How Do I Get the Most Out of Health Insurance?

There are two kinds of health insurance: fee-for-service, which includes hospitals and private medical practices that charge for each service they provide and managed care services, which offer key financial incentives and comprehensive care that includes health maintenance organizations (HMOs) and preferred provider organizations (PPOs).

Most plans include an annual deductible or copayment for services. Regardless of your choice, it’s important to review the plans and find the one that best fits your family’s needs based on premium costs, deductibles, coverage details, and copayments.

Do I Need Health Insurance?

Most people understand that the high cost of health care creates a big need for health insurance to guarantee the health of their families, especially children. Expensive medical procedures can easily exhaust your savings and unexpected medical problems can strike at any time, even for young people in their 20s.

Some people feel that they can pay-as-you-go if they’re healthy, but this approach is faulty. Medical emergencies can bankrupt anyone, and large families increase the risks that someone will need expensive care. Although Congress removed the penalties of the Affordable Care Act (ACA) for not getting insurance as of January 1, 2019, the requirement as originally written stresses how important health insurance is for the average family. In fact, everyday expenses for children can place an extreme financial burden on most people who don’t have health insurance coverage.

What Are the Types of Health Insurance?

The most common types of health insurance plans include the following:

Employer-Sponsored Health Coverage Using Private Insurers

Most families get their health insurance from their employers or unions. Some people qualify for Medicare and Medicaid coverage if they earn low wages, are unemployed, or disabled or retired. The benefit of employer insurance is that your employer pays part or all of the premium. The ACA requires that employer health insurance plans cover its minimum mandates.

You can’t be excluded because you have a pre-existing medical condition, and nobody can be denied coverage during the annual period of open enrollment. Key services and treatments must be available to every person. Most insurance plans include some kind of prescription coverage, and for many people, paying for prescription medication is one of their biggest concerns.

If your employer doesn’t offer health insurance coverage or you are self-employed, you can buy your own health insurance from the health insurance marketplace that President Obama established. Health insurance subsidies are available to anyone who earns less than four times the poverty level.

There are two types of subsidies: the Advanced Premium Tax Credit that reduces your withholding deductions, and Cost Sharing Reduction that reduces copayments and coinsurance costs and/or raises your deductible. When buying a health insurance plan in the marketplace, applying for a subsidy is an automatic part of the process.

Qualified Health Plans

There are several types of qualified health plans that your employer might offer. These include:

1. Health Maintenance Organizations: HMOs are very popular, and you can purchase these privately or your employer might offer HMO coverage. These plans provide preventative coverage including visits to specialists. You and your family will have to make a copayment for certain non-preventive medical services. You will also have to choose a Primary Care Provider (PCP).
2. Preferred Provider Organizations: PPOs allow insured patients to see any doctor within the network of physicians and specialists. You will also have co-payments for non-preventive medical visits. PPOs might offer some coverage outside the network for highly specialized services.
3. Exclusive Provider Organizations: EPOs also provide a network of doctors and specialists from which to choose, but you can’t go outside the network except in emergencies.
4. Point of Service Plans: POS plans are hybrids of HMOs and PPOs. You can use out-of-network providers if you’re willing to make a copayment and accept a higher deductible.
5. High Deductible Health Plans: HDHPs are offered by HMOs, PPOs, and EMOs. The plans include a high deductible that must be met before the plans provide any insurance coverage.

Catastrophic Plans

Catastrophic plans provide coverage after meeting a high deductible. The plans don’t cover routine visits but catastrophic expenses such as cancer treatment and heart surgery. Catastrophic plans don’t meet ACA requirements for coverage, but these plans could provide essential protection from overwhelming medical expenses that could exhaust your savings.

Government Health Insurance

The U.S. Government offers Medicare and Medicaid coverage for people who are disabled or retired or earn little or no income. Their website provides assistance in obtaining extra financial help for medical expenses.

People who are out of work, earn low incomes, or small monthly government checks can qualify for Medicaid to pay uncovered expenses above certain thresholds. As such, you might qualify for all your Medicare insurance premiums to be paid by the government.

Short-Term Health Plans

Short-term health plans can provide coverage if you quit your job or miss getting a health plan during open enrollment. These plans are often cheaper, but they don’t cover all the services required by ACA. You can buy short-term insurance through an employer, broker, or at the government-sponsored health insurance marketplace.

What Else Do I Need to Know?

There are many plans available to supplement your insurance and prescription medicines and cover out-of-pocket expenses on over-the-counter drugs. Gap insurance provides a safety net if you have a high deductible or copayments and face a medical emergency. You can get a gap plan regardless of whether you have major medical coverage or a short-term policy. Examples of gap plans include critical-illness insurance, accident insurance, and fixed-benefit indemnity insurance that pays you cash if you suffer from certain illnesses. The latter could be valuable coverage if your family has a genetic predisposition to contract cancer, diabetes, or other illness. There are also government health savings plans such as Health Savings Accounts (HSAs) that allow you to earn tax-free interest on savings to use for any medically approved purpose.

Choosing Your Health Coverage Wisely

Although it might seem like a burden, researching health insurance coverage is important to get the right kind of protection for your family. A little effort now could result in a much easier time when someone in the family gets sick or injured.