According to data collected by the healthcare information and advice website Verywell Health, many employees may not have cause for concern. Their employers pay about 83% of total health insurance costs.
In the absence of company sponsored coverage, those who do not have access to it must shop around and pay the full premium. This raises the question: where can they find the best affordable health insurance policy?
How does health insurance in the US work?
health insurance is designed to offset the cost medical treatment. It does this by paying a portion of professional and hospital costs. HealthCare.gov is the government’s online health insurance exchange. This type of coverage is available in a variety of forms to meet the needs of policyholders. They are:
- Exclusive Provider Organization : This is an organized care plan that covers services only if doctors, specialists or hospitals are part of the network.
- Health Maintenance Organization: A health insurance plan that limits coverage to doctors who are either contracted or employed by the HMO. In general, policies do not cover care outside of the network except in emergencies. A plan may also require that the policyholder lives or works in the service area of its plan to be covered. HMOs are known to provide integrated health care with a focus on wellness and prevention.
- Point-of-Service (POS) : This type of plan allows policyholders to pay less when they use doctors, hospitals and other healthcare providers that are part of the plan’s provider network. POS coverage requires that the insured obtain a referral to see a doctor from their primary physician.
- Preferred provider organization (PPO) This health plan offers policyholders the option to pay less for their healthcare if they opt to receive treatment from doctors and hospitals in the network of this plan. They can, however, access doctors, providers, and hospitals outside the network, without a prescription, for a fee.
There are four types of health insurance plans, based on the cost split between the policyholders and insurers. According to HealthCare.gov, these are Bronze, silver, gold, and platinum, also known as “metal tiers”. Here is how the costs are divided.
- Bronze – 60% health insurer, 40% policyholder
- Silver – Health insurers 70%, policyholders 30%.
- Gold – 80% insurers, 20% policyholders
- Platinum – 90% insurers, 10% policyholders
The agency stated, however, “[that] the category [has] nothing to with [the]quality of care.”
What is covered by health insurance?
The Affordable Care Act has brought about a number of changes to the healthcare system in the United States, including the standardization and uniformity of insurance benefits. Before this, insurance benefits varied widely between policies. US health insurance policies are currently required to cover 10 “essential benefits” consisting of the following:
- Ambulatory Patient Services
- Emergency Services
- Hospitalization
- Pregnancy and maternity care
- Services for mental health and substance abuse disorders, including behavioral health treatment
- Prescription drugs
- Rehabilitative and habilitative devices and services
- Laboratory Services
- Services for prevention and wellness and chronic disease management
- Children’s services including dental and vision care
Also included are coverage for birth control and breastfeeding. Adults can also get dental and eye care benefits, which are optional. Medical management programs are also available.
How do health insurance costs vary?
HealthCare.gov states that insurance companies are only allowed to take into account five factors in determining the premiums for healthcare laws. These are:
- Age : Premiums for older people can be three times as high as for younger people.
- Location : Health insurance rates are affected by differences in state and local regulations as well as competition.
- Tobacco Use: Insurance companies can charge smokers up to 50% higher than non-smokers.
- Individual enrollment vs. Family enrollment Insurance providers may charge more for plans that cover a spouse or dependents.
- Plan Category: Different plan categories, such as Bronze, Silver, gold, and platinum, also affect premium prices.
On the government’s website, it was noted that states could limit the impact of these factors on insurance rates. However, they were prohibited from incorporating medical history or gender into premium calculations.
HealthCare.gov explains that insurance companies cannot charge different prices to women and men for the same policy. They also cannot take into account your medical history or current health. “All health plans must cover pre-existing medical conditions as soon as coverage begins.”
Where do you find the cheapest health insurance?
MoneyGeek, a personal fintech firm, says that even if an employer’s coverage isn’t an option, many Americans can still get cheap health insurance. Here are a few of them:
1. Medicaid
According to the firm Medicaid is the best option for those who can afford it, but they must meet eligibility requirements that vary by state.
The government-funded health insurance program provides free or affordable coverage for low-income families and individuals. In 38 states, income is the only qualification. The standard cut-off for eligibility is 133% of federal poverty level, which is approximately $17.774 per individual. The income limit increases with the size of a household. The income limit is the same in almost all states except Alaska and Hawaii.
MoneyGeek has compiled a table that shows the Medicaid eligibility limits for households of different sizes.
| Size of the household | Income-level cut-off | Alaska cut-off | Hawaii cut-off |
|---|---|---|---|
| 1 | $17,774 | $22,204 | $20,452 |
| 2 | $24,040 | $30,043 | $27,655 |
| 3 | $30,305 | $37,881 | $34,859 |
| 4 | $36,570 | $45,719 | $42,062 |
| 5 | $42,835 | $53,558 | $49,266 |
| 6 | $49,100 | $61,396 | $56,470 |
| 7 | $55,366 | $69,235 | $63,673 |
| 8 | $61,631 | $77,073 | $70,877 |
Alabama, Florida Georgia, Kansas Mississippi, North Carolina South Carolina South Dakota, Tennessee Texas Wisconsin and Wyoming impose additional criteria including being over 65 years old or having a child as guardian.
Medicaid plan holders are entitled to free emergency healthcare, family planning and child health care. They may have to pay copays, depending on the state they live in and their income level, for hospitalization, prescription medications, and doctor’s visits.
How can you build wealth with life insurance?
2. Health Insurance Marketplace
The state-run health insurance marketplace in their state is a good place for many Americans with low incomes to begin their search for the right policy. They can compare coverage and cost, as well as get answers to questions they may have regarding healthcare insurance. They can also find out if their income qualifies them for Medicaid, tax credit, or lower rates. The marketplace allows parents to enroll their children in the Children’s Health Insurance Program.
Open enrollment is a period of time when individuals can enroll in a health plan. This usually runs from November 1 to January 15. Even if the open enrollment period is over, individuals may still qualify for coverage if they’ve experienced a qualifying event in their life, such as getting married, having children, or losing their prior insurance. The coverage begins two to six week after enrolling.
3. Medicare
Medicare is a government-funded health insurance program that offers the best coverage for US citizens and permanent residents over 65. This program is available to people of all ages with disabilities, as well as those who have end-stage kidney disease (ESRD), or permanent kidney failure requiring dialysis or a donor.
Medicare is divided into four sections:
- Medicare part A (hospital insurance).: Covers inpatient hospitalizations, skilled nursing facilities, hospice care and some home healthcare.
- Medicare Part A (Medical Insurance): Pays for outpatient care and medical supplies.
- Medicare part CÂ : This plan combines the benefits and services of Parts A and C into one.
- Medicare Part d (prescription drug coverage): This covers the cost of most prescription medications, including vaccines and shots.
The government offers the first two components, and private insurers can offer the final two.
4. Short-term health insurance plans
Short-term plans are intended to cover temporary gaps in coverage and offer protection for up one year. As a result, the benefits offered are less comprehensive than those of other policies. The short-term plan can be cancelled at any time without penalty fees.
As these plans are not regulated, they vary greatly in terms of benefits, coverage, exclusions and premiums. The coverage includes emergency and preventative health care, as well as physician visits. Prescription drugs may be covered by some plans. Pre-existing conditions are not covered.
The insurance company may require applicants to fill out a medical questionnaire in order to determine if coverage should be granted.
