Choosing the right health insurance policy for your needs can be quite complicated. One should bank on sound insurance advice from experts and compare plans before actually making the choice.
While many Americans get their health insurance through work, millions of people individually signed up for health care plans through the government website last year, as reported by Centers for Medicare & Medicaid Services.
For starters, getting cheap health insurance online is tough. Healthcare in the US is expensive, to say the least. People are known to file bankruptcy to cover their costs to treat cancer and other major medical circumstances. Self-employed people are the worst hit, as any kind of financial distress bleeds over into their profession or business, risking their financial security in the long run.
Here are some health insurance tips from experts that one should consider before buying a policy:
1.Know the basics of health insurance
It is essential that health insurance shoppers who are new to the market rely on guidelines of their workplace or known experts to exercise control over their expenditure for health insurance. A health insurance literacy survey revealed that less than 5% of respondents could define common terms about health insurance that impact the policy costs negatively.
Awareness about these terms is highly essential to know the amount that you pay for health protection, annually. Here are some terms that you should know:
- Premium: Your premium is the amount you pay to the health insurance company each month to maintain your coverage.
- Deductible: Your deductible is the amount you must pay for covered services before your health insurance begins to pay.
- Copayment: Your co-pay, or copayment, is a flat dollar amount you will pay your healthcare provided for a covered service.
- Coinsurance: Co-insurance is the percentage of allowed charges for covered services that you’re required to pay.
- Maximum Out-of-pocket maximum: An out-of-pocket maximum is the maximum amount of money you will pay for covered services during a benefit period (for example, over the course of a year).
- Subsidy: Government paying on your behalf for health insurance like Obamacare
2.How do you choose a health insurance plan?
For choosing the right health insurance plan, you cannot rely on your HR department for your choices or let them choose on your behalf. You can choose a private policy during Open Enrollment that runs through a specific period during the year. Insurers are not keen to have healthy people buying health insurance only when they need it and skimp on payments for the rest of the year.
- If you do not elect health insurance during the enrolment period, you could shop during the special enrollment period, when their coverage changes. So if you are choosing a plan after you left your job and doing it for the first time, you can get a private policy.
- You can choose different plans after marriage or when you are blessed with kids, to introduce new changes to your policy to expand your coverage needs. But you need to keep paying premiums without fail, throughout the year, or else, you cannot drop and choose a private plan.
- You can choose to buy on-exchange (through govt. sponsored sites) or off-exchange plans (through independent marketplaces). For availing subsidies though, you need to choose an on-exchange site. Else, you can compare and choose health insurance plans online through off-exchange sites.
- Study up on the high-risk health insurance and Medicare supplement insurance plans during the shopping process so that you do not regret your choices later.
- Figure out your spending budget for you and your family. The average American spends nearly 5% of annual income to pay premiums for health insurance, excluding out-of-pocket expenses.
- You need to decide on the benefits of the insurance plan that you need as a priority – verify your doctor is in the network and choose the plan that best aligns with your needs.
3.How can you save on health insurance?
You certainly do not have to bust your budget to get adequate healthcare coverage. Here are some factors and health insurance tips to save on money on these plans.
- Subsidies – If you earn between 100% and 400% of the amount stipulated in the poverty line, you can apply for federal subsidies. Individually, you could qualify for an advance premium tax credit that can be availed with annual tax returns. You can receive them in monthly installments to pay your premiums. You could opt for Medicaid although the eligibility criteria vary according to the US state in which you live.
- High-deductible plans – These plans let you pay less every month in premiums, but to access medical services, you’ll need to pay out of pocket for a longer period owing to the high deductible. Your monthly costs could come down, which you can choose if you do not frequent doctor visits. Catastrophic plans are one high-deductible plan for insurance shoppers aged less than 30.
- Health savings accounts – For those who have opted for a high-deductible plan, you can choose a health savings account to put money aside pre-tax, like 401(k), and use the money for qualified healthcare purchases.
- Your coverage needs – Every health insurance plan is categorized into metal tiers, with platinum indicating an expensive but robust plan while bronze indicating the cheapest plan available with basic tier facilities. Most people opt for silver plans for an affordable and comprehensive plan. You could also opt for a Gold plan if it is feasible for your premium payments.
It is advisable for everyone; first-time shoppers as well as those simply wanting to know that they have the best plan available to meet their specific needs to choose an expert to determine their best plan options.