Healthcare

Understanding Health Insurance

Admin Blog

Recently, the number of Americans without health insurance has steadily declined. According to a Gallup survey, at the end of 2014 12.9% of Americans were uninsured, compared to 17.1% a year prior. While that rate may seem low, that still leaves over 41 million Americans without health insurance, and a vast majority of these uninsured individuals are between the ages of 18 and 34.

If you’re one of these uninsured Americans, now is the time to sign up for coverage. One great reason is because the Affordable Care Act requires individuals to purchase coverage or face a tax penalty. But don’t worry. If you’re low on funds, you can go to a state health exchange to apply for subsidies to help you pay your premiums.

If your employer doesn’t provide health insurance benefits and you’re thinking about purchasing your own policy, take a look at the information below to get an overview on health insurance.

What is Health Insurance?

Health insurance helps to cover the costs of various health procedures and medications. Your insurance can either pay the care provider directly to cover the cost of your bills or reimburse you for bills you paid out-of-pocket. Some plans require out-of-pocket costs for certain procedures, which can also come in the form of co-pays, co-insurance, and deductibles.

Health insurance may be offered in your employers benefit package, but if not—or if you are self-employed—you can sign up for a policy through your choice of insurance provider.

What Does Health Insurance Cover?

Health insurance coverage will depend on your provider and the insurance plan you choose. Commonly, most policies include coverage for:

  • Doctor’s visits
  • Hospitalization
  • Maternity and infant care
  • Mental health care
  • Prescriptions
  • Preventative care, such as vaccinations, pap smears, and cancer screenings

Keep in mind that there are many other types of health-related insurance options not covered under basic insurance plans. Examples include disability insurance, long term care insurance, and critical illness insurance.

Be sure to check with your insurance provider on the exact terms of your policy so you understand what and how much it covers.

What Types of Health Insurance Are Available?

In general, you have two health insurance options: private health insurance and public health insurance.

Public health insurance plans include those like Medicare for the elderly and disabled and Medicaid for those in low-income families. Unfortunately, not everyone is eligible for public aid, so most Americans—approximately 2/3 between the ages of 18 to 64—are insured under a private provider. You will commonly see the following types of insurance offered:

  • Exclusive Provider Organization (EPO): This is a managed care plan that will only cover doctor’s visits and hospitalizations if you choose a care provider in the insurer’s network, except in emergencies.
  • Health Maintenance Organization (HMO): Similar to an EPO, HMO plans are limited to care providers within a network. However, insured individuals generally do not pay for individual services. Rather, they pay a premium and receive access to a range of health care services, including preventative procedures. A co-payment may or may not be required.
  • Preferred Provider Organization (PPO):  PPO plans allow the insured to visit any doctor they like, but they can receive cheaper care from doctors within the PPO network.
  • Point of Service (POS): POS plans are like a hybrid of HMO and PPO plans. You can choose any doctor you want, but unlike PPO plans, you must receive a referral from your primary care doctor to see a specialist.
  • Indemnity Plans: These plans are not bound by a network, so you can visit any doctor. However, co-insurance costs are common, and you usually receive your insurance coverage through reimbursements rather than direct pay to the care provider.

Having health insurance coverage isn’t all about avoiding tax penalties. These plans can help you rest with peace of mind knowing that in emergency and non-emergency medical situations, you’ll receive the assistance you need to pay for your healthcare. What type of insurance policy do you feel is the best fit for your family?

 

AdminUnderstanding Health Insurance