Health Insurance Basics: Beginners Guide To Health Insurance

Health insurance is a type of insurance coverage that pays for your medical expenses. The same way that auto insurance covers the expenses incurred in a car accident, health insurance covers medical or surgical costs you suffered from sickness or injury. Health insurance also covers preventive care and basic services to help you avoid getting sick.

HEALTH INSURANCE OVERVIEW

Often, health insurance only covers part of your medical expenses. It’s set up in such a way that you pay for your own medical expenses up to a certain point called the out-of-pocket limit. Once you reach the out-of-pocket limit, your health insurance kicks in and pays for your health-related expenses.

There are different ways that health insurance companies might share medical costs with you. You need to be aware of and understand these major features of your health insurance plan: your deductible, copayment, coinsurance, and out-of-pocket limit.

Health insurance plans must offer the set of services included in the ten essential health benefits. In addition to these essential health benefits, there are affordability standards and other rules that a health insurance plan must meet so that it can be offered in health insurance exchanges run by the government. Health insurance plans that are not sold on government-run exchanges or marketplaces are called off-exchanges plans. Covering the ten essential health benefits and meeting other standards set by the federal government are required for off-exchange plans to be considered qualifying health coverage. These standards and requirements have provided consumers with protection. Health insurance regulations have also addressed loopholes that caused financial problems for insurance policyholders and beneficiaries in the past.

Through 2018, under the Affordable Care Act (colloquially known as Obamacare), an individual mandate required all individuals to have minimal qualifying amount of health insurance coverage. Those who failed to meet the requirement of the individual mandate had to pay an additional fee on their federal tax return. The calculation for this penalty was made in one of two ways: 2.5 percent of your household income or $695 per adult and $347.50 per child under 18. You would have paid whichever of the two computations was higher.

As of 2019, the individual mandate has been suspended. There is currently no law requiring individuals to have qualifying health coverage.

HEALTH INSURANCE IS FOR EVERYONE

Everyone should buy health insurance. It is too risky not to have health insurance coverage for medical expenses. Paying for medical bills out of pocket is one of the leading causes of consumer debt and related financial difficulties.

If you’re considering buying health insurance, you might fit into one of the following groups. We’ve added a few other factors that you should consider when choosing for health insurance that fits your needs:

PURCHASING A POLICY FOR A FAMILY MEMBER

You should know that different kinds of deductibles apply to your health insurance coverage. There are family deductibles and individual deductibles for each member of your family. When an individual meets their own deductible, their health insurance plan kicks in and covers only their medical expenses. Family deductibles, on the other hand, are cumulative. Each family member’s contribution to the deductible counts. Once the deductible is met, any member of the family can enjoy the insurance benefits.

PURCHASING A POLICY IF YOU ARE A STUDENT

A provision in the Affordable Care Act allows you to stay on a parent’s health insurance plan as a dependent until you reach the age of 26. So as long as they allow you to be part of the plan, you don’t have to buy your own health insurance. It would also be wise to check if your university offers health insurance plans. This could be a more affordable option for you. However, if you attend a school out of state, your parent’s plan’s network may not work where you are.

PURCHASING A POLICY IF YOU BELONG TO A LOW-INCOME SPECTRUM

People in a low-income spectrum have the option to know if they qualify for Medicaid. This public insurance aims to cater to the needs of the individuals and families belonging to the low-income sector.

The people who belong in this sector have income from 100 percent to 400 percent of the federal poverty line. These people are granted a subsidy from the health insurance marketplace, letting pay insurance fees within their means.

There is nothing more important than peace of mind. Insurance coverage is one of the most important things an individual must secure. A severe unanticipated health issue can be devastating and detrimental to your existing savings. With a policy, you only have to pay a small amount of money for a wide scope of coverage. It can protect you from spending huge costs out from your pocket during illnesses and accidents.

PURCHASING A POLICY IF YOU ARE A VETERAN

A veteran in the U.S. has the option to be covered by the government through the U.S. Department of Veterans Affairs (VA). The policy itself comes with coverage for health concerns.

This policy can be tied-up with health insurance from a private organization, so the privacy policy can complement the VA if there is certain coverage that the latter lacks.

PURCHASING A POLICY IF YOU ARE PREGNANT

Pregnancy qualifies pregnant women to switch insurance coverage or enrolls to a different plan. This consideration intends to cater to the needs of pregnant women without them worrying about the fees during their entire pregnancy.

In line with this, all qualifying health insurance plans cover pregnancy and childbirth-related services. These services are covered even if you become pregnant before your coverage starts.

Aside from these independent policies from private companies, you can also take advantage of the Medicaid and CHIP for maternity care and childbirth. You only have to be qualified for the said government insurance plans.

PURCHASING A POLICY IF YOU ARE A SENIOR CITIZEN

In the US, all citizens who are above the age of 65 automatically qualify for Medicare. This federal program is a sincere initiative to cater to the needs of the elderly population, assuming that they have no employments to depend on.

They can also take advantage of the Medicap, which is supplemental insurance that assists in paying deductibles, copayments, and coinsurance. Although this independent insurance has genuine intentions, one must still think about it and know its nature and benefits before purchasing one. After all, even if it only acts as a compliment, it still has a cost that needs to get paid.

Based on Materials from Policy Genius

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