Taking care of our health can seem affordable, as long as we stick to healthy lifestyles and only need to go for a medical checkup every now and then. But then life happens, and the medical checkup turns into a full course of treatment, appointments, follow-ups, and a plethora of examinations and tests. If you’ve got nothing to back you up, your out-of-the-pocket expenses will quickly be legendary.
On the other hand, enrolling in a health insurance plan may feel overwhelming. There are way too many options to choose from. We’ll try to simplify your choices in this article, we’ll explain everything you need to know about different types of health insurance plans and how they work.
Common Terms to Get Familiar With
If you’re new to health insurance, you might very well feel overwhelmed with all of its terms. Here’s a glossary to get you started:
- Premium: the monthly payment you make to get insurance, it kind of works like a membership subscription.
- Deductible: the amount you pay out-of-pocket in a year before the insurance benefits kick in.
- Coinsurance: once you’ve reached your deductible limits, your insurance plan kicks in. They cover a percentage, and the percentage you’re paying is called “coinsurance”.
- Copayment: the amount you’ll pay every time you visit a physician, with specialists costing more than primary care physicians.
- Out-Of-Pocket Maximum: the amount of money you pay on your own before your insurance kicks in, and it’s the sum of both deductibles and copayments.
- Waiting Period: the time you wait after enrolling in a plan before you start benefiting from the insurance.
- Enrollment/Disenrollment Period: there’s an open window that differs according to the plan you want to enroll in. If you miss this window, you won’t be able to enroll/disenroll in a plan until the next window.
Ways to get a Health Insurance Plan
You can get health insurance from multiple sources; it all depends on your situation. You may get your insurance through your employer or educational institute, enroll in a plan as an individual to cover your own and your family’s insurance or get Medicare of Medicaid.
Group Insurance Through Work or Union
If you’re an employee, then there are high chances that your work offers medical and health insurance in your compensation package. The same goes if you’re a member of a union or a syndicate. This kind of insurance is commonly known as group insurance, and it comes with its own advantages. In a group health insurance, the employer or the union purchases an insurance plan that covers their employees or members and their families. They choose from a variety of insurance plans offered by the insurers and, depending on their choice, they can offer one plan to their beneficiaries or let them choose from different plans. Instead of paying full premiums on their own, the employees or members split the cost of the monthly premium with their insurance provider, reducing their healthcare costs significantly. The employers also benefit from offering health insurance to their employees, and it can come as tax benefits.
Health Insurance as a Student
Some educational institutes offer health insurance to their students. If you’re studying in one of those institutes, then you’ll be eligible for getting the benefits of their student health plans, which can provide sufficient health coverage. You can also enroll in a Health Insurance Marketplace, whether or not you have student healthcare privileges. There are a variety of health insurance in the marketplace for students, each requiring their own paperwork. But generally speaking, you can enroll in your own plan whether you’re independent, dependent on your parents, living with them or not, over or under 26 years of age. You’ll find plans to suit your own situation.
Individual Insurance Directly from Insurers
If you’re an adult and you don’t have workplace benefits; for instance, you work as a freelancer or your work doesn’t offer health insurance, then you can get your insurance directly from private insurers. This kind of insurance will cover you and your family members, but you’ll pay for its monthly premium fully on your own.
The monthly premium you pay will depend on the plan structure you choose and the kind of membership, which can be divided into 5 categories as follows:
- Bronze: you pay 40% coinsurance, and your insurer pays 60%
- Silver: you pay 30% coinsurance, and your insurer pays 70%
- Gold: you pay 20% coinsurance, and your insurer pays 80%
- Platinum: you pay 10% coinsurance, and the insurer pays 90%
- Catastrophic: you pay 40% or more coinsurance, and your insurer pays 60% or less. Catastrophic coverage is only available to men and women younger than 30, or for individuals who qualify for a hardship exemption.
Generally speaking, individual insurance is much more expensive than joining group insurance. However, if your income is 400% of the federal poverty level or less, you can be eligible for reduced premiums, minimize out-of-pocket expenses, and even tax breaks. In this case, individual insurance can become pretty affordable.
Individual insurance plans will cover all essential health benefits, which include the following services:
- The medical expenses of outpatient care
- Emergency care
- Hospitalization and inpatient care
- Pregnancy and newborn care
- Mental health and substance abuse
- Prescription drug costs
- Lab tests