Why Do I Need Health Insurance?
It is important to get health insurance for yourself and members of your immediate family. Insurance helps to protect you from high health care costs, especially those related to chronic medical conditions or the need for hospitalization.
You should get health insurance for the same reason that you have auto insurance or homeowners insurance - to protect your savings and income.
How Do I Get Health Insurance?
Depending on your age, job status, and financial condition, there are many ways that you can get health insurance, including:
- Health insurance provided by an employer. Most large companies in the U.S. provide health insurance as an employee benefit. You may be required to pay some portion of the monthly premium, or cost of the health insurance.
- Health insurance that you purchase on your own. If you are self-employed or work for a small company that does not provide health insurance, you will need to buy it on your own.
- Health insurance provided by the government. If you are 65 or older, disabled, or have little or no income, you may qualify for health insurance paid for by the government, such as Medicare and Medicaid.
If you have no health insurance or health insurance that is not adequate, you will be responsible for paying all your health care bills. The Patient Protection and Affordable Care Act signed into law in March 2010 assures that all Americans who need coverage will be able to get health insurance.
Starting in 2014, you will be able to purchase health insurance in a health insurance exchange that will be available in all states. At that time, health insurance companies will not be allowed to impose any pre-existing condition limitations. However, until 2014, the recommendations below will continue to be valid.
- Your state may have a program that pays for part of your monthly health insurance premium, depending on your income and family size.
- Your community may have a free clinic or community health center that will provide healthcare services free of charge or at a reduced fee.
How Do I Choose a Health Plan?
There are many factors to consider when choosing health insurance. These factors may be different if you are choosing one of several employer health plan options or buying your own health insurance.
Employer Health Insurance
If your employer offers health insurance, you may be able to choose among several health insurance plans. Most often, these plans include some type of managed care plan, such as a health maintenance organization (HMO) or a preferred provider organization (PPO). If you choose an HMO, the plan will only pay for care if you use a doctor or hospital in that plan's network. If you choose a PPO, the plan will usually pay more if you get your health care within the plan's network. The PPO will still pay a portion of your care if you go outside the network, but you will have to pay more.
Your employer may offer a number of different health plans that cost more or less depending on the amount of out-of-pocket costs you have each year. These costs may include a copayment each time you see your doctor or get a prescription filled as well as a yearly deductable, which is the amount you pay for healthcare services at the beginning of each year before your health insurance kicks in.
In general, a plan that requires that you use a network provider, has a high deductable, and high copayments will have lower premiums. A plan that allows you to use any provider, has lower deductibles, and lower copayments will have higher premiums.
If you are young, have no chronic disease, and lead a healthy lifestyle, you may consider choosing a health plan that has high deductibles and copayments-you are unlikely to need care and your monthly premiums may be less.
If you are older and have a chronic condition (such as diabetes) that requires many doctor visits and prescription drugs, you may consider a health plan with low deductibles and copayments. You may pay more each month for your share of the premium, but this may be offset by less out-of-pocket costs throughout the year.
To learn more about your health plan options, meet with a representative of your human resources department or read the materials supplied by the health plan. If both you and your spouse/partner work for companies that provide health insurance, you should compare what each company offers and choose a plan from either company that meets your needs.
Private Health Insurance
If you are self-employed, your employer does not provide adequate health insurance, or you are uninsured and do not qualify for a government health insurance program, you can buy health insurance on your own.
You can buy health insurance directly from a health insurance company, such as Blue Cross, through an insurance agent who represents an insurance company, or online from reliable companies (such as ehealthinsurance). Consult with your insurance agent who may be able to help you find health insurance that fits your needs.
Since cost is often the most important factor when choosing a health plan, your answers to the following questions can help you decide which plan to purchase.
- How much is the monthly premium?
- How much will I have to pay before the health plan kicks in?
- How much is the copay for doctor's visits and prescription medications?
- If I choose a PPO, how much will I have to pay if I use doctors or hospitals outside of the PPO's network?
- Is there any limit on how much the health plan will pay for my care in a year - am I protected from large medical costs?
Other factors that may be important to you when choosing health insurance, are:
- What health services are not covered?
- If I have a medical condition (such as diabetes) will the health plan provide coverage immediately or do I have to wait six months or more? Starting in 2014, the health reform legislation will prevent health plans from deny coverage for a pre-existing condition.
- Does the health plan have a drug formulary that includes the medications I use?
- Is my doctor in the health plan's provider network?
Do your homework before you buy any health insurance policy! Make sure that you know what your health insurance plan will pay for... and what it will not.