Health insurance plans must have the same basic coverage: hospitalizations and emergency room visits, physician services including office visits and preventive care, diagnostic tests like x-rays, prescribed drugs, mental heath, rehabilitation, and nursing home care. By law, patients with pre-existent medical conditions cannot be denied coverage nor can they be billed at a higher insurance premium rate.
There are several forms of health care financing available. They can be sorted out by answering the following questions:
Are you 65 yrs. old or more? Medicare is available to consumers in this age group. Medicare coverage and payment to hospitals and physicians is the same across the nation. Medicare enrollment is simple and can be done online. (See Medicare website).
Do you have low income? Medicaid covers low income consumers in every state. It can provide major health coverage, especially to mothers with young children. However, eligibility rules and payment programs vary from state to state. Therefore you must check with your local state government for details. (See Medicaid website).
Are you a military veteran? The Veterans Administration provides benefits to anyone honorably discharged from military service. The amount of coverage depends on individual circumstances. You can find information on VA.gov and get details at your local VA facility.
Does your employer provide health insurance? If you work full-time at such a company, you may have some form of coverage already and should get details from your employer. You will likely pay some of the health care insurance premium and possibly other out-of pocket costs. Your employer can provide the details. If you need more information see Healthcare.gov, and type “Employee Insurance” in the “Search” window.
If none of these options apply, you should shop for insurance through a federal or state-sponsored website. The websites will also help you determine if the federal government will pay some of your insurance costs. (See Healthcare.gov or healthinsurance.org to find the websites in your state.)
Private insurance is the term for those plans funded by employers or purchased by individual consumers. Several websites provide excellent information about purchasing private insurance: Consumer Reports and CMS.
If you are purchasing insurance on your own, you may qualify for federal subsidies to help you pay for health care coverage. These subsidies apply to those with low incomes. That information can be found when you enroll in one of the federal or state health exchanges.
Note: the state and federally supported exchanges have “enrollment periods” to sign up for insurance. No enrollment can occur after the deadline, except in certain circumstances.
We have also listed websites where agents or other parties offer access to insurance. These services can be useful in purchasing health insurance when the exchange enrollment has expired.
These are the key points you should know about private insurance plans:
Monthly Premium: Health insurance premiums are billed monthly. Like all insurance, the more the coverage, the higher the premium. The health insurance industry has begun to use deductibles to reduce premium costs. This arrangement resembles automobile collision insurance. In exchange for a lower monthly premium, the consumer can choose a higher deductible, and take the risk of paying for some of the initial costs of care. The deductibles have a limit (also called a “cap”), after which the insurance pays for the costs of care. The most common plans on the exchanges have been labeled as follows:
Gold Plan – high monthly premium and low total family deductible
Silver Plan – moderate monthly premium and moderate total family deductible
Bronze Plan – low monthly premium and high total family deductible Details of these plans vary by state and the choice of a plan is a personal decision. Health consumers who rarely see the doctor may choose bronze plans to keep their premiums low. Others with more frequent health needs may choose a higher premium to keep the deductible costs low.
It is important to compare the coverage details provided by each plan. “Co-Insurance” is the term for how much you will have to pay for a service. For example, 20% coinsurance for a procedure or office visit means that the insurance company only pays 80% of the cost. You pay the rest. Make sure you understand how much you will pay out of pocket for office visits, hospitalizations, procedures, diagnostic tests and medications.
There are no “bargains” in health insurance coverage. If you choose a high deductible plan, your monthly premium will be less, because you are taking some financial risk for medical bills. You must pay those bills up to the limit of the deductible before the insurance company provides any payment. If you choose a lower deductible plan, your monthly premium will be higher, but you will pay a smaller portion of any medical bills.
Hospitals have different prices for the same service. The “list” price is the charge to a “self-pay” (uninsured) patient. The “contracted” price is what an insurance company has negotiated for its clients. The “contracted” price is usually much lower than the “list price”.
For uninsured patients, some hospitals may to offer a discounted price. Hospital charges are often negotiable before or after services are rendered. Insured patients may still have to pay some of the hospital bill, depending on the type of insurance coverage they purchased.
Out-of-pocket costs are additional payments made by the patient at the time a medical service or product is provided. In effect, these payments are additional charges over and above the insurance premiums. Typical out of pocket costs are:
Co-Insurance: some insurance plans cover only a certain percentage of the medical cost. For example, insurance would pay 80% of the cost of a procedure and the patient would pay 20%.
Co-pays: These costs usually apply whenever a patient has a physician office visit or service or purchases a prescription. The prices are set by the insurance company and are collected by the provider or the pharmacy.
Out-of-Network Fees: Some insurance companies negotiate discounted prices with networks of doctors and hospitals. The insurer can then offer consumers lower premiums if they join such a network and use its services. However, if the consumer goes “out of network” for a non-emergency service, the insurance company pays more and usually passes this extra cost on to the consumer.
Deductibles are out-of-pocket costs that work like auto collision policies. For the year, a consumer must pay his/her medical costs up to the limit described in the insurance policy (the “deductible”). Once that limit is reached, the insurance covers any additional costs.
For example, for a procedure costing $6000, a patient with a deductible of $5000 would be charged that amount if he/she had contributed nothing to the deductible that year. However, if that patient had already paid $5000 into the deductible, the procedure would cost him/her nothing.
The services charged to the deductible can vary by insurance plan and may include prescribed drugs.
By law, the maximum annual limits for deductibles are $6600 for an individual and $13,200 for a family. This means that no individual must pay more than $6600 for the year and for the family, the sum of all annual health payments cannot exceed $13,200.