Health insurance is a policy coverage that provides the policy holder with the financial protection in the event of an illness. It helps cover medical expenses. The U.S. federal government provides health insurance to those people who cannot afford health care coverage with other insurance companies. This health insurance coverage is categorized into Medicaid and Medicare. Medicaid provides health insurance to low income families and individuals and it covers basic health services and hospital visits. Medicare is covered through your payroll and provides health insurance to people who are over 65 years of age or those who are below 65 years but with disabilities.
How U.S. Health Insurance Works
Health insurance begins by paying an upfront premium by the consumer which is intended to help share the risk of healthcare costs with a wide range of other individuals. Other costs that come with most health insurance plans in the US are captured as copays, coinsurance and deductibles. These costs represent the share the insured pay out of their pockets when they receive health care. Deductibles are what the consumer pays before the insurance company contributes. A copayment is what the insured pays for each visit. Coinsurance is the percentage the consumer pays for procedures like surgeries or hospital stays.
HMO: Health Maintenance Organizations
The Health Maintenance Organization plan is an insurance plan that provides preventative care coverage for both the enrollee and his/her family. It covers doctor’s visits, hospital stays, emergency care, surgery, laboratory tests, x-rays, and therapy. This plan limits the choice of doctors and hospitals since the enrollee chooses one doctor to provide health care and, therefore, are required to get a referral from their doctor to see a specialist.
PPO: Preferred Provider Organization
These insurance plans mostly cover preventative care. They require the insured to choose a doctor to be their primary doctor who in turn monitors their health. For the Preferred Provider Organization, the insured often has to pay a small amount as co-payment for each time they visit the doctor.
The Obama Healthcare Plan
Obamacare, also known as the Affordable Care Act, aims at providing more people in the U.S. access to health care, holding insurance companies accountable for their decisions as well as protecting patients from being denied coverage. This plan is able to pay for itself since it requires that everyone get health insurance or else pay a tax. This plan allows those with chronic illness or pre-existing illnesses to get treatment after the expansion of Medicaid. This plan also has subsidized prescriptions for those who are in Medicare.
Factors to consider when selecting health insurance in the U.S.
Insurance companies in most cases have a contract with some health providers and hospitals to supply services to those who have an insurance plan with them at an affordable price. This is how insurance companies reduce their costs. Therefore, when evaluating an insurance coverage, a person should first consider which health provider and hospitals have a contract with the insurance company. An enrollee who goes outside of the network of health providers who have contracted with the insurance company is required to pay more for their medical care.
Secondly, a person should consider what the insurance plan covers since some insurance plans do not cover certain pre-existing conditions. Although the Affordable Care Act introduced more standardization to insurance plan benefits, not all were standardized.
Finally, consider how much an insurance plan costs since with some insurance plans, premium payments are only part of the incurred cost. In order to receive healthcare under some insurance plans, one incurs some other costs from their own pockets in form of copayments, deductibles, coinsurance and copays.
Importance of health insurance in the U.S.
With the introduction of Obamacare, there are now opportunities for all citizens to find affordable healthcare options. If you have a pre-existing condition or a chronic illness, through the Affordable Care Act (Obamacare), you are no longer at risk of an insurance company canceling your coverage. This is a significant benefit as often those dealing with a pre-existing condition are the most in need of healthcare insurance.
Healthcare has become more affordable for the policy holders since they are able to negotiate services on behalf of a large contingency of people. This, in turn reduces the cost to each individual. Preventative services including vaccines, checkups and screenings are available at low costs (or sometimes free) without any deductible cost. There are additional avenues as well to help with the costs of your health insurance.
Finally, having health insurance coverage exempts one from paying penalties in the form of taxes which are levied against those who do not have a health insurance plan under the Affordable Care Act.
Due to the ever increasing costs of health care, it’s important to understand the different options available to you. Illnesses are very unpredictable and it’s impossible to predict you might get sick or injured. It’s also hard to determine how much health care you might need and how much it might cost to get medical attention. However, health insurance takes care of these unpredictable issues and offers a way control these costs at a known and fixed amount each month. Although health insurance may seem expensive since premiums are not the only costs that come with the insurance coverage, it is better to incur these costs when one is healthy and pay less when in need of medical attention.