You might already have a health insurance policy and are wondering more about how your coverage works. Or perhaps you're still considering getting medical coverage for the first time. Either way, there's always plenty to learn about health insurance, including how to find the right coverage, how much it costs, why you might need it, and more.
If you're still in need of a health insurance policy, a local independent insurance agent can help you find one. Your agent can shop and compare plans and pricing from multiple top-rated carriers who offer coverage in your area. But first, use our guide to find answers to some of the web's most frequently asked questions about health insurance.
Table of Contents
Q. What Is Health Insurance?
Q. What Does Health Insurance Cover?
Q. How Does Health Insurance Work?
Q. Why Is It Important to Have Health Insurance?
Q. How to Get Health Insurance
Q. Is Health Insurance Required by Law?
Q. How Much Does Health Insurance Cost?
Q. Is Health Insurance Tax-Deductible?
Q. What Is a Health Insurance Deductible?
Q. How Much Does Health Insurance Cost an Employer?
Q: Why Work with an Independent Insurance Agent?
What Is Health Insurance?
Health insurance is a type of coverage that can protect you from the full expense of regular healthcare, as well as the costs of medical and surgical procedures, prescription drugs, and more. In exchange for paying a premium, your insurance company will cover the costs of your healthcare and certain types of medical procedures. The amount of coverage you have for various expenses depends on the type of plan you purchase.
Health plans may be available from your employer, but you also have the option of purchasing healthcare coverage privately. If you're self-employed or unemployed, you may have group insurance options through professional associations, in addition to private health insurance. A local independent insurance agent can help you find the right medical insurance regardless of your employment status.
What Does Health Insurance Cover?
Health insurance can cover a variety of things, from routine checkups and family care to major medical expenses. The types of services that are covered vary with different healthcare providers and plan types, so it's important to determine your needs before selecting a specific health insurance plan. Even if you have partial coverage for a certain type of healthcare, you may not have full coverage that provides 100% reimbursement.
Physician office visits are one of the most common things that health insurance covers. Other common covered services include hospital room and board, emergency room visits, and inpatient substance abuse treatment.
Some specialty services, which you might expect to be covered, such as chiropractic care and MRIs, may not actually be covered by your plan. However, most routine preventive services are covered in full or have a small copay.
Some health insurance policies cover vision services and surgeries, but not all. Also, you can typically expect to have to pay at least a portion of your medical care, regardless of the plan you have. Typically, there's an out-of-pocket expense, through a copay, coinsurance, or a deductible.
Make sure that you know what your policy covers, whether all of your family members are covered, and how much of your healthcare will be paid for by your insurer. Some health insurance policies, like HMOs (health maintenance organizations), only cover procedures performed by professionals in a designated network. On the other hand, a PPO (preferred provider organization) plan allows you to choose your provider and pay based on that provider’s preferred status.
How Does Health Insurance Work?
Health insurance can help you pay for your regular healthcare costs as well as major medical expenses, depending on the type of plan you choose. You will pay a premium either monthly or annually, based on your plan and coverage, whether you get your health insurance through your employer or privately. Depending on your type of plan, you may have copays, deductibles, and coinsurance that you're also responsible for paying for yourself. Here's a breakdown of these costs:
- Co-payments: With a co-payment, the insurance company agrees to pay for a service, but you must cover a preset cost, such as $20. This cost applies every time you schedule a service that has an assigned co-pay. Co-pays can be lower or higher depending on the plan or according to the service provided.
- Deductibles: A deductible is the amount of money that you're required to pay before your insurance begins to cover services. Normally, you must either meet a deductible or pay a co-pay before getting reimbursed.
- Coinsurance: Some policies have coinsurance, which requires you to pay a certain percentage of services rendered. Your coinsurance may be an amount you pay in addition to your co-pay and may apply towards your deductible.
Choosing the best plan really depends on your personal circumstances. An independent insurance agent who specializes in health insurance can help you navigate the many options and find the most sensible and affordable medical plan for your needs.
Why Is It Important to Have Health Insurance?
Health insurance helps you to manage the costs of your family's care, including regular doctor's visits and unexpected illnesses and injuries. Just one serious illness or an emergency procedure can have dire financial consequences if you aren’t insured properly.
Health insurance coverage may be expensive, but if you compare your premiums to the cost of surgery and other medical procedures you might have to pay for out of pocket, healthcare insurance premiums may actually be far cheaper in cost. Also, having adequate health insurance can help you afford to get regular checkups that you may have skipped while uninsured, which can potentially lead to a longer, healthier life.
Medical insurance policies often cover preventive care, which can help you manage your health proactively. Also, covered routine testing can help with early detection of common conditions and diseases, such as diabetes, heart conditions, and thyroid problems, which can require much more extensive and costly care if left untreated.
In contrast, if you're uninsured, you’re usually less likely to visit the doctor. The cost of a routine examination for the uninsured can be costly and can be a disincentive to take charge of your health.
How to Get Health Insurance
When you begin to search for health insurance, you can look in the private market or through your state's healthcare exchange. For those who are new to the process, it can be overwhelming.
Start by assessing your needs. If you’re prone to illness, play high-impact sports, or have a risky profession, it may be better to have a co-pay plan rather than one with a high deductible. If you have children, the plan that's most beneficial to you may be different from the ideal plan for someone who is single with no kids. If you have a favorite doctor, make sure that physician is listed as “in-network” if you opt for an HMO.
You also need to consider your budget and whether a plan that involves coinsurance or higher deductibles makes the most sense for you. By assessing your needs and comparing plans, you can find an affordable healthcare policy that meets your needs.
Is Health Insurance Required by Law?
Most states don't require you to have health insurance by law. Double-check the local laws in your area to be certain. However, even if health insurance isn't technically required, having a policy can help you financially recover from unexpected major medical costs. You'll need to evaluate your overall health and budget to determine if having health coverage makes the most sense for you.
How Much Does Health Insurance Cost?
The cost of health insurance depends on several factors. Costs vary based on your plan type, whether you have insurance through an employer or private insurer, what state you live in, and the rate of your out-of-pocket expenses. Additionally, if you purchase your coverage through the healthcare exchange, you may qualify for government subsidies based on your household income.
The average cost of health insurance this year is $590 per month for policies from the Affordable Care Act marketplace. With some plans, you will pay these premiums entirely out of pocket, and for others, the majority of premiums are covered by an employer.
You can adjust your premium rate based on your coverage amounts as well as your deductible amount. If you need more affordable healthcare but aren’t sure where to start, you can shop for a low-cost plan with the help of an independent insurance agent.
Is Health Insurance Tax-Deductible?
Health insurance is often tax-deductible if you're self-employed or have a health savings account. If you're self-employed, the premiums you pay for health insurance for yourself and your dependents can often be deducted from your taxes. If your dependents are covered under another insurance plan, you cannot deduct that premium.
A health savings account (or HSA) is used in conjunction with a high-deductible health plan. You typically must buy these plans from an employer, although they're also offered through private insurance companies. Any amount of money that you contribute to your HSA account, up to a certain limit, is tax-deductible.
What Is a Health Insurance Deductible?
A deductible is the amount of money you're required to pay out of pocket before your insurance begins to provide coverage. For example, you might have a deductible of $5,000 for your health insurance policy. That means that you'd have to pay this amount on your own before your healthcare coverage would begin providing reimbursement for covered medical services.
Deductibles renew each year, and most preventive care services, such as annual gynecological appointments and routine age-appropriate testing, are often covered in full regardless of whether you've met your deductible amount.
You can save a lot of money on your monthly premiums by choosing a plan with a high deductible. Just be sure you have sufficient funds set aside to pay your healthcare costs in the event you need major medical care.
How Much Does Health Insurance Cost an Employer?
If you're receiving health insurance benefits through your work, be aware that while the costs may seem high when they're deducted from your paycheck, your employer is likely paying about three times as much as you are toward your premiums. The Affordable Care Act requires all employers with at least 50 full-time employees to provide them with subsidized affordable healthcare coverage.
Some people feel their employer's policies lack adequate coverage and may want to look for health insurance in the private market to compare costs. If your employer doesn't provide health insurance as part of your benefits package, you can still qualify for subsidized coverage by purchasing your insurance through your state's healthcare exchange or marketplace. There, you will find several different insurance plans with varying degrees of coverage.
Why Work with an Independent Insurance Agent?
An independent insurance agent is your greatest ally when it comes to finding the right health insurance for you. Your agent has access to multiple health insurance companies, so they're free to shop and compare medical coverage plans and premium rates for you to find the best deal. And down the road, your agent can assist you with filing health insurance claims and updating your coverage when necessary.
Sources
https://www.cigna.com/employers/insights/informed-on-reform/employer-mandate
https://www.forbes.com/advisor/health-insurance/how-much-does-health-insurance-cost/
