
The Essentials Of Health Insurance
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Aside from an insurance professional, nobody else finds essential health insurance exciting. A necessary evil? Sure! Something you have to research and make some decisions on? Absolutely! But fascinating and interesting? Probably not so much.
Aside from being a dry subject, most healthcare insurance material is peppered with industry jargon that makes people’s eyes glaze over before they get halfway down the page.
While there are many articles about different healthcare options, we have aggregated here the most essential health insurance options to be aware of. We have also included suggestions as to which plan fits any given situation best.
The short answer is – the one that fits your situation the best.
Typically you can choose from a few healthcare plans either provided by your employer or in the marketplace. The advantage of employer-sponsored plans is the employer paying for the majority (or sometimes entire) monthly insurance premium.
Two primary plans that employers often offer are HMO (Health Management Organization) and PPO (Preferred Provider Organization). HMO usually requires smaller copays and smaller (or no) deductibles making it ideal for those in good health who only need routine appointments. The disadvantage of the HMO plan is that you will need a referral to a specialist. The PPO plan allows you to see any doctors you choose without any referral requirements; however, these plans are usually more expensive. You will also need to pay higher copays and will likely have a bigger deductible before the coverage kicks in.
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According to the Kaiser Family Foundation, about 90% of all people in the US were insured in 2016. Even so, many enroll in their health plans without fully understanding what they are signing up for. There are many articles on the internet discussing the actual plans, and, usually, employers often set up informational meetings. However, rarely will these meetings address which plan is better for which situation.
Let’s start at the basics and talk about the plans that are available and which plan might be the best for you.
If you are a full time, salaried employee, your employer will most likely offer you enrollment in one of their sponsored plans. Some employers offer only one plan, while others give you a choice between a few. Your cost to enroll in an employer-sponsored plan is heavily reduced as your employer pays the majority (or all) of the monthly premium.
If you are eligible – enroll!
You will save a good chunk of change as opposed to purchasing an individual plan in the marketplace.
There are a few healthcare plans that you will encounter, and it is essential to understand how they work to make an informed decision:
If you are generally healthy and do not require a specialist – this may be the essential health insurance plan for you. It works great for those who just need routine, preventive appointments, and need insurance in the case of a sudden illness or an injury.
PPO’s are most advantageous to those who require specialized care or who have a preferred doctor that they really want to see and who might be out of network for an HMO plan.
Important! Any money left in FSA at the end of the plan’s yearly period will be lost. You can not withdraw the funds so you need to make sure to use it on approved medical expenses before the time runs out.
High Deductible Plan is gambling that you won’t get sick. If you get sick, let’s say with the flu and need to see a doctor, you will bear the full cost for the visits until you reach your high deductible.
A health insurance plan is an important decision as you are locked into it for a year. Some people avoid going to preventive checkups to reduce the out of pocket cost. While it will undoubtedly reduce the cost at that moment, it has the potential to cost you much more if you develop a serious health condition.
Whether you are purchasing your plan through the marketplace or your employer, review the plan definitions in detail. Being familiar with how they work is half the battle in making the right decision on a plan that will work best for you and your family.
If you want to keep your current doctor and are set on a PPO plan, make sure that your doctor is considered in-network. If they are not, are you willing to pay the extra cost associated with seeing an out-of-network provider? Will your doctor even accept your new insurance? PPO plans can include networks such as Blue Cross/Blue Shield, Aetna, Cigna, just to name a few.
When considering the health plans, compare the benefits and the costs (copays, deductibles, prescriptions).
Insurance Broker
As a former insurance broker for over 10 years, Olga has deep knowledge of insurance concepts and policies. She is passionate about helping others understand the insurance policies they are purchasing and find policies that suit their unique needs.
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