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How to Get Health Insurance
How it works, why you need it, and five ways you can get it.
You want health insurance. The law says you need health insurance. But how do you get health insurance?
There are essentially five ways to get health insurance.
- You are free to purchase health insurance on your own through a public or private marketplace.
- You can use a health insurance agent to help you find insurance. You can receive benefits through a company plan if you work for an employer who offershealth insurance.
- You can purchase health insurance directly from an insurance company.
- You can receive government-funded health insurance if you meet certain qualifications.
With each avenue comes its own set of options for healthcare plans. Insurance is not something that should be bought on a whim, as the coverage and costs of each plan can have serious implications on the health of both you and your bank account.
With that in mind, it’s important to learn about all of your options for acquiring health insurance—as well as the details of what different types of plans can offer you. Let’s first break down the five ways of acquiring health insurance before diving into how different plans work and the features of each.
Getting Insurance Coverage Through a Marketplace
The marketplace is exactly as it sounds—an open marketplace where health insurance companies sell plans to people just like you. As in any type of marketplace, you’ll find all sorts of different health insurance plans offering various benefits within a wide range of costs.
But unlike your local grocery marketplace, the health insurance marketplace is only open during select times of the year. Each Fall features an open enrollment period where customers are free to purchase new plans or make changes to their current plan.
For example, the open enrollment period to acquire coverage for the 2016 calendar year runs from Nov. 1, 2015 to Jan. 31, 2016. Special enrollment periods are available throughout the year for people who experience “qualifying life events” and suddenly find themselves in need of health insurance. These qualifying life events include getting married, having a baby, moving to a new state, losing a job, and so forth.
To use a marketplace, just browse available plans in your area to compare prices and coverage. Plans can be purchased directly online, making it easier than ever to get health insurance.
Getting Health Insurance Through Agents
The American health care system can be complex, and many consumers need a little help navigating through it all. After all, that is why you’re here in the first place, right?
That’s what health insurance agents are for. HealthMarkets agents are licensed to sell health insurance. They can help you choose a plan that meets your health and financial needs, and they cost you nothing at all. They actually may save you money!
How do agents cost you nothing? Agent are paid commissions by insurance companies to sell their products. This commission doesn’t increase anything when it comes to what you pay for your health insurance. In fact, the ACA requires the same policy to cost the same amount in premiums and out-of-pocket expenses no matter where you purchase it from. So, think of agents as free advisors.
How can they save you money? Agents can help you narrow down your available plans based on premiums and out-of-pocket expenses (like deductibles). They can even help you find plans that cover your drug formularies! Because they can offer comprehensive advice, you are more likely to find a plan that’s less expensive for your needs in the long run. Plus, they don’t just disappear after you’ve purchased a plan. You can continue to ask your agent questions concerning your policy.
What Makes HealthMarkets Different?
HealthMarkets is unique in that we’re a marketplace that features our very own independent, licensed agents. When you shop for insurance plans with us, there are over 3,000 licensed agents to assist you in your search and help you enroll in the best plan for you.
Getting Health Insurance Through An Employer
Many workers get their health insurance through their employers, and that number should only increase following the passing of the Affordable Care Act. The employer mandate provision of the Affordable Care Act—or more commonly referred to as “Obamacare”—mandates that by 2016, companies with at least 50 full-time employees must offer health insurance benefits to at least 95 percent of their workers and their dependents up to age 26 or else face a penalty.
As of 2013, 49.9 percent of all private sector establishments offered health insurance to their employees. This figure ranged as high as 83.6 percent in Hawaii and as low as 38.2 percent in Montana.
During the infant stages of the law in 2015, the impact of the employer mandate had yet to fully be seen.
Purchasing Health Insurance from an Insurance Company
If you know exactly what kind of health insurance plan you want and how much you can expect to pay for it, you can cut out the middleman and purchase insurance directly from a provider. Because not all insurance companies participate in the marketplace, this can be the preferred route for someone wanting insurance from a specific company or a specific plan not offered in the marketplace. However, bypassing an insurance agent may not save you money, especially since they provide comprehensive advice that accounts for both your coverage and budgetary needs.
Getting Government-administered Health Insurance: Medicaid and Medicare
The two most common types of government health care are Medicaid and Medicare.
For those who do not have access to employer-sponsored health insurance and would have trouble affording health insurance purchased on their own, there is an option also provided by state and federal governments called Medicaid.
On the other hand, when an individual turns 65 or has a particular disability, they become eligible to participate in Medicare.
Medicaid offers free or low-cost healthcare benefits to people of low income. Beneficiaries typically include the elderly, disabled persons, children, pregnant women, and coverage is extended to adults who earn a certain percentage of the Federal Poverty Level.
The federal government has established guidelines for providing Medicaid benefits, but coverage is ultimately decided on a state-by-state basis. To find out if you’re eligible for Medicaid, check with your state’s guidelines for enrollment.
Medicare is a federally-administered healthcare program for people over the age of 65 or anyone with certain disabilities. Each “Part” of Medicare covers a range of medical services for the beneficiary. Read here to learn a bit about the four main parts of Medicare: A, B, C, and D.
Medicare also has separate “Plans” often called “Medigap Plans”. These plans are designed to support the coverage provided by Medicare Parts A and B, filling in gaps left in coverage. For a comprehensive explanation, please visit HealthMarkets’ Guide to Medicare.
HealthMarkets can provide a free, no-obligation evaluation of your Medicare options.
There are additional health insurance options for children and youth with disabilities. These include Children and Youth with Special Health Care Needs (CYSHCN) and Children’s Health Insurance Program (CHIP).
Different Types of Plans
Before you start shopping for health insurance, you need to know exactly what you’re actually looking for. Not all insurance plans are alike, and the best kind of plan for one person may not be the best type of plan for another. Let’s go over the most common types of health insurance plans.
- HMO. With a Health Maintenance Organization plan, you’ll select a Primary Care Physician (PCP) who will make any necessary referrals to specialists within your plan’s network. Coverage outside of your network will be minimal if at all.
- PPO. A Preferred Provider Organization policy differs from an HMO in that you will not have a Primary Care Physician and will have more freedom to see specialists outside of your given network, albeit at a greater cost.
- POS. A Point Of Service plan combines some of the features of an HMO and a PPO. Like an HMO, POS insurance usually involves a Primary Care Physician along with a selected network. But like a PPO, a POS plan allows for greater flexibility outside of the network.
- HDHP. A High Deductible Health Plan features low monthly payments with a high deductible. These are a common type of employer-sponsored plans because of the low monthly cost to the company.
Short-Term Health Insurance
Life has a way of throwing you some curve balls. For a period of time, you may find yourself without any health insurance. Short-term, or temporary, insurance is a way to fill that gap until you can get back on a long-term health insurance plan.
Short-term health insurance can last up to 12 months, and coverage can begin in as little as one day. This type of insurance is useful for people who are between jobs (and therefore between employer-funded health insurance), are waiting for Medicare or eligibility for other government assistance, or who are traveling for an extended period of time outside of their network coverage area.
Because short-term plans are not ACA compliant, temporary health insurance does not count as an exemption to the tax penalty for not having insurance (see consequences section below).
There are likely to be some things that are not fully covered by your health insurance plan that you would like to receive coverage for. Supplemental, or “secondary,” insurance can help fill the gaps.
Secondary health insurance is popular among those who wish to supplement their health plan with a little extra coverage. Supplemental insurance can be bought through an agent or directly from a company.
Health Insurance for the Whole Family
Some health insurance plans cover only one individual. Others, often called “family plans,” also provide coverage for spouses and children. While companies with more than 50 full-time employees are required to provide health insurance to those employees, they are not required to offer family plans. The marketplace contains both individual and family plan options alike.
Many families find themselves in the “family glitch," or a situation in which certain family members might not be eligible for coverage under another’s employer-sponsored plan. Certain families become ineligible for subsidies, making individual health insurance too expensive.
Consequences of Not Having Health Insurance
What if you don’t have health insurance? Well, besides possibly setting yourself up for some costly medical bills, you may also face a fine from the government. The Affordable Care Act requires the majority of Americans to carry health insurance or else pay a penalty on their income taxes.
For 2015, the penalty for not having health insurance was the greater of either $325 for each adult and $162.50 for each child, or 2 percent of the family household income.
Perhaps because of this penalty, at just 11.3 percent of adults, the number of uninsured Americans reached a historic low in 2014.
There are, however, a number of exemptions to the penalty.
Some Health Insurance Terms Defined
When shopping for health insurance, there are some terms you will need to know in order to find the right plan for you.
Deductible. Your deductible is the amount you may be asked to pay yourself each year before your insurance begins paying its share of your medical bills. For example, if you have a $2,000 deductible on your policy, you pay $2,000 toward any medical costs before your plan contributes. Your plan may cover some services and devices before your deductible is met.
Copayment. A copayment or “copay” is a form of cost-sharing in which you pay a portion of your bill and your insurance provider pays the rest. For example, if you have a $25 copay for a doctor’s visit, you pay $25 to see your doctor and your insurance provider pays the rest. Copays can be utilized for office visits, hospitalization, prescription drugs, and more.
Coinsurance. Coinsurance works similarly to copays, but instead of being a flat fee, coinsurance is a percentage of the total bill. So if your doctor’s appointment costs $150, you might be asked to pay 20 percent of that as part of your coinsurance.
Out-of-pocket maximum. Your out-of-pocket maximum is the most your plan will allow you to pay out of your own pocket in annual medical expenses. Costs such as deductibles, co-payments, and coinsurance are all considered out-of-pocket expenses. Once you reach this limit, your insurance provider will pay for the rest of covered expenses.
Annual limit. Kind of like the opposite of an out-of-pocket limit, an annual limit sets a cap on the amount of money that an insurance company will spend on a customer, usually within a calendar year. Once you reach the annual limit, you will have the rest of the bills to pay yourself. These annual limits are being phased out by the Affordable Care Act.
Tips for Buying Health Insurance
After you’ve learned all there is to know about health insurance and you’re ready to begin shopping, keep these things in mind to help you on your way.
- How do you use health insurance? Are you one of those people who never goes to the doctor? Or, do you find yourself getting sick a few times every year? Are you active in taking preventive care measures? What does your family health history look like? Planning on having a baby? When shopping for health insurance, assess how much you expect to be relying on it.
- What is your budget? This does not only include how much of a monthly premium you can afford but also extends to out-of-pocket expenses such as deductibles, copayments, and coinsurance.
- What kind of plan do you want? Would you prefer the flexibility of a PPO? The family doctor feel of an HMO? Remember, personal preference plays a pivotal role in choosing a health insurance plan.
- Compare quotes. Health plan quotes come free and under no obligation. Compare costs of similar plans that you’re interested in to see where you can save money.
Don’t be afraid to ask. Health insurance agents, such as the ones at HealthMarkets, are at your disposal. It’s natural to have questions along the way. It’s our job to help answer them. Call us at (800) 360-1402 today.
About the Author: Kat McKinley
Kat is a customer service aficionado (15+ years!). Native Texan. Lifelong animal lover. MBA candidate. Fervent foodie. Always bringing her best and sharing joy.
"If you don't have health insurance - HealthCare.gov." 2015.
"Percent of Private Sector Establishments That Offer Health ..." 2013.