Everyone should have health insurance. If you get into an accident, get sick, need surgery, or have a health condition, medical costs can add up quickly. But how much and what kind of insurance should you get? To choose wisely, you first need to understand how health insurance works.
How Health Insurance Works
Health insurance will help you cover medical expenses, so you’re not stuck paying for costly bills out of pocket. When you sign up for a health plan, you agree to pay a regular premium. When you have a medical bill and need to file an insurance claim, you will have to cover your deductible (and coinsurance if your plan requires it) before your carrier will help pay the remaining balance.
Common Health Insurance Terms
- Premium: The amount you pay monthly toward your health plan.
- Deductible: The amount you will pay out of pocket toward a specific service before your health insurance covers the rest.
- Copayment: A flat fee you pay for a service or prescription.
- Coinsurance: The percentage of the total cost that you will need to pay for a service.
- Out-of-Pocket Limit: The maximum amount you’ll be required to pay for medical services each year. Payments you make throughout the year toward deductibles, copayments, and coinsurance will help you reach this.
Let’s say you get into an accident, and your medical expenses add up to $10,000. Your deductible is $3,000, and your coinsurance is 10%. In this case, you would have to pay the first $3,000 and then 10% of the remaining amount. In total, you’d pay $3,700 out of pocket, and your insurance company would cover the rest.
Types of Health Insurance Plans
Here are two of the most common types of health insurance. Each one covers an array of medical, surgical, and hospital expenses for its members.
Fee-for-Service: Under these plans, healthcare providers are paid a fee for every service they provide. Patients can see a doctor of their choice, and claims are filed either by the medical provider or the patient.
Managed Care: A managed care organization focuses on providing affordable healthcare to its members by limiting options. Members receive a list of doctors and labs they can work with and are offered financial incentives to do so.
Small Group Health Insurance
If you run a small business and have employees, you need a health insurance plan that protects you and your people. Offering quality health insurance can be a huge incentive for your employees. If you have fewer than 50 employees, ask us about your options for small group health insurance.
Short-Term Major Medical
Short-term health insurance may be a temporary solution to help fill coverage gaps while you’re between jobs or if you miss open enrollment. Ensure coverage in case of an emergency. Cancel any time without penalties.
Insurance for Seniors
Health insurance is an integral part of retirement planning that can have a significant impact on your finances and wellbeing. To avoid substantial coverage gaps in your Medicare plan, consider replacing or supplementing your plan with either Medicare Advantage or Medicare Supplement.
Per the Kaiser Family Foundation, enrollment in Medicare Advantage has nearly doubled over the past ten years. In 2019 alone, 22 million people (34% of all Medicare beneficiaries) enrolled in Medicare Advantage. This program offers benefits that go above and beyond (and replace) Original Medicare.
Medicare Advantage plans offer lower premiums than Medicare Supplement, often including prescription drug coverage and additional benefits like dental, vision, and hearing. These benefits can provide significant savings and grant you greater peace of mind. Contact Elite Insurance Solutions for simplified education on Medicare Advantage to see if it may be a good fit for you.
Medicare Supplement is meant to work alongside, not to replace, Original Medicare. It helps cover out-of-pocket expenses like copayments, deductibles, and coinsurance.
Elite Insurance Solutions is committed to helping you navigate Medicare successfully. You can start by filling out our simple needs assessment. We then will provide you with a cost-benefit analysis and recommendation that best fits your unique situation.