Chelsey Tucker graduated with a Bachelor of History degree from Metropolitan State University in 2019. She now writes about insurance with her specialty being life insurance and has been quoted on Help Smart Phone and MEL Magazine.

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years. He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com.

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Mar 19, 2020

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The lowdown...

  • Health insurance adds important financial protection against medical expenses
  • Health insurance provides regular medical care needed for good health
  • Health insurance provides early detection and disease prevention services at no extra cost
  • The Affordable Care Act requires health insurance coverage

Health insurance is important to individuals and families. It is a key to maintaining good health and wellness. Statistics repeatedly show that regular medical care makes a positive difference in personal health.

Health insurance is important for financial protection. It protects against unexpected health issues and costs.

Comparison shopping is a great way to find the best values in health insurance. Enter your zip code above to begin.

Qualified Health Insurance

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The Affordable Care Act requires health insurance coverage that meets the standards of the law.

The coverage must have the ten essential health benefits, free prevention and wellness provisions, and an actuarial value in which insurance pays at least 60 percent of the costs of covered benefits.

Qualified health insurance consists of the following items:

  • Minimum actuarial value of 60 percent or more. The Obamacare Bronze Plan meets this requirement.
  • Minimum essential coverage that includes essential health benefits.
  • Limits on expenses and deductibles.

The rules of the Affordable Care Act require that the maximum costs of individual and family coverage not exceed eight percent of the annual family income. Employer-sponsored coverage may not exceed nine and one-half percent of family income.

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The Individual Mandate

The individual mandate is the driver that makes having qualified insurance a wise choice. Those that fail or refuse will have to pay the individual shared responsibility penalty for the entire family.

The money spent to pay the penalty does not provide insurance protection, and while it does satisfy the legal requirement, it does not advance the individual or family situation towards improved health security.

The Open Enrollment Period

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The Open Enrollment Period is the time when every eligible person can purchase qualified health insurance and receive subsidies. The financial assistance can only come through the federal Marketplace or the state exchanges.

Open enrollment 2017 began on November 1, 2016, and ended on January 31, 2017. The key elements of the open enrollment are as stated in the below-listed items.

  • Guaranteed acceptance with financial eligibility
  • Marketplace premium tax subsidies
  • Marketplace cost-sharing reduction programs

The Marketplace Subsidies

Premium tax credits use the second lowest silver plan as a benchmark. If the costs of insurance exceed this price, then the applicant can get financial assistance.

The premium tax credits cap the costs of premiums at between two and nine and one-half percent of annual family income.

Silver plan holders that earn less than 250 percent of the federal poverty level can get Costs sharing reduction assistance. These will reduce copays, coinsurance, lower the deductible threshold, and the overall limit for out-of-pocket expenses.

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Guaranteed Acceptance

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The Affordable Care Act does not permit insurers to use individual characteristics and histories to set prices. The law requires a type of community rating wherein all members of the population would get the same rate.

The law allows three exceptions to strict community rating.

  • Age is a permitted factor but it is limited. The oldest members of a group cannot pay more than three times the rates charged to the youngest members.
  • Location is a factor that can raise the prices of medical care. Some locations do not have representative levels of service nor sufficient competition
  • Tobacco usage is a factor in setting prices because the policy of the law is to promote cessation. Successful cessation can then reduce rates for tobacco users.

Medicaid and the CHIP

Medicaid and the Children’s Health Insurance Program are Other forms of important health insurance coverage. These programs use the annual family income to determine eligibility. They are each qualified health insurance.

One protects individuals and families, and the other protects minors. The importance of health insurance goes to maintaining good health and avoiding the severe diseases that could be detected and treated in its early stages.

Health Insurance and the Nation

The drumbeat for national health insurance was, in part, from individuals that wanted but could not get coverage. The other catalyst was that the nation had an enormous health bill, with little to show for the massive spending.

There was no cohesive plan for reducing it, and no firm expectation that the wonderful medical arsenal of new discoveries could ever reverse the slide towards poorer national health and higher national health costs.

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Adding Important Financial Security

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The bronze plan on the Marketplace has high deductibles and low premiums. The average customer picks it to save money on premiums.

They have little hope of reaching the limits on expenses that would trigger 100 percent insurance coverage. In this situation, the policy provides important financial security.

In the event of an illness that requires medical care that costs more than about $7,500.00, then the policyholder would have protection. One must consider that even a simple surgery like an appendectomy can cost more than $50,000.00.

A single event can leave a mountain of medical debt to someone with no or insufficient insurance.

Guaranteed Acceptance without Medical Underwriting

In the decades before the passage of the Affordable Care Act, the constant concern for applicants was medical underwriting.

Medical underwriting is an investigation of the applicant’s medical history and current circumstances to detect risks that could interfere with insurance company profits. Medigap is a good example.

Most people were rated for higher insurance rates than the lowest rates offered to the young and healthy applicants.

Medical underwriting refuses some applicants and charges others far more for things beyond their control. For example, women paid more if they could have children, or if they had had children, or if they had had caesarean sections.

With no comparable charge for the male partners of conception, this stood out as gender bias.

Employer-Sponsored Health Insurance

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Employers provide health insurance and sometimes add payment arrangements to help employees pay out-of-pocket costs.

It is important to note that those with offers of coverage from an employer-sponsored plan cannot use the benefits on the Obamacare Marketplace.

This rule covers the employee and any spouse or dependents that eligible for coverage the employer’s offer of health insurance.

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Status Changes Matter

The ways of life in the US require flexibility on the subject of health insurance to the extent that it is tied to personal status, those status elements can change. People get married, divorced, have children, and relocate.

These changes of status require new opportunities to get insured and to find responsive coverage for the individual or family situation. The special enrollment period fills the need for those that have a qualifying event.

Health Insurance Pays Expenses

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The hidden features of the Affordable Care Act include those that add resources to the equation of deductibles and out-of-pocket expenses. The High Deductible Health Plans designated for Health Savings Accounts provide an excellent example.

Using pre-tax dollars, policyholders can put funds into an account to pay medical expenses. The unused funds can roll over to the next insurance cycle. The funds can build and become a significant financial asset.

Further, by using pre-tax dollars, the policyholder reduces taxes due for each year they use the Health Savings Account.

Health Insurance Coverage is Important

Health insurance is a vital concern today. The wonders of modern medicine come at a steep price. The costs of small procedures or short hospitalization can easily exceed the typical savings on hand of most individuals and families.

Comparison shopping is the proven method for finding the best values and most responsive health insurance coverage. Compare rates today by using our free rate tool below.