Health Insurance 101: Become An Expert to Save Healthcare Dollars
Medically reviewed on May 30, 2017 by L. Anderson, PharmD.
Do I Really Need Healthcare Insurance?
Absolutely. Health insurance is one of the most important purchases you can make. Health insurance will help pay for (or fully pay for) preventive and yearly well-care exams, trips to the doctor for acute illnesses like the flu or a broken bone, and longer-term coverage for chronic illnesses like high blood pressure.
In addition, major medical expenses such as surgery, hospitalizations, and rehabilitation are covered, as well as prescription drugs. Even with the new insurance laws, many people in the U.S. are still burdened by costly health insurance. The Affordable Care Act (ACA) may not be 'affordable' for everyone, especially those who do not qualify for credits. Health insurance reform is underway in the U.S., but the ACA is still in use.
What is the Marketplace?
Millions of individuals have enrolled in health insurance through the Marketplace. In fact, nearly one million more children have health insurance due to the ACA. What will happen with insurance coverage with the new Trump administration is up in the air; Congress continues to debate the issue.
Until otherwise notified, if you bought an insurance plan through the Marketplace, you can renew or change your plan each year in the fall, but don't miss the open enrollment deadlines (typically Nov 1 through Jan 31 each year). In most states if you don’t act to renew your coverage by December 15, the Marketplace will automatically renew coverage for you. You can call representatives at the Marketplace Call Center at 1-800-318-2596 for questions and to double check deadlines, as they are always subject to change from year-to-year.
Does the Marketplace Offer Medicaid or Other Insurance?
Yes. Medicaid and the Children’s Health Insurance Program (CHIP) are both offered through The Marketplace. Medicaid and CHIP provide either free or low-cost insurance to millions of Americans, including low-income families and children, pregnant women, the elderly, and people with disabilities. In all states, CHIP provides health coverage to children in families that earn too much to qualify for Medicaid.
You can apply for and enroll in this coverage at any time. Certain factors will determine if you qualify, such as your age, disability, the size of your family, and your household income.
The Trump Administration has proposed a new block grant system of Medicaid coverage that would be handled by the states, but this new proposal is in flux at the moment.
What Do the Terms 'Deductible', 'Copay', 'Coinsurance', and 'Out-of-Pocket Limit' Mean?
These terms describe the amount of money you’ll need to spend in addition to your monthly premium. A deductible, say $2000, is the amount of money you are obligated to pay each year before the insurance starts paying its share of costs for certain services.
A copay is a set amount you might pay for a service, for example, $25 to see the doctor each time; then your insurance pays the rest, at a contracted rate they've agreed upon with the healthcare provider. However, if you have a deductible, you may have to pay extra, say for lab work or X-rays; check with your insurance.
Coinsurance is a set percent of the cost of your care; for example, if a special X-ray costs $500, you might have to pay 20 percent, or $100. And don't forget, this might be after any deductible. Out-of-pocket limit is the maximum amount you would pay in one year before your insurance starts to pay 100% of your bills.
What is Covered in the Marketplace Health Insurance Plans?
Currently, coverage is comprehensive, but can be costly. All plans must cover the essential health benefits, including:
- Outpatient, wellness visits, chronic disease and emergency care
- Hospitalizations and surgery
- Maternity and newborn care
- Prescription drugs
- Rehabilitation and habilitative services and devices
- Laboratory services
- Mental health and substance use disorder services
- Pediatric care
Are Their Penalties If I Do Not Sign Up for Health Insurance?
Health insurance is to your benefit, and that of society, to help prevent illness. While it can be a significant monthly cost, it is to your advantage - and your family - to get health insurance, either from the Marketplace or your employer. However, some people choose not to obtain insurance or simply can't afford it in any way.
For 2017 taxes, the individual mandate penalty was waived on the IRS form.
What Should I Do If I Already Have Health Insurance?
You probably do not need to do anything. Many Americans have group health insurance through their employer or are covered by government-funded programs such as Medicaid, Medicare, or the Children's Health Insurance Program (CHIP). If you have group health insurance through your employer, you can compare your monthly marketplace premium with that of your employer, but most likely your employer group plan will be a better deal. However, situations change, and the number of adults with employer-provided insurance has been steadily decreasing in recent years.
Marketplace insurance can provide needed coverage when gaps occur. Keep an eye on how Congress and the Trump Administration may alter healthcare insurance in 2018.
How Much Insurance Can I Afford?
Even with the Marketplace, health insurance may be unaffordable for many people. It’s important to think about how much health care you need, what you can afford, and what coverage makes the best sense for you. Plans with higher benefit coverages and lower copays are going to be more expensive. If you have many chronic conditions, it might make more sense for you to have greater coverage.
If you are young with few, if any, health conditions, a less comprehensive, but less expensive plan with higher deductibles and copays might be a better option.
However, if you have limited income the ACA may provide tax credits to help make your insurance more affordable. Don't forget about Medicaid and CHIP.
How Much Does Insurance Cost in the Marketplace?
Prices vary in the Marketplace. Plan categories are labeled as Bronze, Silver, Gold or Platinum, and the category you choose will affect the total amount you will spend for health benefits. Platinum plans require the lowest level of copays or coinsurance, but the monthly premium will be higher. The less expensive plans, such as the Bronze plan, require more out-of-pocket costs for members but have lower monthly premiums. The Gold and Silver plans fall somewhere in the middle.
The percentages the plans will pick up, on average, towards your health costs are 60% (Bronze), 70% (Silver), 80% (Gold), and 90% (Platinum). But remember, more coverage means higher premiums. Less expensive plans may be a better deal for the young and healthy with few healthcare needs. However, the ACA may be very beneficial for young adults who need healthcare.
I’m Always Having to Sign Papers About Privacy. What is HIPAA?
HIPAA is the acronym for Health Insurance Portability and Accountability Act. HIPAA is a federal legislation passed by Congress in 1996, and is designed to preserve health insurance coverage for you and your family if you should change or lose your jobs. HIPAA also includes security and privacy standards to help protect your personal health information, such as your medical records, and avoid misuse or unauthorized reporting to others without your explicit written permission.
You also have the right to request your medical records from your doctor or lab test results right from the lab. It is your legal right to see your health information. No one should ever deny you access to your personal health records.
How Can I Save Money on My Prescriptions?
Prescription drugs make up a costly segment of healthcare. But lowering your drug bill can improve the likelihood of taking your medicine as prescribed, and lower your overall healthcare costs.
How to do this? Use a generic drug when you can; they are less expensive, with lower copays, but do the same job. Research your medicine copays or costs on your insurance website or give them a call.
Don't be afraid to talk to your doctor, pharmacist or insurance company about drug costs and what you can afford; there are usually many options from which to choose. Ask about medication assistance programs and free samples, too. Do NOT buy drugs off of the Internet; they can be unsafe, expired or even illicit.
What is Medicare? Do I Sign Up For This On the Marketplace?
Medicare is a health insurance program funded by the U.S. government through taxpayer contributions. You are typically eligible for Medicare if you are over 65 years of age. Medicare isn’t part of the Marketplace, so you don't replace your Medicare coverage with Marketplace coverage. In fact, if you have Medicare, you don’t need to do anything with the Marketplace during Open Enrollment periods.
There are 4 parts to Medicare: in general, Part A covers hospital-type expenses; Part B covers outpatient care; Part C (Medicare Advantage) is from a private insurance company that covers both Part A and Part B; and Part D covers prescription drugs. You must have at a minimum Medicare Part A to be considered covered under the Affordable Care Act without having to pay a penalty.
How Do I Know if I Qualify for Medicaid?
As mentioned, Medicaid is a government-funded health care program for low-income citizens. Over 60 million Americans are covered by Medicaid. You qualify for Medicaid by meeting certain limits for income and assets, and by fitting into a specific category, such as blind, disabled, child, pregnant woman, or the unemployed. Limits are set based on family size and income.
For example, in 2017 if you make less than roughly $20,420 for a family of three, you would be eligible for Medicaid assistance as noted by the Kaiser Family Foundation. You may also qualify for credits and out-of-pocket assistance in the Marketplace. Rules and limits do vary among states, so check within your local area for specific limits.
As the Trump Administration sets new rules for Medicaid in the future, all of these specifics are subject to change drastically.
How Does High Deductible Insurance Work?
High deductible health insurance is one option your employer may offer to lower your premium cost (the amount you spend to purchase your insurance).
Here's how it works: you pay a lower annual premium, but your insurance may not fully kick in until you've met your deductible which may exceed $4000 or more per family. Usually, well care exams and preventive procedures like mammograms or a colonoscopy will still be covered.
High deductible health care plans may come with a health savings account card that allows you to save pre-tax money specifically for healthcare expenses. Be sure once you hit your deductible that all costs are covered. These plans might be good for young families with few health issues.
Overview: Questions to Ask Before You Buy Health Insurance
Healthcare insurance is important, but can be expensive. Many Americans are concerned about higher costs with the ACA Marketplace. Questions to ponder before buying:
- What coverage do you really need? Can you afford a higher deductible to save money on premiums?
- Would it be beneficial to start a health savings account with a high deductible plan instead of paying high premiums?
- Have you compared different plans in the Marketplace, and if you need help, have you called?
- How much are the plan premiums and what are your out-of-pocket costs?
- Are you sure your family is not eligible for Medicaid or CHIP if you have no ability to pay for insurance?
Finished: Health Insurance 101: Become An Expert to Save Healthcare Dollars
- Kaiser Family Foundation. Medicaid Income Eligibility Limits for Adults as a Percent of the Federal Poverty Level. Jan. 1, 2017. Accessed May 30, 2017 at http://kff.org/health-reform/state-indicator/medicaid-income-eligibility-limits-for-adults-as-a-percent-of-the-federal-poverty-level/
- Nearly 1 Million More Kids Have Health Coverage After Obamacare. May 11, 2016. Drugs.com. Accessed May 30, 2017 at https://www.drugs.com/news/nearly-1-million-more-kids-have-health-coverage-after-obamacare-61224.html
- Healthcare.gov Accessed May 30, 2017 at https://www.healthcare.gov/
- Kaiser Family Foundation. For Consumers: Understanding Health Reform. Accessed May 30, 2017 at http://kff.org/understanding-health-insurance/
- Kaiser Family Foundation. Health Reform FAQs. Accessed May 30, 2017 at http://kff.org/health-reform/faq/health-reform-frequently-asked-questions/
- Obamacare Facts. Federal Poverty Level Guidelines. Accessed May 30, 2017 at http://obamacarefacts.com/federal-poverty-level/