Introduction to Health Insurance

Trying to determine which health insurance plan for you can sometimes be confusing.  Here we explain what health insurance is and how it works. 

There are many types of insurance plans and depending you’re your unique needs, we can help you narrow down your options.

Health insurance (sometimes called health coverage) pays for some or all of the cost of the health services you receive such as doctors’ visits,

hospital stays, and visits to the emergency room. It helps keep your health care costs predictable and affordable. You may have to pay several

different amounts for health insurance:

1. You will generally pay a premium, a monthly fixed payment to the insurance company.

2. You may have to pay a deductible. This is a fixed amount that you pay out of pocket before your health insurance begins to pay for your health services.

3. After you have met the deductible, you and your insurance company typically share the cost of covered health services. Your insurance pays most of the cost first, and then you pay the remaining cost. The amount that you pay is either a copayment (a fixed amount) or a coinsurance (a percentage of the cost of the service).

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Types of Health Insurance

There are many types of Insurance Plans and premiums range based on the type of plan selected.  For instance, the premium for an HMO may be less than a PPO.  Basically, the more flexibility in the plan the higher insurance premium and/or co-pay for services.  The plans are a type of Managed Care with specific goals of keeping its members healthy with an emphasis on prevention.  We will outline the different types of plans below:
 

1. Health maintenance organizations (HMOs) provide health insurance coverage for a monthly or annual fee. An HMO limits member coverage to medical care provided through a network of doctors and other healthcare providers who are under contract to the HMO. These contracts allow for premiums to be lower than for traditional health insurance.  HMO plans require that participants first receive medical care services from an assigned provider known as the primary care physician (PCP).

2. A Preferred Provider Organization (PPO) is a medical care plan in which health professionals and facilities provide services to subscribed to clients at reduced rates. PPO medical and healthcare providers are called preferred providers. PPO participants are free to use the services of any provider within their network. Out-of-network care is available, but it costs more to the insured. In contrast to a PPO, HMO plans require that participants receive healthcare services from an assigned provider. PPO plans usually have deductibles; HMOs usually do not. Both programs allow for specialist services. However, the designated primary care physician must provide a referral to a specialist under an HMO plan.

3. A Point-Of-Service (POS) plan is like an HMO in that it requires a policyholder to choose an in-network primary care doctor and get referrals from that doctor if they want the plan to cover a specialist’s services. A point-of-service plan is also like a PPO in that it still provides coverage for out-of-network services, but the policyholder has to pay more for those services than if they used in-network providers. The premiums for a POS plan fall in between the lower premiums offered by an HMO and the higher premiums of a PPO. POS plans require the policyholder to make co-pays, but in-network co-pays are often lower than PPO’s. POS plans traditionally do not have deductibles for in-network services, which is an advantage over PPOs. There are also combination HMO’s with a POS option with features of an HMO plan but with a POS Option.  These types of plans often require selecting a PCP and have out-of-network options with higher premiums for these types of plans than the traditional HMO’s and higher co-pays for doctors and hospital services.

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Why We Need Coverage

When people are in great health and living their best life, they may question whether they should have health insurance and may consider it an unnecessary expenditure. However, the unexpected healthcare cost of an accident or an illness can result in substantial financial losses far outweighing the premiums paid.  

Having health insurance can help you manage your health care needs, as well as costs. There are health plans for almost every type of situation.  Health insurance helps pay the costs for medical care that you or covered dependents receive. Without it, you may pay the full cost for all your care.  Finally, the opportunity cost (cost of not having health insurance) can result in financial burdens, increased debt, and in some cases delayed care due to the lack of insurance.  

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What does health care reform encompass?

The law has many goals for the uninsured.  In a nutshell, the goals of ACA are the following:

• To make health insurance more affordable. For example, by expanding cost assistance based on income to lower health insurance premiums and out-of-pocket costs and by expanding Medicaid to all adults based on income.

• Expand the Medicaid program to cover all adults with income below 138% of the federal poverty level. (Not all states have expanded their Medicaid programs.)

• Support innovative medical care delivery methods designed to lower the costs of health care generally through private insurance companies.

• To expand patient protections. For example, by stopping insurers from charging more for pre-existing conditions and setting dollar limits on care.

• To curb healthcare costs. For example, via regulations and taxes on those who benefit the most from healthcare reform like insurers and drug companies.

• To improve the quality of health insurance and healthcare. For example, by requiring essential benefits on all plans and rewarding hospitals for quality over quantity.  The law requires "essential health benefits" including:

  • Ambulatory patient services

  • Breastfeeding

  • Emergency services

  • Family planning

  • Hospitalization

  • Laboratory services

  • Mental health and substance use disorder services

  • Pregnancy, maternity, and newborn care

  • Prescription medications

  • Preventive and wellness services and chronic disease management

  • Pediatric services

  • Rehabilitative and habilitative services

In addition, the AffordableCare Act requires most insurance plans (including those sold on the Marketplace) to cover at no cost to policyholders preventive services. These include checkups, patient counseling, immunizations, and numerous health screenings.  Most notably, the healthcare reform protects individuals and families from being denied health insurance for pre-existing conditions, dependent children can remain on their parents’ plan until age 26 and annual dollar limits on out-of-pockets expenses for healthcare.

Get Started Today

Our agency can help you select a health care policy to both cover your needs and meet government requirements. Times of drastic change can be confusing. We are here to answer your questions and guide you to a viable solution. Complete the application quote form or contact us today to get started!