Insurance
October 27, 2015

It’s Open Enrollment: How to Choose the Best Health Insurance Policy

With so many health insurance options, choosing a policy that offers the right mix of coverage and value can be difficult. Factors like deductibles, premiums and co-insurance have a…

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Basic Health Insurance Questions

Need help navigating the deep and confusing waters of health insurance? Here are answers to the most common questions about health insurance.

Health insurance is a contract with an insurance company that provides coverage for certain services in exchange for your payment of a premium. The specific healthcare services that are covered vary by the health plan. All plans must cover certain essential minimum benefits:

  • Ambulatory patient services (outpatient care outside of a hospital)
  • Emergency services
  • Hospitalization, such as for surgery
  • Pregnancy-related services, before, during and after birth
  • Mental health and substance use disorder services, including counseling and psychotherapy
  • Prescription drugs
  • Rehabilitative services and devices to help people with injuries, disabilities or chronic conditions gain or recover mental and physical skills
  • Laboratory services
  • Preventive and wellness services, as well as chronic disease management
  • Pediatric services, including oral and vision care

You might want to obtain additional health insurance if the plan offered by your company does not include coverage for healthcare services needed by you or if your employer’s plan does not cover your spouse or your children. Since many plans do not cover dental or vision care for adults, you might want to purchase health insurance for those services.

The cost of health insurance varies widely depending on the specific plan you have, your location, household income, whether you smoke tobacco and your age; the costs vary both in the cost of monthly premiums and the out-of-pocket expenses you must pay, such as co-pays and deductibles. For example, you might be required to pay a co-pay of $50 for each visit to your physician. You might be required to reach an annual deductible amount, which is the amount you must pay out-of-pocket, before the insurance plan will pay for any service. This deductible could be several thousand dollars. Your monthly premium, which could range from $0 to several hundred dollars, might be paid partially or entirely by your employer, or you might receive tax credits to help you pay the monthly premiums. You might pay full-price for your plan’s premiums.

As long as you enroll in a health insurance plan and pay the monthly premiums, you cannot be denied health insurance, even if you have a preexisting condition.

You should complete an application through the individual Health Insurance Marketplace at healthcare.gov to determine whether you are eligible to receive Medicaid in your state. If your modified adjusted gross income is less than 400 percent of the federal poverty level, then you likely qualify for tax credits that can be used to reduce the monthly cost of premiums. If you are under 26 years of age, then you can remain on your parent’s health insurance until that age. Catastrophic coverage plans might be an option for you as well, as a last resort.

If you are self-employed, a freelancer, consultant or independent contractor — in other words, you have a business that earns income but you do not have any employees — you can find health coverage options on the individual Health Insurance Marketplace at healthcare.gov. You can also shop for health insurance through a broker or independently if you are not satisfied with the options available through the health insurance exchange.

Health Insurance Tips

  • Figure out how much you currently are spending on healthcare expenses each month, identify your current prescriptions and project the likely routine services you will use in the coming year. This gives you a starting point for your health insurance search. For example, do you routinely visit the doctor only once or twice a year? If so, then you might be interested in a higher deductible plan that has lower monthly premiums. You would pay more for those couple yearly visits, but in case of catastrophic emergency your insurance would be in place to pay for the majority of expenses after you reach your deductible. If you need more comprehensive coverage or would like to have lower out-of-pocket expenses when you receive care, then you might prefer a plan with a higher monthly premium but lower co-pays and lower deductibles.
  • If you do not have insurance through your employer and need to shop for individual coverage, then calculate your current monthly income as well as your projected annual income. Medicaid bases eligibility on your current income, but the insurance plans available for tax credits through the Marketplace uses your anticipated future income to calculate any subsidies.
  • Check that your prescriptions are covered by the insurance plan you choose and that your provider is part of the plan’s network.
  • Review the plan’s summary of benefits to find out which preventive and other services, such as immunizations and health screenings, are included at no or minimal costs.

If your employer does not provide health insurance, then you might be eligible for financial assistance to pay for health insurance premiums or public benefit programs that provide healthcare for no or low cost.

  • Complete an application through the individual Health Insurance Marketplace at healthcare.gov. This application will screen you for eligibility for Medicaid, a health insurance program provided by the government for low-income children, their parents or caretakers, and disabled adults; in many states, eligibility was extended to low-income adults without children also.
  • If you do not qualify for Medicaid, you might be eligible for tax credits that can be used to help pay the monthly premium costs for certain health insurance plans.
  • Many government programs are available for specific health needs. For example, there are programs that screen for breast cancer, provide family planning services or cover pregnancy-related services only. These programs usually are offered through your state’s department of public health or can be accessed through your county’s social services agency.
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