Health insurance can be tremendously costly, and you may be wondering whether you even need it if you are significantly healthy and barely make trips to the doctor’s office.
However, everyone needs health insurance per the regulations of the Affordable Care Act. Besides the legal requirements, enrolling in a health insurance plan can save you from extreme medical debt in the case of an emergency. You can also treat minor illnesses or injuries before they escalate to life-threatening conditions through preventive care measures. Thankfully, there are a variety of plans available to you depending on your health condition. You want to make sure that you understand the costs of health insurance so that you choose the most cost-effective plan.
When weighing out your health insurance plan options, you want to make sure you are looking at the four main expenses that health insurance companies require. After understanding what these costs pay for, you will want to understand how they integrate depending on the health plan you choose. When comparing plans, make sure to inspect the following costs of each plan to make the best health care decision for you and your family:
Out-of-pocket costs are any payments you make during medical visits including payments toward your health plan’s deductible, copayments and coinsurance. Your health insurance company will not reimburse these payments. Monthly premiums are not included in out-of-pocket payments. You will have an out-of-pocket limit, meaning you will have a limit on how much you spend out-of-pocket a year. Once you meet your out-of-pocket limit, your insurance company will fully cover the rest of your medical costs.
There are services under the Affordable Care Act, such as preventative care, that are required to be covered fully by your health insurance company. However, there are still services with out-of-pocket costs. The following are some services that may have out-of-pocket costs:
If you need financial assistance for potential out-of-pocket costs, you may qualify for cost-sharing reduction. This reduction is a federal subsidy administered to provide discounts for any out-of-pocket costs you may have. Eligibility requirements include being ineligible for public coverage, like Medicaid, unable to receive employer-group insurance and having a gross income between 100 percent and 250 percent of the federal poverty level.
Health insurance costs fluctuate depending on the type of plan you choose. Sometimes options are limited if you get employer-based health insurance plans, but the costs of this insurance is cheaper than if you were to sign up for coverage outside of your workplace. In the Health Insurance Marketplace, the plan costs also vary under four metal categories – Bronze, Silver, Gold and Platinum. The type of plan you choose should be based on how often you plan to use medical services. If you have a pre-existing condition, such as diabetes, you will want to choose a plan with a higher premium because it will cover more of your medical expenses. If you are considerably healthy and do not take regular prescriptions, you will want to choose a plan with a lower premium and higher deductible. Although a lower premium pays a smaller portion of the cost of your care, you most likely will not need to cover as many medical expenses.
If you are considering a plan from the Health Insurance Marketplace, take a closer look at the four metal plans to decide which one is right for you. While some plans may cost more upfront, you may be saving more at a later time, depending on the condition of your health.
In a competitive job market, many companies offer group health insurance as a valuable form of compensation to recruit and retain their employees. In fact, companies with over 50 full-time employees are required by the Affordable Care Act to offer healthcare benefits. If they choose not to, they will face a tax penalty. However, many companies, both small and large, participate in a group health insurance plan because it is cheaper for all parties involved. When deciding between job opportunities, people should inquire about the type of health insurance benefits offered. They may be able to option out of their individual plans to be a part of an employer-group insurance plan that is cheaper for multiple reasons.
For starters, the health plan rates for each individual in an employer-group insurance plan is typically cheaper per person than individual plan rates. The premium cost is usually split between the employer and employee, unlike individual plans where employees pay their premiums in full. For the employer, any payment made towards health insurance is eligible for tax deductions.. Moreover, risk is spread out across the group, meaning group members are splitting the costs of the few who are at a higher risk and make more use of the benefits.