BASICS OF HEALTH INSURANCE
So, you’ve found yourself needing Health Insurance. Now you have to figure out what Health Coverage is for, how much you should pay for it, where to find it, how to make sure it will truly protect you and then, how to use it. This article will help you answer some of these questions to give you a basic understanding of insurance, and some important key concepts to know as you start your journey.
What is health insurance?
A Health Care plan is a contractual agreement from a health insurance provider, to assist you in paying for medical payment or reimbursement. It provides financial protection if you have an accident or sickness. Health insurance could help you pay for doctors visits, prescriptions, ER visits, preventative care and other health related tests or scans that may be needed. All of this protection is in exchange for a monthly premium that you pay.
What is a health insurance plan or policy?
A health insurance plan, or a health policy is an important document that you should definitely take the time to read over. It will include things like what you can expect to pay out of pocket (Yes, you still have out-of-pocket costs in addition to your premium), the length the agreement will cover you, which doctors and hospitals will be in or out of network, which type of network you have, etc. If you don’t understand how to read this, then you should find a professional you trust to help you.
Where can I find a health plan?
There are a few places you can find a health insurance policy for you and your family or small business.
- Your employer
- Healthcare.gov
- Private plan
- Short – term plan
- Government programs such as Medicaid, Medicare, and Veteran’s health administration
Each type of plan has different guidelines it follows when it comes to costs for the consumer and what the insurance agrees to pay for. Some plans will exclude coverage for pre-existing conditions. So, again, it is so important to read and understand the policy before enrolling in the coverage.
Can you see any doctor you choose?
The type of plan you choose (PPO, HMO, EPO, POS) will determine which doctors you can see and which hospitals you can go to.
In my experience, most people try to find a PPO plan whenever possible, because this plan allows the most choices in providers and hospitals. Of course, the monthly cost is typically higher than the other options. A PPO plan, in my opinion, is the best. Not only does it allow you many more options – but it will also offer coverage if you choose a doctor or hospital out of network. You don’t need a referral to see a specialist, either. In short, it allows you to have more control over your healthcare.
An HMO is a health maintenance organization. This type of network limits coverage to doctors, hospitals and specialists who have contracted with that HMO. Out of network care is typically not covered by these plans. Additionally, most often, you are required to work or live within its service area to be eligible for that specific plan. An HMO may require a referral from your primary specialist to see a specialist. This type of plan focuses on preventative care.
An EPO is an Exclusive Provider Organization. EPO’s are limiting, in that they only allow you to see doctors, hospitals and specialists that are in that network. In general, they do not offer any out-of-network coverage, except emergencies. Typically, they do not require a referral to see a specialist.
A POS is a type of plan where consumers pay less if they use in-network doctors, hospitals and specialists. You may need a referral from your primary physician to see a specialist.
How do I know which doctors are in that network?
You should contact your agent or health insurance company to find out if your chosen doctor is in network. Most companies even have an online directory so that you can see all of your choices that would be in-network for your particular plan. It is important to note that health care networks do change from time to time. It is always a good idea to double check with your doctor when you make an appointment that they are still in-network with your insurance.
Important terms you should know before looking for insurance
- Premium: The amount you pay on a monthly basis to have the plan in place. It’s your “subscription”, if you will. If you stop paying, you will not have benefits when something happens.
- Deductible: This is the amount you, as a consumer, pay for covered services (in addition to your monthly premium) before the plan begins to pay. You should note that there may be different deductibles for out-of-network coverage, prescriptions or other groups of services.
- Cost-Sharing or Co-Insurance: After your deductible has been met, this is the amount you will also be responsible for while the insurance company is also helping you with costs of your services received.
- Out-of-Pocket Max: Most plans have this limiter in place to protect the consumer. Once you’ve met this amount with your deductible, co-insurance plan will pay 100% of all remaining bills for the remaining length of your plan. You are still responsible for your monthly premium.
What is the difference between a Comprehensive plan and an Indemnity Policy?
A comprehensive policy is best described where you and the insurance company share expenses as listed above, for all of your health care services. You have an out-of-pocket max to ensure that you have a maximum amount you will pay that year, no matter what happens to you. The insurance company will cover 100% of expenses after that is met.
An indemnity policy (this is most short-term plans, so be aware) is one where the health insurance company has fixed amounts they will pay for each service, facility or physician you receive services from. After they pay their set amount, you are then responsible for 100% of all remaining costs related to that service. These are risky plans, since there is no set cap or maximum for you to pay.
| Other Tips to Know: Some plans cover some things in full, even before you pay your deductible or co-insurance. Usually preventive care is in this category. This is with the hopes that bigger health issues are caught and treated early. An EOB (Explanation of Benefits) will be provided after your visit via mail or your online insurance portal. This is not a bill. This is simply a statement showing you what your insurance paid for you. You should always take a look at this. Not only will you see the benefit of having coverage – you will also be able to catch any errors that could potentially save you money. Everyone should have insurance. Even if you’re young and healthy. Even if you exercise often and have a healthy diet. All of that is great – and you are doing your best to prevent major illness. But, we never know when an accident will happen. No healthy diet and exercise will prevent that. If you do not have insurance, you could be responsible for tens of thousands of dollars worth of medical bills. And even worse – the hospital does not have to treat you without insurance. You could be faced with severe medical problems, or even death if you can’t pay the bill up front. |
In Conclusion
Finding health coverage is important, and requires a bit of research to make sure it will offer you the best coverage and still be within your budget. If you find yourself needing to review your current plan, or check out what other options are available to you, I am happy to help. My services are free, and I have access to all the plans that are available to you. I will help you review all of your options so that you have the knowledge to choose the best plan for yourself, your family, or your small business.
Set a time for us to chat! Let’s get your Health Insurance questions answered.
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