Health insurance is a type of coverage that pays for a portion of your medical expenses, typically in exchange for a monthly premium (or payment, depending on the plan). Health insurance can help with the cost of healthcare treatments and services, and it can also encourage individuals to prioritize their health by scheduling appointments with doctors for preventative care.
There are many different types of health insurance plans available, and determining which type of plan is best for you depends on your healthcare needs and budget. Some important things to consider include the plan deductible, which providers are in-network and out-of-network, and whether or not the policy requires you to get a referral from your primary care physician before seeing a specialist. In addition, it is important to understand the cost structure of each type of health insurance plan, including co-payments, coinsurance, and deductibles.
In the individual and small-group markets, most policies are regulated by state insurance departments or the federal Department of Health and Human Services/Centers for Medicare and Medicaid Services. There are some exceptions, such as direct primary care plans and health care sharing ministries, which are not regulated by the government. Most states and the District of Columbia require insurers to offer a minimum set of benefits, such as prescription drug coverage, hospitalization coverage, and preventive health visits without charge (also known as essential health benefits). The government offers financial assistance with the purchase of qualified marketplace plans in the form of premium tax credits and cost-sharing reduction.
If you are enrolled in an employer-sponsored plan, your employer may choose from several plans offered by the health insurance company and determine which one to offer employees. If you are in the individual or small-group market, you can select your own plan during open enrollment periods and special enrollment periods triggered by certain events.
Most people rely on a health insurance plan through an employer, but there are also options to purchase individual and family plans on the market. The ACA has helped make these options more affordable by offering financial assistance with the purchase of qualified marketplace plans.
There are four categories of health insurance plans on the market: Bronze, Silver, Gold, and Platinum. The plan categories have nothing to do with the quality of care you will receive; they are simply based on the average monthly premium and your out-of-pocket costs when you use covered services, which vary by plan.
Most plans have a deductible, which is the amount you must pay toward a claim before the insurance starts to cover costs. Some plans also have an out-of-pocket maximum, which is a cap on how much you have to pay in a year. If you reach this limit, the plan will begin to cover 100% of eligible claims. You can find this information in your health insurance certificate or evidence of coverage. In most cases, the plan will mail this to you or provide access to it on a website.