About 30% of adults in the U.S. have put off going to the doctor or taking medications they need because of the cost.
This is true for people who have coverage through their employer or through an individual plan with a private health insurance company.
The costs of health insurance and health care in the U.S. have ballooned to the point where it’s out of reach for many. They roll the dice and hope that nothing serious happens to them without health insurance, so they can save money.
Yet, if you don’t have health insurance and something happens, then you have to pay the medical bills. You can avoid that scenario by choosing the right
Keep reading to learn about health insurance and how you can choose the right plan for your needs.
1. Health Insurance Terminology
Only a small percentage of Americans know what to look for in health insurance policies. About 41% of Americans are surprised when they get a high tax bill because they expect insurance to cover it.
They are familiar with basic terms like deductible, premium, out of pocket costs, and network, but don’t understand how they impact coverage. Here are the most important terms that you need to understand.
Deductible: This is the amount of money paid out of your pocket before your insurance company contributes to the expenses.
Premium: The amount of money you pay for health insurance. This is usually paid on a monthly basis.
Co-Pay: The amount of money you pay for doctor’s visits and services once you met the deductible. This is usually a flat rate for office visits and a percentage for other medical services.
You might have a $10 co-pay for a doctor’s visit, $30 co-pay for specialists, and 20% of emergency services and hospital stays.
Co-Insurance: Co-insurance is the same as a co-pay.
Once you understand how these items work together, you can anticipate your health care costs.
2. Your Main Health Insurance Options
How can you get health insurance coverage? That’s the big question for many Americans. Traditionally, employers offer health insurance as part of a benefits package.
With the costs of coverage increasing, that’s less and less likely. Most employers ask employees to share the burden, looking to off-set the costs of insurance.
Another issue with employer-sponsored health insurance is that there are 44 million people who are self-employed. These workers are responsible for their own health insurance.
Since they don’t have an employer, they’ll have to get group coverage through an industry association or individual coverage through the Health Insurance Marketplace.
How Does the ACA Impact Taxes?
Self-employed workers are especially sensitive to taxes. They have an advantage because they get to write-off business expenses to lower their tax bill.
They tend to pay a higher percentage in taxes because they’re responsible for 15.3% in self-employment taxes to cover Medicare and Social Security. They then pay additional income and state taxes depending on how much profit they earn each year.
To add a little bit more confusion to the fire, the ACA has tax implications for people who get coverage through the Healthcare Exchange.
Your health premium subsidies are tax credits that are based on your anticipated income. If your income is higher than you anticipated, then you may have to pay back some of those tax credits. A lower income than you expected could result in a tax refund.
If you do have a significant change in earnings during the year, you should update your application to reflect the changes. Your tax credit amount will be adjusted.
3. Provider Network
Do you have doctors and specialists that you already have a relationship with? You want to make sure these practitioners are in your help insurance company’s network of doctors.
When you visit these practitioners, you’ll pay the in-network co-payments. If your providers are outside of the insurance network, you may have to pay the entire bill out of pocket, or the health insurance company’s out-of-network rates.
Health insurance companies usually have a directory of providers on their websites. Check these thoroughly before you sign up for a plan.
4. PPO vs. HMO
There are two terms that weren’t covered in the first section because they need to be on their own. There are a few different types of health insurance plans. These plans will determine your access to doctors within your network.
An HMO is a network of doctors where you have a primary physician. Anytime there’s an issue, you have to see the primary physician first. You’ll get a referral to see another specialist.
PPOs will cost a little more, but you have more choice as to what provider you want to use. You still need to use in-network providers. You just don’t need a referral for every single thing.
5. List of Benefits
What are the benefits of working with one particular insurance company? Does one insurance plan offer perks like naturopathic care or chiropractic visits?
You may want to lose weight, and some insurance companies will provide access to weight loss services at no charge.
For example, a health insurance company may offer supplemental insurance. These are additional plans that you pay for each month that cover vision and/or dental care.
6. Total Cost of Health Insurance
It’s a costly mistake to only look at the monthly premium and not calculate the total cost of insurance. Let’s say that you choose the insurance plan with the lowest monthly premium.
Low-premium plans have very high deductibles, so you will pay more out of pocket for medical care. This may be fine for someone young and healthy, but not for someone who visits the doctor regularly.
For someone that visits the doctor regularly and is on prescription medication, you need to calculate potential co-pays, prescription costs, and premiums.
7. Pharmaceutical Coverage
Pharmaceutical coverage is important if you already take prescription medication. Not only that but if you have a preferred pharmacy, you need to make sure they take your insurance plan.
Some insurance plans will only cover generic drugs, while others provide more coverage.
8. Life Changes
Do you have any major life plans for the coming year? Do you plan to move, change jobs, or start a family? All of these changes can impact your health insurance.
For example, if you change jobs, you’re likely to change your health insurance plan with it. You’ll need to know what your new health coverage plan is and how it compares to the one you have at the moment.
For couples trying to start a family, your health insurance needs will change. You’ll need to have prenatal care, hospital care for the birth of your child, and coverage for your infant.
If you know that is in your plan during the year, then it’s important to check to see which plans cover childbirth.
The Future of Health Insurance?
The Affordable Care Act was a controversial bill, and it certainly wasn’t perfect. It did, however, get more people covered by health insurance.
It also ensured that all people with health insurance would have access to preventative screenings, and get coverage with pre-existing conditions.
The future of the Affordable Care Act is now in the hands of the U.S. Supreme Court. In the coming week, the Court will hear oral arguments brought by a coalition of some state attorneys general.
They argue that the individual mandate is illegal, and the entire law should be illegal. No one knows for sure what the Court will do.
There is speculation that the entire law could be struck down, which would leave your coverage in place, but the tax credit payments to your insurance company would stop immediately.
Parts of the law could get struck down, or an opinion is handed down that doesn’t change the landscape at all.
Since parts of the Affordable Care Act affect all health care plans, you need to pay attention to what happens in this case. The Supreme Court is expected to decide by the end of the term in June 2021.
Health Insurance and Privacy
Health insurance companies are responsible for guarding your privacy online. They are required by the Health Insurance Portability and Accountability Act, which was introduced in 1996.
This required insurance companies to inform you as to what personal information they kept on file, and how they shared that information.
There are new rules that take effect in 2021 that you should be aware of. You want to choose a health insurance company that is prepared to follow these rule changes.
Choose Wisely: The Best Health Insurance Company Is…
It’s not easy to compare health insurance companies. You need to make sure that you know what your medical needs are now and in the near future.
You can then compare the benefits of different plans, along with the total costs of health care.
Hopefully, you learned how to choose a health insurance company that fits your needs. For more tips to better your health, head over to the Health section.