You don’t need an advanced degree to understand the health care system, but with so many options, decisions, and technical terms, it often feels that way.
Luckily, the days of endless internet searches and phone calls with health insurance representatives are over. This guide will provide a helpful, easy to understand overview of health insurance basics.
All of your biggest, most important health insurance questions will be answered. So, keep reading!
Health Insurance Basics
Purchasing health insurance helps cover the cost of medical care. If you are sick, injured, in need of surgery, or looking for preventive care, health insurance can reduce the total amount of money you have to pay.
How? Well, before diving into that, take a look at these common vocabulary words that you might see when purchasing health insurance.
Premium: A premium is the total amount of money you pay your insurance company per month for coverage. This cost varies depending on the type of health insurance plan you have.
Deductible: The deductible is the total amount of money you pay for medical care until your coverage benefits kick in. For example, if your deductible is $1,000, you will have to pay for the first $1,000 of your medical care before you start sharing the cost with the insurance company.
Coinsurance: Coinsurance is the amount of money you owe to the medical provider (doctor, chiropractor, etc.) after you have met your deductible. Your health insurance plan will usually have a percentage of the cost you owe to the provider. For example, if you have a medical procedure that costs $100 and your coinsurance is 10%, you will pay $10.
Copay: Your copay is the amount of money you pay the medical provider regardless of your deductible status. It is usually a specific amount of money based on the type of medical service. For example, a regular doctor’s visit might have a copay of $25.
Before you purchase a health insurance plan, you will be able to see how much each of these costs will be. You can compare rates and make an educated decision based on the health care services you expect to pay for in the next year.
Health Insurance Plans Explained
Now that you know a bit more about the basics of health insurance, it’s time for a lesson in the different types of health insurance plans.
Employer-Sponsored Health Insurance: If you have employer-sponsored health insurance, a certain amount of money is deducted from your paycheck to cover your share of health insurance costs. This coverage may not pay for 100% of your medical expenses, but it will make medical care more affordable.
Your employer may offer a few different kinds of insurance with varying costs for premiums, deductibles, and copays. So even if you are not purchasing insurance yourself, this information still applies to you as a health care consumer.
Enrollment Period: The enrollment period defines the time in which an individual can purchase health insurance using the federally-facilitated Health Insurance Marketplace. The enrollment period is usually between the middle of November and the middle of December, but it is different every year.
If you are purchasing insurance as an individual or for a family, you can use the Marketplace. If you receive health insurance through your employer or as a student, you will usually not purchase through the Health Insurance Marketplace.
You can still purchase health insurance outside of the open enrollment period if you experience a qualifying life event such as losing your job or getting married.
You can also purchase short-term health insurance outside of the open enrollment period.
Short-Term Health Insurance: A short-term health insurance plan offers flexible, affordable coverage. Short-term plans can be purchased for three months up to a year and can be renewed up to three years, depending on state law. If you think short-term health insurance may be right for you, take a look at these frequently asked questions for more information.
Health Maintenance Organization (HMO): An HMO is a type of insurance plan that allows an individual to choose one primary care physician (PCP). Any other specialists or medical professionals that the individual wishes to see must be in the same network of providers as their PCP.
The network of providers is a list (usually accessible online) of all the doctors that you can visit that your insurance will pay for. If you seek care outside of that approved network, you will have to pay the total cost without help from your insurance.
Preferred Provider Organization (PPO): A PPO plan still has a network of providers. You will pay less if you visit a provider in the network than outside of the network. Unlike an HMO, a PPO allows you to see specialists outside of the network.
Purchasing Health Insurance
Now that you understand the basics of health insurance and health plans, the next step is finding a plan that will work best for you.
Remember that you can purchase health insurance as an individual or for a family on the Health Insurance Marketplace. If you choose to buy insurance on the Marketplace, there are different categories of coverage.
Each category of coverage has a different rate of coinsurance. The bronze policy requires an individual to pay 40%, silver requires 30%, gold requires 20%, and platinum requires 10%.
The bronze plan has the lowest monthly premium, but a higher deducible. The platinum plan has a much higher premium, but a lower deductible. Therefore, your choice will likely depend on how much medical care you anticipate needing or what you are willing to pay for a monthly budget.
Approach Health Insurance With Confidence
With the health insurance basics under your belt, you are ready to confront the world of health care with no fear! As you’re shopping for a health insurance plan, think about what you can afford on a monthly and yearly basis. Consider how often you might see specialists versus your regular doctor.
Vera Health can answer your questions and help weigh your options so you can find the right coverage for your needs. If you’re looking for affordable short-term health insurance or want to learn more, call us at 888-499-1187 or visit our website.
Short Term Medical coverage is not required to comply with federal market requirements for health insurance, principally those contained in the Affordable Care Act (ACA). Be sure to check your policy carefully to make sure you are aware of any exclusions or limitations regarding coverage of pre-existing conditions or health benefits (such as hospitalization, emergency service, maternity care, preventive care, prescription drugs, and mental health and substance use disorder services). If this coverage expires or you lose eligibility for this coverage, you might have to wait until an open enrollment period to get other health insurance coverage.