Health insurance is a safety net against the high costs of medical care, including consultations, prescription drugs and hospitalization. Without health insurance, those costs can be financially devastating. The Affordable Care Act (ACA) has brought down uninsured rates, but a number of people still do not have coverage.
People are most likely to have health insurance through their employers or government programs like Medicare and Medicaid. Individuals can also purchase private health insurance through a marketplace or directly from an insurer. In the latter case, premiums are typically higher than those in employer-sponsored plans. The cost of insurance can be even more prohibitive for some individuals due to pre-existing conditions, age, location or tobacco use.
Formal studies of the cost of medical care and the incidence of uninsured individuals began in the 1920s. These early studies helped shape legislation that was eventually enacted to help cover health care costs and reduce the number of uninsured.
In recent decades, the rate of uninsured Americans has fluctuated. The current level is close to 42 million, and the majority of those without coverage are young working-age adults. Those who do not have health insurance can be subject to financial penalties.
When choosing a health plan, it is important to consider both the premiums and coverage benefits. Different health insurance plans have varying deductibles, copayments and out-of-pocket costs, and premiums can vary widely. Many marketplace plans provide a summary of benefits and coverage to help you compare costs and coverage. Make sure to verify the network coverage, particularly if you have preferred doctors or health care facilities.
There are several types of health insurance plans available, including indemnity, managed care and consumer-driven health plans. Indemnity plans generally have the highest choice of providers, but their monthly premiums are usually higher than other types of plans. Managed care plans, on the other hand, often have lower monthly premiums but may limit your choices of doctors and health care facilities.
It is also important to choose a plan that meets your needs and budget. A good place to start is with a marketplace plan that includes cost-sharing reduction subsidies for those who qualify. A Silver plan is a good option for most people, as it offers middle ground between Bronze and Gold in terms of both monthly costs and medical benefits.
It is also important to review your health insurance coverage annually to make sure that it is up-to-date and still meets your needs. A common mistake is to let a policy lapse, which can result in expensive gaps in coverage. You can add family members to your policy at any time during the policy tenure or at renewal, and it is a good idea to include riders for specific health care needs as well. For example, some plans offer riders that will increase the sum insured in case of a critical illness.