There's nothing more important than your health, and having health insurance can prevent a medical emergency from turning into a financial one. Learn about the various types of health insurance, from HMOs to PPOs, and how to find coverage. Plus, keep up with the latest changes to health care laws, rules, and regulations.
According to the Bureau of Labor Statistics, the average American spent $3,667 on health insurance in 2020, or just over $300 per month. That’s up almost 4% relative to 2019. The amount you spend depends on the plan you select, if you get help paying for coverage (through your employer or premium tax credits), your location, your gender, how many people you enroll in your plan, and more.
You can apply for coverage at your state’s health insurance marketplace, or healthcare.gov if your state doesn’t have one. Or, you may be able to join your spouse’s plan or extend your own coverage via COBRA if you just lost health insurance through work. You also may qualify for Medicaid if you’re not earning an income—apply through your state’s Medicaid agency or healthcare.gov.
Coverage through either Medicaid or the Health Insurance Marketplace can be low-cost or free—if you qualify. Low income families and individuals may be eligible for Medicaid, and most people qualify for Marketplace coverage as long as they’re not on Medicare. If you’re not eligible for Medicaid, you may still qualify for “premium tax credit subsidies” to offset (or pay for) your Marketplace plan.
A preferred provider organization (PPO) is a type of health plan that contracts with doctors and other care providers to provide member services. You can use out-of-network doctors, but you won’t benefit from negotiated in-network discounts and will pay a higher rate. This type of plan is generally more flexible than an HMO.
Your premium is how much you pay - often monthly - to an insurance company for your health insurance coverage. The amount depends on a number of factors, such as the type of plan you have (HMO, PPO, POS, and EPO) and if you have coverage through work, through the Marketplace, or through another organization, and if your premiums are subsidized (by your employer, for example, or by the government).
The Health Insurance Marketplace, or “The Marketplace,” is a health insurance exchange that was created as a result of the Affordable Care Act to make it easier to shop and compare health care plans. The Marketplace is at healthcare.gov, but some states run their own exchanges. You can apply to see if you qualify for savings on monthly premiums or if you qualify for Medicaid or CHIP.
Children can stay on a parent’s health insurance until they turn 26, but may be covered through the end of the year in which they turn 26 (check with your employer). Once coverage ends, adult children have options: They may be able to enroll in their own or a spouse’s employer’s plan, continue on their parent’s plan through COBRA, or purchase a plan through the Health Insurance Marketplace.
Balance billing is when a medical provider bills you the difference between their charge and what your health insurance pays. This bill is for the balance, or the remainder, of the medical care you received.
A copay is a specific dollar amount that you’re required to pay for covered health care services or prescriptions, as defined by your insurance plan. Copays are considered an out-of-pocket cost and are typically paid at the time of service.
The health insurance deductible is the amount of money you agree to pay before your health insurance coverage kicks in. Plans generally have a family deductible and an individual deductible, and different deductibles might apply to different types of services. Also, there are some services, like preventive care, for which no deductible applies—they’re covered by insurance immediately.
Coinsurance is your out of pocket portion of a covered medical or health care cost after the deductible has been paid.
A high deductible health plan (HDHP) has lower monthly premiums and a higher deductible than other health insurance plans. The Internal Revenue Service (IRS) defines an HDHP as a plan with a deductible of $1,400 for one person or $2,800 for a family for the year 2022.
COBRA stands for the Consolidated Omnibus Budget Reconciliation Act, a provision under federal law that requires private insurers for employer-sponsored group health plans to offer continuation of job-based health coverage if coverage is lost due to a qualifying event.
A health savings account (HSA) is a tax-advantaged account some people can set up to pay for current and/or future health care expenses. To be eligible to create an HSA, you must be covered by a high-deductible health plan (HDHP).
A health maintenance organization (HMO) is a type of health insurance plan designed to reduce medical costs by using a network of preferred providers and having members select a primary care doctor to coordinate their health care needs. HMOs are typically less expensive than other health insurance plans.
A point-of-service plan (POS) combines aspects of HMOs and PPOs to provide affordable in-network care to members while still providing the flexibility to seek care out of network.
A preferred provider organization (PPO) is a health plan where an insurance company contracts with hospitals, doctors, and clinics to create a network of participating providers. These providers agree to provide medical care to plan subscribers at a negotiated rate.
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