While most Americans recognize that healthcare is an essential investment, many don’t know how their policies work. In fact, a census from 2018 shows that more than 27.9 million people don’t even have a health plan. For some, it’s a lack of understanding that puts them off the expense. Others can’t afford it and don’t realize that there are alternatives available.
In this article, we’re going to look at a few key things everyone needs to know about their health insurance plans before making a purchase. If you don’t have coverage yet, we hope that you’ll feel comfortable enough to start looking at your options once you’ve finished reading.
1. Know the Basics
What is it about health insurance that confuses consumers so much? It could be anything, from the technical terminology to unclear policy terms. Some consumers don’t even really understand what they’re getting in exchange for their monthly premium.
It’s a widespread problem. Statistics show that 96% of Americans don’t know the basic policy terms or their coverage. Unfortunately, this lack of understanding means that many young and middle-aged citizens don’t invest in something that could save their lives.
Even if you’re lucky enough never to have an emergency, getting the right insurance policy can still help with regular GP and chronic prescription meds costs. In short, you pay a small fee every month, and, in exchange, most of your medical expenses will be covered.
The costs and included services differ from plan to plan, but it’s better to have a basic one than none at all.
2. Understand Your Options
There are several different types of insurance, each covering certain services, making it even harder to choose the right plan. There are HMOs and PPOs, policies created around your age, and federally-funded programs like Medicare and Medicaid. There are even a few specifically geared towards college students.
So, where does a person even start on this confusing journey?
Let’s begin with the fundamentals.
There are two basic types of insurance plans: group and individual. Group policies are usually used by businesses or unions, while individual ones are for the average consumer. We’re going to look at both briefly:
3. Group Plans
Since employers usually pay for group insurance, these policies offer a far more comprehensive coverage plan. Depending on your company’s willingness to spend on their employees, you could be insured for everything from maternity to dental care.
4. Individual Plans
Also referred to as single-payer plans, you need to buy these policies from a broker or agency. You can usually get quotes from various providers, such as those by HealthMarkets, but you can also search for others online.
You might not realize it, but due to the Patient Protection and Affordable Care Act (PPACA), individual health plans must cover several ‘essential benefits.’
Before, you would have had to buy separate riders to cover everything. Now, all healthcare plans must include the following services:
- Ambulatory (such as outpatient care)
- Emergency and hospitalization (overnight stays, surgeries, etc.)
- Pregnancy, maternity, and care for newborns
- Mental health treatment, including counseling and psychotherapy
- Prescription drugs
- Laboratory testing
- Rehabilitation and habilitative devices (including services dealing with injuries, disabilities, and chronic conditions that require physical or mental recovery therapy)
- Preventative and wellness
- Chronic disease management
Another significant and often overlooked factor is that agencies can’t turn away people with pre-existing conditions. Before the PPACA, these folks had no choice but to buy their insurance from state-sponsored pools. However, providers are now obligated to give everyone access to the same plans, regardless of their medical history.
In essence, even the most basic individual insurance plans will see your essential needs covered and then some.
Now, you just need to shop around for a broker you like and trust.
5. Learn the Key Terms
If you want to get the most out of your insurance plan, it’s necessary to understand a few basic terms. Let’s take a quick look at each one:
- Premium is the fee you need to pay every month to keep your insurance plan active. If you’re on a group policy, this might be partially or wholly paid by your employer.
- Co-pay is an amount you need to spend when receiving medical care. When you get a policy, your insurer needs to take you through the copayment numbers. It’s usually a fixed fee that must be paid before the plan will cover the rest of your healthcare costs.
- A Deductible is a threshold you must reach before your policy starts covering expenses. For example, you may need to pay $1,000 on doctor’s visits before the insurance will further pay out.
- Coinsurance is a percentage of the total bill that you need to pay. It usually comes into effect when deductible requirements are met. A policy will often cover about 80% of an account while you’re required to fork out the remaining 20%.
These certainly aren’t all the terms, but knowing what they mean will help you choose a more suitable plan. You’ll also have a better idea of when a healthcare policy will pay your expenses, and when you’ll need to cough-up first.
There’s no denying that health insurance can seem incredibly confusing. That said, it’s still something that everyone should have. If you’re planning on getting coverage, learn the basics, and know what your options are. Find out if you need to get one for yourself or if your employer has you sorted.
Whether you’re still getting a policy or have one already, take the time to understand what different terms mean and how they can work in your favor. Finally, don’t be afraid to look for help online. Many brokers will be more than happy to discuss your options in detail before helping you choose the right plan for your needs.