Do you need a Health Plan? This question doesn’t drive to your mind often when you are young and healthy. But at the onset of any disease, illness or accident you start to go crazy finding ways to meet your health expenses. Recently April 7th was World Health day and many of pharmacies, hospitals and clinics had advertised their health discounts and different discount packages for diagnostic and lab tests for men, women, kids and senior citizens.
On talking with health insurance agents you will seem to just flow away with his talks as he creates a scenario where you find yourself drowning in the ocean of illness, or finding yourself dead and wanting that your family receives immediate benefit upon your demise. Many institutions like banks try to sell private health policies and will make you purchase some health insurance plan and ask you to pay a hefty premium annually and in return will give you a cashless card to use for your hospitalization and other such medical needs.
All things said and done one thing is inevitable that in course of your span of life you do will have some kind of medical need if not any serious illness like dental, eye, maternity and other such kind of general medical expenses to bear. So that means “Yes” you need a medical or health insurance. But what is health insurance, what kind of health plan is that you need and what things you should look for before buying any such health policy? Let us understand in detail.
So what is Health Insurance?
Health insurance is a type of insurance coverage that covers the cost of an insured individual’s medical and surgical expenses. Depending on the type of health insurance coverage, either the insured pays costs out-of-pocket and is then reimbursed, or the insurer makes payments directly to the provider.
In health insurance terminology, the “provider” is a clinic, hospital, doctor, laboratory, health care practitioner, or pharmacy. The “insured” is the owner of the health insurance policy; the person with the health insurance coverage. In countries without universal health care coverage, such as the USA, health insurance is commonly included in employer benefit packages and seen as an employment perk.
Is health insurance coverage a human right or just another product one can buy?
In some countries, such as the United Kingdom or Canada, health care coverage is provided by the state and is seen as every citizen’s right – it is classed along with public education, the police, firefighters, street lighting, and public road networks, as a part of a public service for the nation.
In other countries, such as the USA, health insurance coverage is seen somewhat differently with the exception of some groups, such as elderly and/or disabled people, veterans and some others, it is the individual’s responsibility to be insured. More recently, the Obama Administration has introduced laws making it mandatory for everybody to have health insurance, and there are penalties for those who fail to have a policy of some kind.
How to start to move towards health insurance?
Now that you know that health plan is important and you will need to meet your medical expenses at one point of your life it is advisable to start early that means when you are young start to plan about your health.
- Compare the health plans that are available for you and then choose the right one accordingly. If you start early to go for health insurance you fill find wide range of plans to select from. But if you are planning late in your mid life or even at old age there are plans for you that you can benefit from.
- Do not get confused by looking at so many plans on health. Shop the one after seeking advice from your doctor, previous health plan holder, or a wise man. Educate yourself on all of the options available keeping in mind the premium you need to pay for it, what the plan offers you in return, deductibles or out of pocket expenses or any thing such that you might need to know.
- Determine the networks of different plans. By doing this you will come to know which doctors and hospitals are covered under this plan. If you need a particular doctor for your health ask that doctor which health insurance networks he or she is included in. As an alternative, you can search the specific online directories for each plan you’re looking at later to see if your doctors are listed. Also the network in the health plan should cover large network of doctors.
- If you are a professional and working for your employer then you know that most of you get health insurance through your employer. If your employer is providing you with health insurance then you do not need any government insurance exchanges or market places to search for. So if your employer already offers health insurance you may not qualify for premium subsidies, which lower monthly costs in exchange plans.
- Those without employer-provided insurance should look to the Affordable Care Act marketplaces for health insurance. Several states run their own marketplaces, and the federal government runs the insurance exchange for everyone else.
- Head over to the federal marketplace, HealthCare.gov and type in your ZIP code. The site will redirect you to a state website, for US citizens and if you live in Australia just visit here to find the right plan for yourself. Find the list of plans according to state and choose accordingly.
- You can also purchase insurance through a private exchange or through an insurer’s website. If you choose one of these options, you will not be eligible to receive premium subsidies, which are tax credits that work as discounts to your monthly premiums.
- Deciding on a premium budget that is how much per month you can spend on health insurance, consider your regular monthly expenses and your typical health expenses. Since lower premiums often mean higher out-of-pocket costs, the cheapest plan available may actually prove very expensive if you access lots of health services throughout the year.
- Try to estimate how much you spent last year in total on health care, including premiums and out-of-pocket expenses. If you expect to have similar expenses this year, try and choose a plan with similar premiums, co pays and deductibles.
- Also if you want to expand your health coverage choosing a plan with a higher premium, could save yourself a lot of money on out-of-pocket costs if you need frequent health care or expensive procedures. With such planned medical expenses like maternity expenses, you need a surgery or a organ transplant or replacement you can choose to have the most comprehensive insurance that you can afford.
- Ok now if you cannot afford to go for very high premium, consider a high-deductible health plan with a health savings account, or HSA. An HSA can help you save money for health expenses, which you can withdraw to pay medical bills later, untaxed, but you have to have a high-deductible plan to qualify for one. Such plans generally have lower monthly costs. If this sounds like a good option for you, consider how much you can save per month by going with a lower premium, and plan to contribute those savings to your HSA.
Types of health insurance plans
Once you’ve decided what you can afford, now determine a plan structure, which will, in part, determine your plan’s network.
If you’re buying from your state’s Marketplace or from an insurance broker, you’ll choose from health plans organized by the level of benefits they offer: bronze, silver, gold, and platinum. Bronze plans have the least coverage, and platinum plans have the most. If you are under 30, you may also be able to buy a high-deductible, catastrophic plan.
How are the plans different?
Each one pays a set share of costs for the average enrolled person. The details can vary across plans.
- Platinum: covers 90% on average of your medical costs; you pay 10%
- Gold: covers 80% on average of your medical costs; you pay 20%
- Silver: covers 70% on average of your medical costs; you pay 30%
- Bronze: covers 60% on average of your medical costs; you pay 40%
- Catastrophic: Catastrophic policies pay less than 60% of the total average cost of care. Catastrophic plans must also cover the first three primary care visits and preventive care for free, even if you have not yet met your deductible.
Four Types of Plans
Each insurance brand may offer one or more of four common types of plans most commonly come as HMOs, PPOs, EPOs, or POS plans. Which type of plan you choose will help determine your costs and which doctors you can see. The type of plan should be included in the plan’s title and on the plan summary of benefits, which should be available online to help you compare plans. A link to the summary is usually near the plan’s title and cost on any online marketplace, and access to a provider directory should also be nearby. If you’re going through an employer, your boss’ insurance representative should have this information.
1. HMO (health maintenance organization)
Good for you if you want lower out-of-pocket costs and a more guided health care experience.
What doctors you can see: Any in your HMO’s network. If you see a doctor who is not in the network, you’ll have to pay the full bill yourself. Emergency services at an out-of-network hospital must be covered at in-network rates, but non-participating can doctors who treat you in the hospital can bill you.
What you pay:
- Premium: This is the cost you pay each month for insurance.
- Deductible: Your plan may require you to pay the amount of a deductible before it covers care beyond preventive services.
- Copays and/or co-insurance for each type of care.
Paperwork involved. No claim forms.
2. PPO (preferred provider organization)
Best for you if you want more provider options and no required referrals.
What doctors you can see. Any in the PPO’s network. You can see out-of-network doctors, but you’ll pay more.
What you pay:
- Premium: This is the cost you pay each month for insurance.
- Deductible: Some PPOs may have a deductible. You will likely have to pay a higher deductible if you see an out-of-network doctor.
- Copay or coinsurance: A copay is a flat fee, such as $15, that you pay when you get care. Coinsurance is when you pay a percent of the charges for care, for example 20%.
- Other costs: If your doctor charges more than others in the area do, you may have to pay the balance after your insurance pays its share.
Paperwork involved. There’s little to no paperwork with a PPO if you see an in-network doctor. If you use an out-of-network provider, you’ll have to pay the provider. Then you have to file a claim to get the PPO plan to pay you back.
3. POS (point of service) plan
For those who want more provider options and a more guided health care experience.
What doctors you can see. You can see in-network providers your primary care doctor refers you to. You can see out-of-network doctors, but you’ll pay more.
What you pay:
- Premium: This is the cost you pay each month for insurance.
- Deductible: Your plan may require you to pay the amount of a deductible before it covers care beyond preventive services.You may pay a higher deductible if you see an out-of-network provider.
- Copays or coinsurance: You will pay either a copay, such as $15, when you get care or coinsurance, which is a percent of the charges for care. Copayments and coinsurance are higher when you use an out-of-network doctor.
Paperwork involved. If you go out-of-network, you have to pay your medical bill. Then you submit a claim to your POS plan to pay you back.
4. EPO (exclusive provider organization)- Plan that you want lower out-of-pocket costs but no required referrals
What doctors you can see: This varies depending on the type of plan — HMO, POS, or PPO
What you pay.
Premium: It has the lowest premium compared to other plans.
Paperwork involved. The amount of paperwork varies, depending on whether you get care from a PPO, HMO, or POS plan. Keep all your receipts so you know when you’ve met your deductible.
The Two broad types of health insurance or health coverage
Private health insurance – the CDC (Centers for Disease Control and Prevention) says that the US health care system is heavily reliant on private health insurance. 58% of Americans have some kind of private health insurance coverage.
Public (government) health insurance – for this type to be called insurance, premiums need to be collected, even though the coverage is provided by the state. Therefore, the National Health Service (NHS) in the United Kingdom is not a type of health insurance – even though it provides free medical services for its citizens, it does not collect premiums – it is a type of universal health coverage.
Examples of public health insurance in the USA is Medicare, which is a national federal social insurance program for people aged 65+ years as well as disabled people, and Medicaid which is funded jointly by the federal government and individual states (and run by individual states), SCHIP which is aimed at children and families who cannot afford private insurance, but to not qualify for Medicaid. Other public health insurance programs in the USA include TRICARE, the Veterans Health Administration, and the Indian Health Service.
Why referrals and networks are a big deal in health plan?
Plans using referrals like HMO and POS require you to see your primary care physician before you can schedule a procedure or visit with a specialist, and because of this extra visit requirement, many people prefer other plans.
If you’ve got the list of networks your preferred doctors gave you, eliminate any plans they don’t take. If you don’t have a preferred doctor, you’ll probably want a plan with a large network so you’ll have more options to choose from. If you live in a rural community, a large network is especially important. Remember health insurance isn’t very helpful if it covers no doctors in your area.
Also eliminate any plans that don’t have in-network doctors in your area, and those with very few options compared to other plans.
How much you will have to pay out of pocket for certain health services?
When choosing a plan you also need to look at the scope of cost sharing. Any plan’s summary of benefits should clearly lay out how much you’ll have to pay out-of-pocket for certain services. The federal marketplace website gives a snapshot of these costs for comparison, as do many state marketplaces.
As a consumer your portion of costs consists of the deductible, co-pay, and coinsurance. Many people confuse a deductible with total out-of-pocket costs. However, it’s that second number that will determine the maximum you will pay for care in addition to premiums.
As there are options in what plans cover you need to narrow down choices based on out-of-pocket cost sharing.
When do you need a plan with low out-of-pocket costs
- You see a doctor, such as a specialist, on a regular basis
- You frequently need emergency care
- You take expensive or brand-name medications on a regular basis
- You are expecting a baby, plan to have a baby, or have small children
- You have a planned surgery coming up
- You’ve recently been diagnosed with a chronic condition such as diabetes or cancer
When do you need a plan with higher out-of-pocket costs
- You cannot afford a plan with lower out-of-pocket costs
- You are in good health and rarely see a doctor
- You rarely participate in activities with a high risk of injury
Also compare the plans and see them offering wide scope of services. Some may have better coverage for things like physical therapy or mental health care, while others might have better emergency coverage.
After all your mind blowing exercises you have finally chosen the right plan for you and your family. Now just go to websites of health insurers and ask them any other queries you still might need to know about your health related issues and their coverage, your travel health insurance or any drugs that are covered in any plan. Look for the documents needed before signing and buying of any health plan. Also it is your choice to shift to another better health plan you find best suits you anytime closing your old plan and having the more suitable benefits that you need.
— Ani Shakarishvili,MD (@AniShakari) October 14, 2015