What’s all this business about Health Insurance?? Do I really need it? Unfortunately yes, yes you do. In this Article I will explain key terms used with health insurance and some reasons why we need it. Again this is from a non professional, I may summarize or oversimplify to make a complex subject Simple.
Premiums
Lets start out with your gateway to insurance covered healthcare, we call these Premiums. Premiums are what you pay to the insurance company each month to secure access to their aid when you need some medical help, like a subscription. Premiums do not count towards your deductibles, copay or coinsurances in most cases. When looking for an insurance plan, review how much you can spend each month, realize that this may take quite a bit of money, you have to weight the benefits.
Co-Pay
This is a set amount an individual with insurance (You) must pay to see a Medical professional. Say a doctors visit costs 100 dollars. You have insurance and walk into this appointment and instead of paying the full 100$ you pay 25$. That 25$ is your Co-pay, a benefit worked out by your insurance and the physician. Now, Some Co-payment policies may very from provider to provider, so often Co-Payments only start working after the deductible has been met, meaning you would pay the full amount of the visit until then. Whats this rude deductible things making it hard for us?
Deductibles
This Is the the amount of money you must pay in a given year or term length for your medical needs Before Insurance starts to kick in. Say you broke your leg and it cost 10,000$ to fix! Luckily you have health insurance that gave you a deductible of 1,000$, this means that once you pay that first 1000$ the insurance company will come in and start paying its share until you cover the full 10,000$ broken leg. Deductible amounts may very depending on what plan you choose, so when you see a plan with really low premiums but high deductibles, think twice and make sure you can really afford it. If you are paying 100$ a month with your premium, but your deductible if 7000$, you may end up spending far more money than you saved, often it pays off to have a lower deductible.
Coinsurance and Out-Of-Pocket Maximum
Does it hurt yet? If not, try this. Coinsurance is what comes after the deductible. What After!! Yes. Once you’ve paid and insurance starts to help, you still pay a certain percentage alongside the insurance company until you reach your out-of-pocket maximum (the most you can pay before insurance cover all the costs). Confused? okay lets continue the broken leg example, you’ve paid your 1000$ deductible and now insurance is kicking in, with you paying your coinsurance alongside them. Usually this will look something like you paying 20%or 30% and them paying 80% of 70%. You have an Out-of-pocket maximum of 5,000$, so when you keep paying your percentage and you finally hit 5000$ spent out of your pocket (usually including deductible) you are done! The insurance will pay the rest until all 10,000$ is paid off.
What to remember
When choosing a plan, remember these terms, this is your key to how much you will have to spend each month and what the worst case scenario may cost you( Add all the premiums together for the year, add that to you Out-of-Pocket Maximum and thats the worst case)
Don’t get overwhelmed! Its all good! nearly everyone in the United States deals with this. Just check all the prices and do what works best for you, don’t always go for the cheapest premium if you don’t have to. If something doesn’t get covered the way you’re plan says it should, call the company! They have to do what they are contracted to do and usually they are really great people. Keep up on any emails of physical mail they may send you, this can help you take advantage on great deals and avoid certain issues that may occur.
Why do you need Health insurance?
Take the example above into consideration. Medical emergencies unfortunately happen all the time, even to healthy people. Medical expenses are massive! Often average ICU costs per night are $1000-$3000, you can imagine how that could add up? Though you may be fine to live on the edge and try to stay safe, you run the risk of a financial burden that could follow you for decades.
It may seem overwhelming to start looking for insurance plans but just start by looking up the most commonly used companies out there. In this regard, its worth it to get a well known company that may cost a little more. Insurance companies are alos required to allow people to stay on their parents plan until the age of 26. I would say premiums could cost anywhere from 200$-800$. Check if your employer or university offer insurance plans, that can lower the cost quite a bit.
You may also be eligible for Medicaid in your state. Each state is different on what all they offer or provide but look up your states medicaid office and qualifications. Usually if you make less than $17,000 individually a year or less than $35,000 per year as a family you would qualify. For students or young families who don’t have a lot of money this is a great option.
