Do you need to buy health insurance, but you aren’t sure where to start? There are positive and negative aspects to each health insurance plan that appeal to different people based on their specific needs. Finding the right individual health insurance plan depends on many different factors, including your age, income, health, geography, and employment status.
At HealthMarkets, we can help you weigh the pros and cons of each health insurance plan. HealthMarkets offers plans from more than 180 insurance companies across the United States. HealthMarkets licensed agents are local and dedicated to helping you find the best health insurance plan based on your unique financial and health needs at no additional cost to you. Contact us today by getting a quote online, finding an agent, or calling (800) 827-9990.
Health insurance is a contract between yourself and an insurance company. In exchange for regular payments (premiums), the health insurance company agrees to help you pay for medical and surgical expenses.
The way that insurance companies pay for these medical expenses varies and often depends on the type of health insurance plan. For example, the insured (the owner of the health insurance policy or the person with the health insurance coverage) could pay medical costs out of pocket and then be reimbursed for covered services up to a certain amount. Or, the insurance company could agree to pay a certain amount of covered expenses up front to the provider.
Health insurance is also a requirement under the ACA (with a penalty for not being insured). Unless you qualify for an exemption, unforeseen medical expenses are not the only things that may affect your wallet.
What Are the Different Types of Health Insurance Plans?
The most common types of major health insurance plans include: Health Maintenance Organizations (HMOs), Preferred Provider Organizations (PPOs), Point of Service Plans (POS), and High-Deductible Health Plans (HDHPs) with or without Health Savings Accounts (HSAs). Each plan is outlined below:
Health Maintenance Organizations (HMOs):
Policyholders receive care from a specified network of doctors, hospitals, and healthcare providers
You must receive care within your network, giving you the least freedom of other plans
You pay the full price out of pocket from care received from an out-of-network provider
A primary care physician coordinates your care and refers you to specialists when necessary. These referrals are required by most HMOs, except in the event of an emergency or routine in-network visits to a gynecologist or obstetrician.
Preferred Provider Organizations (PPOs):
You have the flexibility to see any doctor or provider you choose
PPOs still have a network of doctors who charge less for plan members
Visiting an out-of-network provider usually costs more than staying in-network
Referrals to specialists are not required
Point of Service Plans (POS):
A mix between an HMO- and PPO-style health insurance policy
You have more choices than with an HMO
You may need to select a primary care provider and receive a referral to see a specialist
You have the choice to use doctors, hospitals, and other providers that are not in your health plan's network
You will have to pay more for using out-of-network providers
High-Deductible Health Plans (HDHPs):
Has a higher deductible than most health plans (the annual amount you are responsible for before your health plan pays its part for healthcare services), but it also has a lower monthly premium (the amount you pay every month for your health plan)
You generally pay less each month, but when you need health care, you pay more out of pocket before you get help covering your medical costs from the insurance company
These follow the HMO, PPO, or POS model
HDHPs can be paired with Health Savings Accounts (HSAs). HSAs allow you to save money tax free for use on qualified medical expenses.
Once you determine how a health insurance plan fits your lifestyle, you can decide the level of coverage you need. The level of coverage is organized by the level of benefits each plan offers:
Percentage of medical costs covered (average)
Why Do I Need Health Insurance?
No one should go without some form of health insurance as even the most normal, everyday activities can expose you to illness or injury. Think of health insurance as you would homeowner's or car insurance: you never know when an accident will happen, so it’s a good idea to be prepared for the unexpected.
For instance, the average cost of a three-day hospital stay is around $30,000. Health insurance prevents you from having to pay high medical costs yourself, which could force you into financial debt or even bankruptcy.
Additionally, health problems or diseases could go undetected without the primary or preventive care offered by health insurance (e.g., vaccinations, cancer screenings, mammograms). Health insurance allows you to take a proactive approach to your health, acknowledging the risks you face and developing a clear plan for future wellness.
Am I Required to Have Health Insurance?
In short, yes (unless you qualify for an exemption). Under the Affordable Care Act, individuals that are not covered by a public insurance program (e.g., Medicare, Medicaid, Tricare) or an employer-sponsored health insurance plan are required to obtain a private insurance policy. If affordable health insurance coverage is not available to an individual, or they are a member of a recognized religious sect, that individual will be eligible for an exemption by the Internal Revenue Service (IRS). The Affordable Care Act includes subsidies to enable individuals with low incomes to comply with the law.
The Affordable Care Act also mandates that if an individual fails to secure health insurance coverage, they will face a penalty. In 2016, individuals will be required to pay a $625 tax, or 2.5 percent of their annual income, whichever is greater.
The act also requires that health insurance policies include a comprehensive package of items and services, known as essential health benefits. Essential health benefits must include items and services within at least the following 10 categories:
Ambulatory patient services
Maternity and newborn care
Mental health and substance use disorder services, including behavioral health treatment
Rehabilitative and habilitative services and devices
Preventative and wellness services and chronic disease management
Pediatric services, including oral and vision care
Benefits of the Affordable Care Act:
While most Americans understand the importance of health insurance, there are still many that go without it. In April 2015, Gallup reported that 11.9% of American adults are uninsured. The good news? This is the lowest percentage since they began tracking the uninsured rate in 2008.
The rate of uninsured American adults has dropped significantly since the provision requiring most Americans to carry health insurance was passed as part of the Affordable Care Act in 2014. The Affordable Care Act (also referred to as Obamacare) was signed by President Barack Obama in March 2010 and intends to “make healthcare more affordable, accessible and of a higher quality, for families, seniors, businesses, and taxpayers alike. This includes previously uninsured Americans, and Americans who had insurance that didn’t provide them adequate coverage and security.”
How Do I Know What Health Insurance Plan is Right For Me?
Are you buying individual health insurance?
Understand your needs. Any plan you purchase will cover “essential health benefits,” but some services or office visits may not be covered. Think about how many doctor visits you have each year, whether you’ll need surgery or major procedures in the future, and whether you currently take or will need to take prescription medications.
Compare the market. The health insurance world can be complex. HealthMarkets can help you easily compare health insurance plans and rates to simplify your decisions.
Are you 25 or younger?
Find out if you’re eligible to stay on your parent’s plan. The Affordable Care Act allows individuals under the age of 26 to maintain coverage through their parent’s health insurance plan, even if they are no longer in school, do not live with their parents, and get married.
Check your eligibility if your parents are retired. Retiree-only health insurance plans aren’t required to cover children under 26, so confirm with your parent’s plan whether you are eligible for coverage.
Have you lost your job?
Sign up for COBRA. If you were terminated by an organization with 20 or more full-time employees that offered health insurance, COBRA enables you and your dependents to stay on the company’s health plan for up to 18 months after being terminated.
Consider buying individual health insurance. HealthMarkets has thousands of licensed agents across the United States dedicated to helping you find inexpensive health insurance. Contact us today by getting a quote online, finding an agent, or calling (800) 827-9990.
How Much is Health Insurance Going to Cost?
According to a CNBC report from May 2015, 45 percent of surveyed consumers did not know what their healthcare costs would be in 2015, and 67 percent lacked confidence that they were paying a justified amount when purchasing health care.
It is critical that you fully understand how much you will be paying for your health insurance plan and the extent of services and coverage provided. When you are shopping for a policy, look beyond the premium cost and consider other fees you may face, such as the cost percentage of doctor visits. Also make sure you understand your plan’s out-of-pocket maximum for the year, since certain expenses may not count toward that total.
The cost of your health insurance plan will vary depending on the type of plan you select, how often you require care, and the type of services needed. Here are three ways you pay for health insurance:
Premium: what you pay your insurance company each month for coverage. The amount depends on the health plan you select. Multiply your premium amount by 12 to calculate the yearly cost of your plan.
Deductible: a set amount that you must pay before your insurance company helps to pay toward your care. Deductibles could be $500, $1,000, or more.
Out-Of-Pocket Costs in Copayments or Coinsurance: plan costs depend on the number of doctor visits, frequency of prescription refills, and other types of medical services. Copays are a flat fee (e.g., $20 to visit a doctor’s office). Coinsurance is a percentage of costs (e.g., 25 percent of the cost of a prescription drug).
Ready to Buy a Health Insurance Plan?
Give us a call today at (800) 827-9990 or get a quote online to see how HealthMarkets can help get you covered.
---------- Sources: "Group Coverage Options | Affordable Care Act Health ..." 2011. "4 Types of Health Plans: How They Compare.” WebMD. 14 Aug. 2015. "2014 Publication 502 - IRS.gov." 2010. "Health coverage protects you from high medical costs ..." 2014. “2015 health coverage exemptions, forms & how to apply.” Healthcare.gov. 2015. “If you don’t have health insurance: how much you’ll pay.” Healthcare.gov. 2015. "Essential Health Benefits | HealthCare.gov." 2013. "Key Features of the Affordable Care Act | HHS.gov." 2015. "Health Insurance Coverage For Children and Young Adults ..." 2014. "Health Reform: How Much Will You Pay? - WebMD." 2013.
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