when the new insurance year starts over again, your deductible will be reset to $0 and you will have to once again pay $2,000 toward your deductible. The $1,500 you spent the previous year does not roll over. There are some plans, however, that allow you to apply your paid deductible amount towards the deductible for the first three months (the first quarter) of the new insurance year.
Co-pays, or co-payments, are also knows as co-insurance and they represent your share of a particular visit or service. For example, if your co-pay is $10 for doctor’s visits, then you must pay $10 for every doctor’s visit and the insurance will pay the balance, provided the service is covered on your plan. Co-pays are not affected by deductibles nor do they get applied toward them.
Your maximum lifetime benefit is the most your insurance company will pay out in total for your health insurance. If you have a maximum lifetime benefit of one million dollars, then once the insurance company has paid out one million dollars for your benefits, they will no longer honor any more claims.
The health insurance plan available for you depends largely on your employment status. If you are employed with a larger business you most likely qualify for group health insurance through your employer. You are not required to participate in group health insurance, but it can be more affordable then private health insurance.
If you are self employed of unemployed you can purchase private health insurance, especially for those with the most health issues. Healthier participants end up pay the price to cover others in the risk pool. Senior citizens can receive financial assistance with health care through Medicare and low income individuals and families may qualify for health insurance through Medicaid.
As with any insurance plan, if you have a specific doctor that you want to keep as your primary physician, make sure he or she is in the network you are considering. Be sure to inform your doctor if there are any changes to your insurance and ask your insurance provider if you have any questions regarding coverage.
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