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 coverage varies in the type of plan and service model you choose
  • Private insurance companies can work with government programs such as Medicare to supplement your insurance needs
  • Consider using HSAs as a way to save for unexpected needs if you have a high-deductible health plan


When looking for health insurance, it pays to check around to see what is available. Whether you are an individual looking for initial coverage or a family that is not happy with your current coverage, you’ve come to the right place.

Compare health insurance rates now by entering your zip code in our FREE tool above!

We love helping consumers become more knowledgeable about the process or purchasing health insurance so that you can find the best deal for your specific coverage needs.

Learning the Terminology

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One of the problems you may run into when seeking healthcare is the confusing industry jargon and terminology. You may have heard your employer bring up HMOs, PPOs, deductibles, and more, and let’s be honest: most of us aren’t entirely sure what that even means when we’re trying to find a good health insurance policy.

Whether you’re securing health insurance on your own for the first time, or you’re returning to the system to find that everything has changed since you last bought coverage, this article will help you understand all the health insurance basics you need to know in order to choose the best policy for you.

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What is Obamacare?

First, let’s take a look at the Affordable Health Care Act, which most people refer to as “Obamacare”. This was a legislation that offered an alternative to standard health insurance for people who could not afford it on their own.

You can search Obamacare and locate your state in the searches, and you’ll come up with a site of information on Obamacare that is specific to your state.

Obamacare also covers the federal government regulation that requires all citizens of the United States to have health insurance coverage (as of 2015). Not having health insurance will result in a tax penalty when you file your return.

Why did the government do this?

Whether you agree with the Affordable Care Act or not, it did offer a solution for people who cannot afford private insurance plans. The problem with the ACA was that it seemed to strip consumers of their personal choice in the types of physicians they saw when they saw them, and how their health care was delivered.

Private Insurance and Medicare

Some people mistakenly believe that Medicare is an all-or-none situation. In other words, they think that insurance that is government-funded can have no part of private insurance coverage, but fortunately, that isn’t so.

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Do I qualify for Medicare?

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You qualify for Medicare once you reach your 65th birthday. This is a program that is free to all American citizens when they are of retirement age (65) and are in need of medical care. One other qualification is that you must have worked in a job that pays into the Medicare system for at least 10 years.

That being said, you are still free to look beyond the Medicare system to get supplemental help. In fact, this is highly recommended in certain situations. Medicare does have a limit.

One of these limits has to do with prescription drug coverage. Once you reach a certain amount of expenses—around $3,310 in most cases—of Medicare will not cover this for the time that you are in the “donut hole” or “gap in coverage.”

How Private Insurers Help

During the Medicare “donut hole” period, you will probably still need help paying for your prescriptions. That’s why you need an independent provider who can kick in with help for the high cost of prescriptions while you work out of the gap period.

This is just one real example of how private insurance companies work with Medicare to attempt to leverage the benefits you can obtain from your health insurance.

About HSA Plans

You may have heard about HSAs as well. These are nothing more than health savings accounts that you are locked into during a particular period. You choose the amount you want to contribute each year, and it is automatically deducted from your paycheck if you are a contracted employee.

The purpose of HSAs is to offset the cost of prescription drugs, as well as any other unexpected out-of-pocket medical expenses, dental, vision, and other needs.

In most cases, you are even allowed to withdraw from your HSA for any non-medical reason with a penalty. Keep in mind that the HSAs do not take a “use it or lose it” approach. This means that you could continue to contribute to them up until your 65th birthday when you become eligible for Medicare.

Once you are 65, you may want to use the money you have saved in your HSA to supplement your Medicare program while you are in the gap for prescriptions, if you reach that period. You are allowed to withdraw what you need once you are 65, but you will not be allowed to further contribute to it.

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HSA Contribution Limits

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In 2015, HSA contribution limits were at $3,350 for individuals with high-deductible health insurance plans and $6,650 for family HDHP coverage, according to the IRS. You should keep up with the current laws to see what the limits are at the time you decide to invest in an HSA.

Supplemental Insurance

Since you just don’t know what lies ahead in the future for you regarding your health or the health of your family, it is wise to look into private insurance options now. Private insurance can work with Medicare to give you that extra assurance that you will have help to pay out-of-pocket costs and prescriptions when the going gets tough.

Medical expenses are skyrocketing now more than ever. CNBC reports that unexpected medical and health expenses are the biggest cause of bankruptcies in the United States. This is alarming and reminds us of just how expensive medical care, procedures, and tests can be.

Example of Medical Expenses

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Just one heart test for a Holter monitor costs about $700 without insurance. This sort of out-of-pocket expense is hard to handle.

So getting a private insurance company to help you handle your medical expenses is one of the best moves you can make toward controlling your finances.

Even those who are well-off financially can experience difficulty meeting payments if their health care requires frequent doctor’s visits and medications.

 

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Reasons to Have Private Medical Insurance

Here are some of the reasons to have private medical coverage.

  • Most private health insurance companies work with Medicare and other government programs.
  • You can use private insurance to get you through the Medicare gap periods.
  • You have more choice in who your doctors are and how your services are delivered.
  • You will meet the requirement for health insurance and avoid paying fees at tax time.
  • You can get supplemental insurance for specific illnesses, such as critical illness and cancer for extra protection.
  • It gives you added security.

Shop and Compare

By shopping around for other supplemental insurance plans or even an entire healthcare plan that are in the private sector, you are more likely to be able to maintain control over your health expenses.

Also, such companies have skilled agents who can walk you through the benefits of different types of plans to help you achieve your goals in securing the best health plan you need.

What are my choices in service delivery?

You can choose from PPOs, HMOs, EPOs, or POS systems when you choose your health care insurance. This allows you to decide whether you want to use one of the doctors within your network (such as with HMOs or EPOs) or whether you want a more flexible system that allows you to go outside the network (as with PPOs and EPOs).

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What about PPOs?

PPOs (Preferred Provider Organization) systems are a good choice for most people because they allow you to either stay within the network with the provided caregivers or go outside the network. Granted, you may have to pay more for the physicians outside the network, but when the choice is important, it may be worth it.

Shop and Compare for Best Deals

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The best step you can take toward controlling and securing your health insurance plan is to shop and compare what is offered by the different companies and service models. Then decide if it will benefit you with your special circumstances.

A Word About High Deductible Insurance

Some people are rarely sick and only need a doctor once in awhile. For these people, they are probably better with a high-deductible plan such as an HMO that offers a co-pay for general office visits and helps with prescription drugs. But they require you to stay with your primary care physician, so keep this in mind.

Ask questions when you get a quote until you are satisfied that the plan you have chosen is the one you need to keep you feeling secure regarding your health care.

Ask about special rates for adding more people to your policy and how the plan you choose will complement Medicare, if you qualify.

Enter your zip code in our FREE tool below to compare health insurance rates now!

We hope this information is valuable to you. Remember, you cannot afford to skip having insurance. The cost is just too devastating. Instead, choose a good private health insurance plan that will kick in when the government plan kicks out.