October is Health Literacy Month | Are You Prepared?
This month is health literacy month, and in honor of spreading health resources, we are breaking down the basics of health insurance.
Although some healthcare costs may be costly, it is important to understand why they are needed for healthy living. What are you paying for every month?
How To Get Health Insurance
What many people don’t know is how to get health insurance. Many people believe that their only outlet is though insurance companies, but that is not the case. There are many ways for you and your family to get health insurance in order to maintain a healthy life. Some of the many ways are:
- Through Your Employer – With health insurance from your employer, your choices will be limited.
- The Exchange – Healthcare.gov offers The Exchange, which is a place for you to search though plans that adhere to the Affordable Care Act.
- Independent Agencies – Independent agencies, like us, are a great way to get health care designed around your finances.
- In-Person Agents – is an in-person agent is a local health insurance broker in your area that will help you find the right insurance plan for your needs.
Types of Health Insurance Plans
HMO – An HMO, health Maintenance Organization, is a network of hospitals, doctors, and other caregiving services that you can choose from to get coverage. You typically work with a primary physician that refers you to other specialists for additional health care services.
HSA – A HSA, or Health Savings Account, is a tax-advantaged medical savings account available to taxpayers in the United States who are enrolled in a high-deductible health plan (HDHP). The funds contributed to an account are not subject to federal income tax at the time of deposit and can be used to pay for qualified medical expenses.
PPO – A Preferred Provider Organization or PPO is a network of caregivers, to choose from. Unlike HMO, you can use your PPO to see caregivers outside of the network, but at a higher cost.
High Deductible Health Plan – With this plan, you have a higher deductible amount at a lower monthly cost. This means that you could pay less at first, but if you have a serious injury or large medical expense, you could end up paying in full.
Fee-For-Service Pan – With a higher monthly payment, you are able to see whichever doctors or physicians of your pleasing.
Consumer-Driven Health Plan – This is a fund that your employer deposits a certain amount into annually.
Catastrophic Plan – This is a last resort type of coverage that is the lowest monthly cost. Policyholders pay thousands each year before the coverage even kicks in.
Payment Glossary
No matter which type of health insurance plan you choose, they all have cost-sharing methods in place. Here are some common types of shared-payment terms that you may encounter.
Premium – a premium is the monthly bill that keeps your insurance policy active. Depending on the type of health insurance you choose, this could be out of your pocket or your employers.
Co-Pays – A co-pay is a flat fee that you will have to pay when receiving a medical service. The amount of this payment is determined by the type of insurance coverage you have with your plan.
Deductibles – A deductible is the amount of out-of-pocket expense that you must meet before your insurance provider begins to pay. For example, let’s say you need your wisdom teeth pulled. Your health insurance deductible is $1,000 and the cost of the operation is $800. You will not have to pay anything for the procedure because you have not reached the total amount of your deductible yet.
Coinsurance – Coinsurance simply means that you will be responsible for a percentage of the cost of your medical procedures. Many insurance plans offer 80/20 coinsurance, which means that you take on 20% of the cost and your insurance plan covers 80% of the cost.
Flexible Spending Accounts – an FSA is a pre-tax deduction from your wages that can be applied to your health care services at any time.
We hope that this short, but comprehensive, guide has helped you find the right health insurance plan for your needs.
