Health Insurance FAQ's
What is Health Insurance?
Health insurance is a type of coverage that can protect you from the full expense of regular health care, as well as the costs of medical and surgical procedures. In exchange for paying a premium, your insurance company will cover the costs of your healthcare and certain types of medical procedures.
Health plans may be available from your employer, but you also have the option of purchasing your healthcare coverage privately. If you are self-employed or unemployed, you may have group insurance options through professional associations, in addition to private health insurance.
What Does Health Insurance Cover?
Health insurance can cover a variety of things, from your regular checkups and family care to your major medical expenses. The types of services that are covered will vary with different healthcare providers and plan types, so it is important to determine your needs before buying a specific health insurance plan.
Physician office visits are one of the most common things that health insurance covers. Other common covered services include hospital room and board, emergency room visits, and inpatient substance abuse treatment.
Some things that you might think would be covered under a standard policy, such as chiropractic care and MRI's, may not be; however, thanks to the the passing of the Affordable Care Act, most routine preventive services are covered in full.
Some insurance policies will cover vision services and surgeries while others will not. Special tests may not be covered and you should not expect all services to be covered 100 percent. There is normally an out-of-pocket expense, through a co-pay, coinsurance or deductible.
Make sure that you know what your policy covers, whether all of your family members are covered, and how it will be paid for. Some health insurance policies, like HMOs (health maintenance organizations), will only cover procedures performed by certain professionals in a network.
A PPO (preferred provider organization) will allow you to choose your provider and then pay based on that provider’s preferred status.
How Does Health Insurance Work?
Health insurance can help you pay for your regular healthcare costs as well as your major medical expenses, depending on the type of plan you choose.
You will pay a premium of some kind, based on your plan and coverage, whether you get your health insurance through your employer or privately. Depending on your type of plan, you may have co-pays, deductibles and coinsurance.
Here is an overview of these costs:
Co-payments: With a co-payment, the insurance company agrees to pay for a service but you must cover a pre-set cost, such as $20. This cost applies every time you schedule a service that has an assigned co-pay; co-pays can be lower or higher depending on the plan or according to the service provided. The Affordable Care Act mandates that most routine preventive-care procedures, such as annual physicals and routine inoculations, be covered in full without a copay.
Deductibles: A deductible is the amount of money that you are required to pay before your insurance begins to cover services. Normally, you will either need to meet a deductible or pay a co-pay amount.
Coinsurance: Some policies may have coinsurance, which requires you to pay a certain percentage of services rendered. Your coinsurance may be an amount you pay in addition to your co-pay and may apply towards your deductible.
Choosing the best plan really depends on your personal circumstances. An independent agent in our network who specializes in health insurance can help you navigate the many options and find the most sensible and affordable plan for your needs.
Why Is Health Insurance So Important?
Health insurance helps you to manage the costs of your family's care, including regular doctor's visits and unexpected illnesses and injuries.
Just one serious illness, or an emergency procedure can have dire consequences for your financial portfolio if you aren’t insured properly.
Health insurance coverage may seem expensive, but if you compare your premiums to the cost of surgery and other medical procedures out of pocket, there’s no question that healthcare insurance premiums are far lower in cost. Also, having adequate health insurance can help you live a healthier, longer life.
These policies cover preventive care, which helps you manage your health proactively, and covered routine testing can help with early detection of common conditions and diseases, such as diabetes, heart conditions, and thyroid problems, which can require much more extensive and costly care if they go untreated.
By contrast, if you are uninsured, you’re less likely to visit the doctor. The cost of a routine examination for the uninsured can be costly and can be a disincentive to take charge of your good health.
How to Get Health Insurance
When you begin to search for health insurance, you can look on the private market or through your state's healthcare exchange. For those who are new to the process, it can be overwhelming.
Start by assessing your needs. If you’re prone to illness, play high impact sports, or have a risky profession, it may be better to have a co-pay plan rather than one with a high deductible.
If you have children, the plan that is most beneficial to you may be different from the ideal plan for someone who is single with no kids. If you have a favorite doctor, make sure that doctor is “in-network” if you opt for an HMO.
You also need to think about your budget, and whether a plan that involves coinsurance or higher deductibles makes the most sense for you. By assessing your needs and comparing plans, you can find an affordable healthcare plan that meets your needs.
Many people don’t know where to start because the number of plans and variety of coverage options is very confusing. An agent who specializes in health insurance is an excellent resource.
These agents can help individuals and families to review a range of plans from different health insurance companies and choose one that will help with preventive care and major medical care at an affordable cost.
Is Health Insurance Required by Law?
While it is not illegal to be uninsured, you will face tax penalties if you do not carry coverage. There are a few exemptions to the mandate for coverage, but you should assume that the tax penalties will apply to you.
An agent can help you understand the tax implications you will face and compare them to the costs and benefits of having insurance.
When too many people are uninsured, the result is that tax payers must shoulder the burden of healthcare costs for those who are not able to pay for care.
One problem is that by the time uninsured individuals feel sick enough to warrant a doctor's visit, their health conditions have frequently progressed to the point that the necessary treatments are more prolonged and expensive. These costs are often too excessive to be handled by the patient, they frequently go unpaid.
This results in higher insurance rates as hospitals raise costs for treatments to cover their losses. Healthcare reform is designed to get everyone covered so they are managing their health before health conditions get out of control and so that hospital receive the payments they are due and can lower costs across the board.
The Affordable Care Act, and its insurance requirement, is designed to get as many people covered as possible so that people are managing their health and avoiding expensive hospital costs that could have been prevented.
This, in turn, will result in lower costs for everyone, thus making it easier you to get the health insurance you need at a price you can afford.
Furthermore, most people who purchase their coverage through their state's healthcare exchange qualify for government subsidies, which can make their premiums even more affordable.
What Does Health Insurance Cost?
The cost of health insurance depends on several factors. Costs vary based on your plan type, whether you have insurance through an employer or private insurer, what state you live in, and how much of the insurance you cover.
Additionally, if you purchase your coverage through the healthcare exchange, you may qualify for government subsidies based on your household income.
On average, individual policies cost anywhere from $150 to $200 per month and family policies can cost $350 to $425 per month. With some plans, you will pay these premiums entirely out of pocket and for others, the majority of premiums are covered by an employer.
You can adjust your premium based on your coverage amounts as well as your deductible amount. If you need more affordable healthcare but aren’t sure where to start, you can shop for a lower cost plan through an independent agent in our network.
Is Health Insurance Tax Deductible?
Health insurance is tax deductible if you are self-employed or have a health savings account. If you are self-employed, the premiums that you pay for health insurance for yourself and your dependent can be deducted from your taxes. If your dependents are covered under another insurance plan, you cannot deduct that premium.
A health savings account (or HSA) is used in conjunction with a high deductible health plan. You typically must buy these plans from an employer, although they are also offered through private insurance companies. Any amount of money that you contribute to your HSA account, up to a certain limit, is tax deductible.
What Is a Health Insurance Deductible?
A deductible is the amount of money that you need to pay out of pocket before your insurance begins to provide coverage.
Deductibles will renew each year, and most preventive care services, such as annual gynecological appointments and routine age-appropriate testing, will be covered in full regardless of whether or not you have met your deductible amount.
You can save a lot of money on your monthly premiums by choosing a plan with a very high deductible; just be sure that you have the funds set aside to pay your healthcare costs in the event that you need major medical care.
What Does Health Insurance Cost an Employer?
The Affordable Care Act requires all employers who have at least fifty full-time employees to provide them with subsidized health care coverage.
If you are receiving health insurance benefits through your work, be aware that while the costs may seem high when they are deducted from your paycheck, your employer is likely paying about three times as much as you are toward your premiums.
Some people feel that the policies offered by their employers are too lacking in coverage, and they may want to look for health insurance on the private market to compare costs.
On occassion, this may be beneficial, but without an employer subsidy, it may be hard to find a more comprehensive plan that has a comparable or better cost.