Health Insurance

As medical care advances and treatment options expand, healthcare expenses naturally rise. Health insurance serves a critical purpose: it’s your financial safeguard in the face of unexpected, costly health issues. Whether it’s a sudden serious illness or a significant injury, health insurance is your shield against potentially overwhelming medical bills. Moreover, having coverage increases the likelihood that you’ll receive regular check-ups and preventive care, promoting your overall well-being.

The need for health insurance arises from the unpredictability of medical costs. Some years, your medical expenses may remain minimal, while others could bring about substantial bills. With health insurance in place, you gain the peace of mind that most of these costs are covered. Waiting until you or a family member faces a severe health issue to consider purchasing insurance is not advisable.

Furthermore, research underscores the positive correlation between health insurance and quality healthcare. People with insurance are more inclined to have a primary care physician and access medical assistance promptly when required. In essence, health insurance not only offers financial protection but also contributes to better healthcare outcomes.

Most people get health insurance through their employers or
organizations to which they belong. This is called group insurance.
Some people do not have access to group insurance. They may
choose to purchase their own individual health insurance directly
from an insurance company. Many Americans get health insurance
through government programs that operate at the national, State,
and local levels. Examples include Medicare, Medicaid, and
programs run by the Department of Veterans Affairs and
Department of Defense.

Whether you are eligible for group insurance or choosing an
individual plan, you should carefully compare costs and coverage.
Be sure to compare:
1. Premiums.
2. Coverage/benefits.
3. Access to doctors, hospitals, and other providers.
4. Access to after hours and emergency care.
5. Out-of-pocket costs (coinsurance, copays, and
deductibles).
6. Exclusions and limitations.
Even if you do not get to choose your health plan—for example, if
your employer offers only one plan—you still need to understand
your coverage. What kind of services are covered by the plan? What
steps do you need to take to get the care you and your family
members need? When do you need prior approval to ensure
coverage for care (for example, elective hospitalization for scheduled
surgery)? How are benefits paid; do you have to submit a claim?
Make sure you understand how your plan works. Don’t wait until
you need emergency care to ask questions.

If you are choosing between indemnity and managed care plans,
remember that they may differ in several important ways, including:
• How you access services.
• How you obtain specialty care.
• How much and sometimes how you pay for care.
Despite these differences, indemnity and managed care plans share
some features. For example, both types of plans cover a wide array
of medical, surgical, and hospital services. Most plans offer some
coverage for prescription drugs. Some plans also have at least partial
coverage for dentists and other providers.
The major difference between indemnity (nonnetwork based coverage) and managed care
plans (network-based coverage) concerns choice of doctors, hospitals, and other providers; out-of-pocket costs for covered
services; and how bills are paid.  Be sure to check on the physicians and hospitals that are included in the plan.

Leaving a job where you’ve enjoyed employer-sponsored health insurance can be a pivotal moment in your healthcare journey. Protecting yourself against the potentially staggering costs of medical care becomes a top priority, whether you’re departing voluntarily or due to circumstances beyond your control. Fortunately, there’s a federal lifeline that might help you maintain coverage.

Enter the Consolidated Omnibus Budget Reconciliation Act of 1985, or COBRA for short. This regulation mandates that group health plans offered by employers with 20 or more employees must extend coverage to you and your family for a generous 18 months following your departure from the job. In some situations, the COBRA period could stretch beyond the initial 18 months. To seize this lifeline, you must inform your former employer of your intention to continue coverage within 60 days of losing your employer-sponsored health benefits. However, it’s important to note that you’ll be responsible for covering the entire premium cost.

For those in states where COBRA doesn’t quite fit the bill, there’s another avenue to explore. Some states have enacted laws similar to COBRA but tailored for employers with fewer than 20 employees. To determine if this option applies in your state, reach out to your State Insurance Commissioner. You can conveniently locate their contact details in the blue pages of your local phone directory.

If neither COBRA nor state-specific options align with your circumstances, there are still paths to consider. You might explore the possibility of converting your group policy into individual coverage. Alternatively, if you anticipate transitioning to a new job in the near future, a short-term insurance policy could bridge the gap. And for those venturing into self-employment by starting their own business, there’s the potential to obtain health insurance through a trade/professional association or via ACA Health Insurance Marketplace or State Exchange. Your journey to continuous healthcare coverage involves a range of options; it’s a matter of finding the one that best suits your unique situation.

This type of coverage offers more flexibility in choosing doctors and
hospitals. Usually, you can choose any doctor you wish, and you
can change doctors at any time. Although you usually will not need
a referral to see a specialist or go for x-rays or tests, you may need
paperwork, such as your medical records, from your primary care
physician. Be sure to ask your doctor if there’s any paperwork that
you will need to take with you.
If you have indemnity insurance, your plan only pays part of your
medical bills. You are responsible for the rest. Your out-of-pocket
costs are likely to be higher for certain services than with some
managed care plans. Usually, you will need to spend a certain
amount each year before your plan begins to pay benefits. This
amount is called a deductible.

Deductibles are the amount of the covered expenses you must pay
each year before your plan starts to reimburse you. Deductibles
might range from $100 to $300 per year per covered person or $500
or more per year for a family.
If you have an indemnity plan, you may have more paperwork to do.
Some doctors will submit the claim for you. Once the doctor receives
payment from the insurance company, he or she will bill you for the
difference. With other doctors, you will have to pay the entire bill
and file a claim with your insurance company to be reimbursed.
Indemnity insurance pays a portion of the bill—usually 80 percent,
after the deductible has been met, although this may vary. You pay
the remainder, usually 20 percent of the total bill. This is called
coinsurance.
Indemnity policies typically have an out-of-pocket maximum. This
means that once your expenses reach a certain amount in a given
calendar year, the fee for covered benefits typically will be paid in full
by your insurance plan. If your doctor bills you for more than the
reasonable and customary charge, you possibly may have to pay a
portion of the bill. If you have Medicare coverage, there are limits on
how much a physician may charge you above the usual amount.
There also may be lifetime limits on benefits paid under the policy.
Most experts recommend that you look for a policy with a lifetime
limit of at least $1 million. Anything less may not be sufficient.

Consumer-directed health plans allow individuals and families to
have greater control over their health care, including when and how
they access care, what types of care they receive, and how much
they spend on health care services. The major types of consumerdirected coverage are:
• Health savings accounts, usually coupled with highdeductible health plans.
• Health reimbursement arrangements.
• Flexible spending arrangements.
• Archer Medical Savings Accounts.