You're healthy until you're not. And when you're not, it can cost you. That's because, without insurance, an injury or illness can be devastating, both physically and financially. According to Healthcare.gov, a broken leg costs $7,500 to treat, while a three day stay in the hospital can cost $30,000.
Ensuring you and your family are covered with affordable health insurance is essential.
Why Should You Have Insurance?
Health Insurance is a contract that requires a health insurer to pay some or all of your health care costs in exchange for a premium. There are a number of reasons having health insurance is a vital investment for both children and adults.
Health Insurance coverage is critical to maintaining your health and treating illness and accidents. It provides financial protection when it comes to maintaining your health, whether that care is routine or unexpected.
With most health insurance plans, you'll receive free preventative care benefits, such as wellness exams and routine vaccinations. Maintaining your health can decrease the likelihood you'll suffer from a more serious illness down the road.
When faced with a severe injury or illness, health insurance can ensure you receive proper and affordable care.
A recent study by the Urban Institute PDF found that those without health insurance "receive less medical care and less timely care, they have worse health outcomes, and lack of insurance is a fiscal burden for them and their families."
A Look At The Costs Without Insurance
Health insurance is an investment upfront. But in the long run, having insurance can thousands of dollars that you might not otherwise be able to spare.
In fact, according to a Bankrate.com survey, nearly 55 million Americans have nothing saved for an emergency situation. What's more, of those who do have an emergency fund, only 39% of have enough funds in the bank to cover a $1,000 emergency.
That means a broken leg - which can cost an average of $7,500, according to healthcare.gov - could devastate an individual or family.
That's where having health insurance coverage comes in, footing a portion or sometimes your entire medical bill.
How It Works
Meeting the deductible.
In most cases, your health insurance plan will come with a deductible. Once you pay this predetermined amount out-of-pocket, your policy will cover part of your medical expenses.
For instance, if your deductible is $1,000, you'll be responsible for paying the first $1,000 in services. After that, your plan will pay a portion, and you'll pay the remaining as coinsurance or copayment.
Many insurance plans will cap a client's out-of-pocket costs during the benefit year.
This is accomplished through an out-of-pocket maximum, also known as out-of-pocket limit. The out-of-pocket maximum represents the most you will have to pay for covered services during a plan year. After you spend this designated amount on deductibles, copayments, and coinsurance, your health plan pays the remainder of costs included in your benefits.
For example, if your plan comes with a $4,000 out-of-pocket maximum, once you pay $4,000 in deductibles, copayments or coinsurance, your plan will kick-in to cover all medical costs for the remainder of the calendar year.
There are stipulations, however. For instance, monthly premiums and services not covered by your insurance plan do not count toward the out-of-pocket maximum.
The cost of your medical care can vary dramatically depending on whether the provider you see is in-network (less expensive) or out-of-network (more expensive).
Insurance companies negotiate discounts with health care providers. This creates what is called an in-network provider.
In-network providers agree to charge lower fees to customers of a particular insurer, with the expectation that being listed as a covered provider will bring in more patients.
This means that when you an in-network provider, you'll pay less for the same services than you would at a provider who is out-of-network, as those providers are not bound by a discount agreement.
While visiting an out-of-network provider is more expensive than seeing an in-network provider, your insurance may still cover a small portion of your medical bill.
However, this isn't the case for those without any kind of insurance coverage. In fact, someone who doesn't have insurance will pay twice as much for care on average, according to healthcare.gov.
Different Plans For Different Needs
Health insurance plans available through the Health Insurance Marketplace aren't one-size-fits-all products. There are various plans, pricing, and coverage to meet most consumers' needs.
If you're young and relatively healthy, you might not think a full-coverage plan is worth the investment. In that case, you might consider a "Catastrophic plan."
This plan is for people under the age of 30 or those with a hardship exemption or affordability exemption and covers the worst-case scenario health-wise. While the monthly premium for the plan is low, the deductibles are very high, reaching nearly $8,000 each year.
Other healthcare plans available on the Health Insurance Marketplace are divided into what are called the "metal" categories: bronze, silver, gold, and platinum.
The categories are based on how health care costs are split between the plan and consumer. While coverage and cost vary between plans, the quality of care does not.
The bronze tier comes with the lowest monthly cost, but the highest out-of-pocket-cost when it comes time to receive care. This plan works well for those who want to protect themselves from worst-case medical scenarios, like severe sickness or injury.
Conversely, the platinum tier has the highest monthly cost, but the lowest out-of-pocket cost when it comes time to receive care. This plan may work well if you require more robust health care and would rather pay a higher premium, knowing nearly all other costs are covered.
Other Ways To Lower Costs
While any health insurance plan will cost you monthly, there are options available to lower the sticker shock.
Depending on an individual's income, they may qualify for reduced, or even free health coverage, with the help of a subsidy, A subsidy is money granted by the government that lowers the price of a service or commodity, in this case health insurance.
There are two types of subsidies that individuals may qualify for: the premium tax credit subsidy or the cost-sharing reduction. You may qualify for both.
The premium tax credit is a credit you can take in advance to lower your monthly health insurance payment.
When you apply for coverage in the Health Insurance Marketplace, you estimate your expected income for the year. If you qualify for a premium tax credit based on your estimate, you can any amount of the credit in advance to lower your premium.
However, if at the end of the year you've taken more premium tax credit in advance than you're due based on your final income, you'll have to pay back the excess when you file your federal tax return, according to healthcare.gov.
The cost-sharing reduction is a discount that lowers the amount you have to pay for deductibles, copayments, and coinsurance. Those who qualify must enroll in a plan in the "silver" category to get the extra savings.
Open Enrollment is the time of year when you can enroll in health insurance.
Nov. 1st marks the first day that individuals can enroll in a health insurance plan for the next year. This enrollment period ends on Dec. 15th. Any coverage you select during Open Enrollment will begin on Jan. 1st of the new year.
If for some reason you miss the Open Enrollment period, you may still be able to enroll in a Marketplace health insurance plan if you qualify for the Special Enrollment Period. Eligibility is determined through a qualifying life event, such as getting married, having a baby or losing other health insurance coverage.
Ready to enroll?
First Family Insurance offers resources and expertise to help you navigate health insurance open enrollment.
By taking the time to understand your individual needs, your risk assessment, and your financial goals, First Family Insurance can find the plan that's right for you.
First Family Insurance makes the process of obtaining insurance easy, providing you simple to understand health insurance information, from accessing the best plans to taking the time to understand your needs.