It can be a maze that health insurance must wade through, with so many terms, acronyms, and options it can be overwhelming at first glance. Whether you are a new customer and need to learn more about health insurance coverage or are looking to change companies, you’ll want to be informed about the features of health insurance coverage, the different plans, and how to choose the right coverage for you.
This post will discuss health insurance basics for you so you know what you need to know and answers to all of your “health insurance 101 worksheet answers” and more common questions. You’ll have a better idea what health insurance is, and which one is right for you and your family by the time you finish reading this guide.
What is Health Insurance and Why Do You Have To Have It?
Health insurance covers everything needed for doctor’s visit, hospitalization, medication, surgeries, and more. Health insurance – like your car or home insurance – can help you financially safeguard against sudden medical bills that would otherwise leave you in deep debt and poor.
Without health insurance, medical bills can a real financial drain. A hospital stay or an emergency surgery for instance can easily run into the thousands of dollars. The risk is taken out by health insurance which pays a certain percentage of those costs. Health insurance covers hospital treatment, physician care, medications, medical equipment, and even preventative health services like annual exams and vaccinations, depending on your plan.
The bottom line: health insurance is your lifeline.
Understanding Health Insurance Terminology
You can start by gaining an understanding of what kinds of health insurance plans are available by getting to know some common words you’ll see on policies before you begin the journey:
Rate: How much you pay per month to stay covered with your health insurance.
Pre-tax deductible: The cost you incur before your insurance kicks in.
Copay: A recurring cost when you see a doctor or are treated.
Coinsurance: How much you pay in medical expenses once you hit your deductible.
Limit on total out-of-pocket: The amount you will pay in a year before your insurance reimburses you 100% of any added expense.
Types of Health Insurance
You can have health insurance in several different ways. These may be different depending on where you work, your age, your income and where you live. Let’s talk about the most widespread health insurance plans.
1. Employer-Sponsored Health Insurance
There are many people who are covered by their employer for health care. Employee-based health insurance tends to be comprehensive and less expensive than individual coverage. This is because if you are a group worker, your employer will be paying for your insurance, saving you money.
Key Benefits:
- More affordable premiums
- Access to broader coverage options
- Lower likelihood of a denial on coverage due to prior illnesses.
2. Private and Family Health Insurance Plans
Without employer insurance or working independently, you can buy a personal health insurance policy. You can purchase these plans via the Health Insurance Marketplace (under the Affordable Care Act) or from insurance companies such as SummaCare directly.
Key Benefits:
- Specialized coverage for you.
- Flexibility in plan selection
- Can get family plans include your spouse and kids?
3. Medicare Advantage Plans
Medicare Advantage plans are made for those who qualify for Medicare (usually seniors). They are more comprehensive than Medicare and can provide extras such as dental, vision and prescription drug benefits.
Key Benefits:
- Expanded benefits beyond original Medicare
- Lower out-of-pocket costs for services
- Added coverage for certain needs.
4. COBRA Health Insurance
COBRA (Consolidated Omnibus Budget Reconciliation Act) gives employees a short-term extension on employer-based health insurance if they lose their jobs, get divorced or do other qualifying actions. But COBRA isn’t cheap, as you’ll have to foot the entire bill, not just the portion your employer had paid for before.
Key Benefits:
Retention of coverage after a qualifying event.
You don’t have to reapply or underwrite again.
5. Medicaid
Medicaid is the government’s assistance for people who are poor, children, pregnant women, seniors and those with disabilities. States make eligibility determinations, and the federal government and states pay for the program.
Key Benefits:
Low-cost or free healthcare coverage
Public services to the people who require them.
Health Insurance Plans and Benefits – Know All About It!
When shopping for a health insurance coverage, know what kinds of plan structures there are. These plans are priced differently, they cover different situations and they are flexible.
Preferred Provider Organization (PPO)
Flexible PPO plans are among the most known. These plans are good for seeing both in-network and out-of-network providers, but out-of-network care will cost you more. PPOs don’t always call in specialists for appointments.
Key Benefits:
- Broad access to healthcare providers
- No referral to specialists needed.
Health Maintenance Organization (HMO)
HMOs have a smaller network of doctors and most likely you have to pick a PCP. : You’ll need a referral from your PCP to specialists. It’s usually cheaper in terms of premiums but for most services you have to stay in the network.
Key Benefits:
Lower premiums compared to PPOs
Preventive Care and Primary Care Management: Prioritize prevention and care management.
Health Maintenance Point of Service (HMO-POS)
It is a cross between a PPO and HMO plan. HMO-POS plans will cover outside the network care, but usually more than your local provider. ) Your PCP might also refer you to a specialist.
Key Benefits:
Flexibility to use out-of-network providers
Lower costs for in-network services
Evaluating Your Health Insurance Plan
When deciding between health insurance plans, think about the following:
Coverage: Are you just needing coverage or are you special for long-term illness or treatment?
Networks of Providers: Be sure to check whether the doctors, specialists and hospitals you want are on the network.
Prices: Take into account premiums and out-of-pocket expenses like copays, coinsurance, and deductibles.
Flexibility: Are you looking for an open plan with access to more specialists and outside providers or are you okay with the limited plan at a lower premium?
In-Pocket Costs: How to Know What You Need To Know.
You have to be aware of the out-of-pocket expenses before you enroll in a health plan. You’ll have to consider premiums, deductibles, copays and caps.
Premium: The single monthly amount you are billed.
deductible: How much you have to pay out of pocket before your insurance kicks in.
Copay & Coinsurance: Charges you’ll incur while getting medical care after your deductible is met.
When to Buy Health Insurance
There are enrollment periods for health insurance. It’s your Open Enrollment Period (OEP) when you can enroll in or cancel your plan. Miss OEP and you will not be able to get it until the next cycle unless you have a Special Enrollment Period (such as married life or the birth of a child).
Key Open Enrollment Periods:
Medicare: 15th of October to 7th of December.
Plans: Individual and Family: November 1 – December 15
Employer-Sponsored Plans: Varies by employer
20 Health insurance 101 worksheet short Question & answers
1. What is Health Insurance?
Answer: Health insurance is a contract that one enters into with an insurance company, which one pays monthly in return for medical coverage.
2. Why is health insurance important?
Answer: Medical insurance keeps you away from costly expenses because it covers a certain or the full amount of your medical bills, from doctor’s visits to hospital stays, medicines, and so on.
3. What are the typical health insurances?
Answer: Employer Group Plans: Provided by employers usually for employees and their families.
Individual and Family Plans: Not included with employer insurance but also part of the Affordable Care Act.
Medicare Advantage: For people who qualify, more coverage than Medicare.
COBRA: No-job-related coverage health insurance for a limited time.
4. Premiums in health insurance?
Answer: Premiums are what you pay each month to your insurance company for coverage even if you don’t use the services.
5. What is a deductible?
Answer: The deductible is the money you have to fork over to receive healthcare before insurance kicks in.
6. What is coinsurance?
Answer: Coinsurance is the amount of your medical bills that you cover after your deductible, usually until your out-of-pocket maximum.
7. What does “in-network” mean?
Answer: “In-network” means hospitals and clinics who are contracted with your insurance company to treat you at a reduced rate.
8. What are out-of-pocket costs?
Answer: Excess: Out of pocket premiums, deductibles, copayments, and coinsurance that you incur for covered services.
9. What is an out-of-pocket maximum?
Answer: Out-of-pocket maximum is the total amount you will be paying for healthcare services in a year. Once we are, 100% of the remaining costs will be paid by your insurance company.
10. When is Open Enrollment Period for Health Insurance?
Answer: Open Enrollment for individual and family health insurance usually occurs between November 1 & December 15 every year. Medicare has its own period from 15 October to 7 December.
11. What is a PPO plan?
Answer: You can see both in- and out-of-network physicians with a PPO, which gives you more choice because of how flexible you are (although the service is more expensive in-network).
12. What is an HMO plan?
Answer: You’ll pay less for an HMO plan but use a network of doctors and refer specialists from your PCP.
13. What is a copayment (copay)?
Answer: A copayment is a fixed cost you pay for a healthcare service covered by your insurance plan (such as a visit to the doctor) after you have met your deductible.
14. Which is the best health insurance coverage?
Answer: Consider costs, coverages (hospital, prescriptions), network of providers, and your health goals to determine the plan that works for your budget and health goals.
15. What is Medicare Advantage Plan?
Answer: Medicare Advantage (Part C) covers things other than Original Medicare such as dental, vision and sometimes gym passes for a lower out-of-pocket expense.
16. But what is “go out of network”?
Answer: When you go out-of-network, that is when you use a doctor that is not contracted with your insurance company and that will be more expensive.
17. What is COBRA?
Answer: You can have your former employer’s health insurance for a short period of time (18-36 months) after you lose your job under COBRA, but you have to pay the full price.
18. So what is a health insurance broker for?
Answer: A health insurance broker can let you know about available plans and help you pick the coverage you need at the price you’re willing to pay.
19. What is a Health Savings Account (HSA)?
Answer: An HSA is a tax-free account where you put away money for medical bills when you are covered under a high deductible health plan (HDHP).
20. Preventive care and health insurance: What are the pros and cons?
Answer: Most health insurance plans provide check-ups, vaccinations, and screenings at no cost to you so you’re caught in a healthy state early.
Summary: How to Pick the Right Health Insurance Plan.
Health insurance is a crucial aspect of covering oneself against any last minute medical expenses. Getting to know which health insurance policies exist, what they cover, and what all the terms mean is important to your final choice.
Whether it’s an employer plan, an individual policy or government coverage (such as Medicaid or Medicare), be sure to compare all the plan’s pros and cons so you can find what is right for you and your budget.
With these things in mind, you can comfortably move through the world of health insurance and find the policy that’s right for you as a consumer and for your health.
