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Health care has become a part of today’s American dream. According to research the higher the income, the better your health. So, health insurance is necessary to pay for the high costs of healthcare, unless you are very wealthy, over 65 or very poor. The very wealthy can afford the cost of chronic medical care or even an extraordinary emergency. Those who are over 65 have already paid into Medicare. The very poor will be able to qualify for Medicaid. Everyone else needs to purchase health insurance as it will protect your life savings from the devastating costs of a medical emergency, major accident or a chronic disease. It can force you to run up credit cards and even go bankrupt.

Health insurance is given to most employees in the US. But recently more and more people are finding themselves in work situations where they are not offered employer-sponsored coverage, or if offered they cannot afford their share of premiums. It is estimated that 44 million people do not have health insurance in the US. If you are one of those who does not have health insurance and money is tight then you will postpone necessary care and forgo preventive care (such as routine check-ups and childhood immunizations) and are more likely to be hospitalized for health conditions that could have been avoided. So, by not having health insurance you are gambling with your health, your future and the future of your family.

If currently, you are an individual or family who does not have health insurance through a group employer plan, our agency can walk you through the individual and family health plan options with you. If you are a businessman looking for group insurance we can help you compare the group coverage plans and help you choose one that suits your needs.

Health insurance is confusing, complex and often overwhelming. Just knowing a few things before you choose a health insurance plan can make it simpler.

Understanding Health Insurance Terms

Health insurance has a language of its own with different terms. So if you have a good grasp of these basic terms you will find how simple health insurance can be. Let us start by defining the terms:

  • Premium: It is the amount you pay out of your paycheck to your health insurance company to keep your coverage active. In return, it provides you the care and help you need to keep healthy.
  • Copayment (or “Copay”): It is the set amount you will pay each time you visit the doctor or fill a prescription. It is usually a relatively small dollar amount and does not count towards your deductible.
  • Deductible: This is the set amount you have to pay every year towards your medical expenses before your insurance company starts to pay. It varies from plan to plan and some plans have no deductible. li>
  • Coinsurance: This is the percentage you pay for the medical bill you share with your insurance company once you reach your deductible. If you do not have a 100% coverage for everything you will have to pay a coinsurance amount. For example, if you have a doctor’s bill for $100 and your plan covers only 80% of it then your coinsurance amount due to the doctor’s office is $20 or 20%.
  • “Out-of-pocket limit”: This is the maximum amount you as a policyholder will pay for covered medical expenses during the year. Co-pay, deductibles, and coinsurance all count towards this amount.

There are many other insurance terms that can be confusing to you, but starting with these five is a good foundation.

Health Insurance Plans

Choosing a health insurance plan can be confusing and complicated as there are many ways to classify health insurance plans. Just knowing a few things before comparing plans can make it easier. Plans can be classified by:

Network Type: HMO, PPO, POS, and EPO.

Metal Tier: Which include platinum, gold, silver, and bronze.

Deductible Type: High Deductible plans that provide tax savings when they are paired with an HRA or HSA.

NETWORK TYPE PLANS

These plans are different from the traditional insurance plan where you see any doctor you want, pay the doctor and be reimbursed for a portion of the medical costs. These are Managed Care Plans that try to control costs while maintaining quality health care. One way of doing this is to build a network of providers who agree to accept lower fees in exchange for access to patients in their network. Given below are some of the common network plans.

Health Maintenance Organization (HMO):

This is a type of insurance plan that typically restricts you to doctors, hospitals or network providers on the plan’s list. It will generally not cover out-of-network care except in an emergency.

Pros:

  • Lower premiums and lower or no deductible
  • Lower Cost than PPO

Cons:

  • Need to live or work in the plans service area.
  • Need a referral to see a specialist.

Preferred Provider Organization (PPO) Plans:

PPOs are extremely popular as they offer more flexibility than HMO plans. This is a type of health plan where you pay less if you use doctors, hospitals and providers that belong to the network. You do also usually have coverage for out-of-network services, but the cost will be higher.

Pros:

  • Larger network.
  • You can go out of the network for health care.
  • You do not need a referral to see a specialist.

Cons:

  • Higher premiums.
  • Deductible.

Point of Service (POS):

This is the type of plan where you pay less when you use doctors, hospitals and other health care providers that belong to the plan’s network. You are allowed, under certain circumstances to get an out-of-care network like a PPO. Like HMOs, many POS plans require that you get a referral from your primary care doctor for all care whether it is in or out-of- network.

Pros:

  • You do not need a referral.
  • You can go out of the network for health care.

Cons:

  • You need to file claims if you go out of the network for health care.
  • Higher deductible than HMO and PPO.

Exclusive Provider Organization (EPO) Plans:

It is a type of insurance plan where services are covered only if you use doctors, hospitals, and specialists in the network, with the exception of emergency care.

Additional key points about EPO plans:

Pros:

  • You can see a doctor or specialist without a referral from a PCP (a primary care physician)

Cons:

  • Limited network.
  • If you decide to see a doctor outside the network, then you may have to pay for the entire cost of medical service.

The 4 “METAL Categories”

Another way in which health plans are classified are the four major metal tier categories i.e. platinum, gold, silver, and bronze. These categories are divided to show you and your plan share costs.

It is important to note that these categories are not an indicator of the quality or size of the plans provider network. Furthermore, these categories can have plans for any provider network. For example, there are gold PPO plans as well as gold HMO plans.

The covered percentages given below show the approximate breakdown of costs for medical care and they include monthly and out-of-pocket costs that you are responsible for:

  • Platinum – Plan pays for 90% of your health costs. You pay 10%.
  • Gold – Plan pays for 80% of your health costs. You pay 20%.
  • Silver – Plan pays for 70% of your health costs. You pay 30%.
  • Bronze – Plan pays for 60% of your health costs. You pay 40%.

Besides the above four there is another category of plans called:

Catastrophic – These plans are only for people who are under 30 or those who are experiencing financial hardship. They pay less than 60% of your health care costs.

High-Deductible Health Insurance plans

A high-deductible Plan (HDHP) is also sometimes called a consumer-driven health plan (CDHP). This plan meets certain IRS requirements, the most important being a minimum deductible. This plan can be combined with a Health Savings Account (HAS) or Health Reimbursement Arrangement (HRA) to help you pay for medical costs on a pre-tax basis. Another feature of an HDHP is lower premiums. However, while you will be paying less on a monthly basis you will be responsible to pay for your healthcare costs up to a certain amount (deductible) before your insurance company starts to pay its share.

The additional key points about HDHP are:

  • Most plans provide exceptions for preventive care expenses (like immunizations, check-ups, certain screenings, etc.)
  • You will not be allowed to be covered by any other health plan
  • Typically, copays for office visits and prescription drugs are offered only after reaching the deductible.

Short-term Health Insurance Plans

They are designed to cover small gaps in health insurance coverage and are available for terms up to three months. They are often less expensive than the Affordable Health Care Act (ACA) health plans. However, as they do not meet the minimum essential coverage requirement of the ACA they are not considered as Qualifying Health Coverage. So, having one would not help you avoid paying a tax penalty for not having health insurance as required by the ACA.

Despite these and other drawbacks, short term health insurance plans can provide you the protection from unexpected health expenses and can be the right choice for some people.

Chacha Insurance has access to a long list of health insurance providers and we can walk you through the options to find the right health insurance policy that meets your individual, family or business needs.

Call 888-888-9914 or request for a quote and we will make the process simple.

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