Sometimes health insurance can be tricky to understand, especially if you’re not familiar with it. With so many terms, plan types, and service options, it’s easy to get confused. But if you want to make smart choices about your health and finances, it’s important to understand how health insurance works. This beginner’s guide will teach you the basics of health insurance so you can choose the plan that best suits your needs.
How do I get health insurance?
Health insurance is an agreement between you and an insurance company to help you pay for your medical expenses. Your insurance company pays a portion of your medical expenses and asks you to pay a certain amount each month. The exact amount you pay depends on the terms of your plan, which includes doctor visits, hospital stays, treatments, preventive care, and medications prescribed by your doctor.
Key Terms
Before you learn about the different types of plans, it’s important to understand the basics of health insurance. These terms refer to the monthly payments you make for your insurance. This represents the out-of-pocket payment you must make before your insurance begins to reimburse you. If you visit a doctor after you have met your deductible, you will usually have to pay a co-payment (a portion of the cost) or a flat fee for the treatment. The deductible is the maximum amount you will pay per year for approved services. Once this limit is reached, your insurance company will cover all costs.
Different Types of Health Insurance
Many people have different types of health insurance. If you want to see a specialist, you will need to use a network of doctors and get a referral from your HMO plan. You can see doctors both inside and outside of the network without requesting it if you have a PPO (Preferred Provider Organization). You don’t require a referral if you have an EPO (Exclusive Provider Organization), as it only covers services from businesses in the network. Finally, a POS (or point-of-care) plan is a hybrid of an HMO and a PPO. A referral is required, but some out-of-network medical care is covered.
Understanding Network Providers
Each plan lists the doctors and hospitals it covers. If you choose a provider that is in-network, you will benefit from lower costs and more comprehensive services. Selecting an out-of-network physician may be more costly depending on your plan. Your plan may not cover this doctor at all. Before making an appointment, check to see if the doctor or hospital is networked to avoid additional costs.
Coverage and Benefits
Most health insurance plans cover a wide range of things, including preventive care, doctor visits, hospital stays, prescription medications, maternity care, mental health care, and emergency care. In most cases, preventive care, such as vaccinations and annual checkups, is covered free of charge. Before choosing a plan, we recommend that you read the Summary of Benefits and Coverage (SBC) to understand what is included.
How to Choose the Best Plan
The plan you choose depends on your health needs, income, and personal preferences. If you visit the doctor frequently or take prescription medications, you may want to opt for a health insurance plan with a higher cost but lower copays. If you are in good health and don’t visit the doctor often, a plan with a lower cost and a higher deductible may be a better fit. Also, check to see if your preferred doctors and clinics are in-network.
Buy Health Insurance
If you use health insurance, you will need to schedule an appointment with a doctor listed on your policy, show your health card, and pay any copays. Write down all of your expenses so you know how close you are to your deductible. Understanding the benefits of your insurance will help you get the most out of it.
Private vs. Work-Based Health Insurance
Many people have health insurance through their job, and their employer may cover some of the cost. If you’re self-employed or don’t have job-based insurance, you can buy it from the government marketplace or an insurance company. Depending on your age, income, and health, you may also be able to get help from government programs like Medicaid or Medicare.
