One of the biggest concerns that Americans have is the rising cost of healthcare and health insurance premiums. In 2017, it cost the average family more than $19,000 just for health insurance coverage.
On top of that, people are shocked when they’re hit with huge medical bills that insurance didn’t cover. You can avoid that fate and lower your health insurance premiums by understanding health insurance basics.
Your health and your health coverage have a direct impact on your financial health. Read this health insurance 101 to discover the basics of health insurance and how you can get the best coverage.
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Understanding Health Insurance Plans
About 96% of Americans don’t understand health insurance basics. That lack of understanding is why so many people suffer financially as a result when they get medical bills.
What are the basics that you need to understand? The terms that you should understand when you evaluate health insurance plans are the deductible, co-pay, and premium.
The premium is the amount of money that your health insurance costs. This is usually paid on a monthly basis, either by you, your employer, or both.
The deductible is the money you pay out-of-pocket for medical expenses before your health insurance contributes to your medical payments. Typically, health insurance plans with a low premium have a large deductible.
A co-pay is the amount of money you pay for certain services. A regular doctor’s visit might have a co-pay of $20, while an emergency room visit costs $200.
Health Insurance Options
With the cost of health insurance skyrocketing, many people wonder if health insurance is worth it at all. Unless you’re in perfect health and won’t get into an accident that needs emergency care, it is worth it.
You’d have to pay for your health insurance out of pocket, which can cost thousands of dollars. That leads many people to go bankrupt.
The thing to remember is that health insurance is affordable if you know where to go and you know what your needs are. Here are some of the ways you can get health insurance coverage.
Most Americans have health insurance through their employer. It’s one of the reasons why so many people are reluctant to leave their jobs. Employers will provide group insurance plans, which can lower the overall costs of health insurance premiums.
Employers are struggling to pay for health insurance coverage for all employees, so these costs are likely to be shared between you and your employer.
If you don’t have an employer, but you’re married, you may be able to get insurance through your spouse’s employer. This is becoming less common because employers are struggling to keep up with the increase in health insurance costs, too.
They may only cover the employee, or they may cover couples that are married, but not partners. It’s always good to check what your options are before you make a decision.
What do self-employed people or people who can’t get coverage through their employers do? Thanks to the Affordable Care Act, there is an option.
The Healthcare Marketplace offers affordable insurance options thanks to tax credits that are applied towards your premiums. You can only apply during the enrollment period, but there are exceptions if you had a major life change.
You apply, and according to your income, you’re given a set of plans to choose from and the amount you can receive in tax credits. You choose your plan from a private insurance company. You get the coverage you need, you pay your share of the deductible, and the tax credits take care of the rest.
The catch is that if your income increases beyond your initial estimate, then you may have to pay those tax credits back with your next tax return. If you overestimate your income or your income drops, you may get a tax refund.
If you have little to no income, you may qualify for Medicaid health insurance. This is government-sponsored health insurance that will give you basic health insurance coverage at no cost.
How to Choose Health Insurance
Now that you have a basic understanding of health insurance, you can start shopping for insurance plans. You need to start by knowing what your medical needs are.
Think of all of the prescription drugs, doctor’s appointments, and types of treatments that you want and need. There may be some providers like chiropractors and acupuncturists that you want to visit. Some plans will cover these services.
If you need mental health assistance, you want to be sure that a therapist is covered under your plan. You may also need dental or vision coverage, too.
If there are doctors that you already work with, you have to make sure that they are in an insurance company’s network. An out-of-network doctor can cost a lot more.
As you evaluate plans, you want to look at the entire cost of health insurance coverage. Too many people only look at the monthly premium and go with a plan that they can afford. The problem with that is they wind up with too little coverage.
Take the time to look at the co-pays, out-of-pocket costs, the monthly premium, and the coverage. When you add up the entire cost of health insurance and your coverage, you make a much smarter decision for you and your family.
Health Insurance 101: Insurance Basics for Financial Health
Health insurance is necessary, but the costs make it difficult to afford. The alternative is to go without coverage and hope that you stay in good health.
If you want to get the right health insurance plan, you need to know the health insurance basics. This health insurance 101 guide took you through the steps to ensure that you have the coverage you need and peace of mind. Your finances will be in better shape because you won’t have a huge medical bill.
Do you want more health insurance tips? Read this informative article that tells you how to get health coverage if you can’t afford it.