Shopping for the right health insurance policy can be a complex process that raises more questions than answers. What is a deductible? What is the difference between copayment and coinsurance? How does the Affordable Care Act (ACA) influence my decision on buying the right policy for my unique healthcare needs?
Let’s discover the answers to some of the most frequently asked questions concerning health insurance.
Why Should I Buy a Health Insurance Policy?
Even if you are young, exercise daily, and follow a nutritious diet, you should invest in a health insurance policy to take care of unexpected medical expenses. Let’s say you slipped and fell on an ice patch and the accident caused a broken wrist. Do you have the kind of cash to pay off the costly medical bills that include diagnostic tests, treatment programs, and physical therapy sessions? Buying a health insurance policy cushions the financial blow caused by an unexpected medical event.
How Do I Buy Health Insurance?
You have five primary options for getting health insurance coverage. Where you turn for health insurance depends on your monthly budget and unique healthcare needs.
Employer-Sponsored Plan
An employer-sponsored plan offers you health insurance and in many cases, an employer pays some, most, or all of the monthly premiums. You might have to take care of copayment and/or coinsurance costs, but you should save money by paying lower premiums.
Agent/Broker
You have the option of purchasing your own health insurance policy, which you do by going through an intermediary such as an agent or broker. Shopping for your own health insurance policy provides you with more flexibility because you customize the benefits.
Learn more in:
- Benefits of Working With a Health Insurance Broker vs. Agent
- 6 Benefits of Using a Health Insurance Broker
Marketplace
As a part of the ACA, the federal government has established a website where you can shop for the health insurance plans offered by insurers that participate in the open marketplace. The website allows you to compare the costs, features, and benefits of each plan from one convenient digital location.
Medicare
When you turn 65 years old, you qualify for a federal safety net program called Medicare. You have choices for the types of coverage that work best for you, but not as many options as you do when you buy your own policy through an agent or broker. Medicare premiums typically are lower than the premiums charged for private plans.
Medicaid
Financed by federal, state, and local taxes, Medicaid helps eligible low-income Americans afford health insurance. The elderly, pregnant women, and Americans with disabilities also might qualify for Medicaid coverage.
What is the Difference Between Deductibles, Copayments, and Coinsurance?
The one thing that deductibles, copayments, and coinsurance have in common is each type of health insurance feature requires out-of-pocket payments in addition to paying a monthly or annual premium.
Deductible
A deductible is an out-of-pocket expense that you pay before your health insurance coverage kicks in to provide financial support. For example, if you require a medical procedure that costs $2,000 and your annual deductible is $1,000, you must pay the first $1,000 to cover the cost of the medical procedure. Your health insurance policy pays for the other $1,000 of the medical bill.
Copayment
Also referred to as a copay, a copayment represents the fixed fee you pay every time you make a routine visit with your healthcare provider. Common types of copayments include prescription medications and annual physical examinations. A copayment applies even if you have not reached the limit on your annual deductible.
Coinsurance
Coinsurance is the percentage of costs that you pay for covered health insurance after you meet your annual deductible. Let’s assume you received treatment for an injury that costs you $4,000. You have an annual deductible of $1,000 and a coinsurance feature that requires you to pay 20 percent of the remaining medical bill. The $1,000 deductible reduces your $4,000 medical bill to $3,000 and with 20 percent coinsurance, you pay another $600 to reduce the health insurance plan’s financial liability to $2,400.
When Can I Change My Health Insurance Policy?
Most buyers of health insurance policies can change policies or change the conditions of a current policy one time a year. When you can change your health insurance plan depends on the type of plan you have purchased.
Individual Plan
You can change an individual plan on the date when the plan expires. However, you should be proactive and make the changes before the plan’s expiration date to ensure you do not lose health insurance coverage.
Employer-Sponsored Plan
Your employer should send you information a few weeks before your current plan expires about how to make changes to your current plan or buy a different employer-sponsored health insurance policy.
Marketplace Plan
Buying a health insurance plan on the ACA marketplace gives you a limited amount of time to make changes to your plan. Open enrollment usually runs from mid-November to early January, although if you face a qualifying life event, you can change your policy to accommodate the change in your life.
Get Answers to Your Top Questions and Find the Right Plan With Insurance Broker Hub
Understanding the top health insurance questions can help you choose the right policy for your unique healthcare circumstance. It pays to have someone in your corner who can help you find the right answers.
Shopping for insurance used to be confusing and time-consuming. But with the help of our national network of licensed brokers, it doesn’t have to be. Insurance Broker Hub has helped over 10,000 consumers find the coverage they need at a price they can afford.
Our free service gives you access to an independent network of national brokers who have the experience and expertise to design a plan around your needs and budget. Ready to get started? Simply request a no obligation health insurance quote here.
