Health insurance is an agreement between you and an insurer that pays for some or all of your medical expenses in exchange for a monthly premium. It protects you from financial ruin in the event of an illness or injury that is expensive to treat. It also connects you to a regular source of care that helps in the detection and management of illnesses and injuries. In addition, most health plans offer preventive care benefits such as vaccines, screenings and some check-ups without any cost to you.
Most people purchase health insurance through their employers or private insurance marketplaces. But, it’s also possible to purchase individual health coverage through an independent agent or directly from a health insurance company. Regardless of the method you choose, it’s important to review all costs—including premiums, deductibles and coinsurance—of the plans you are considering before making a purchase. You should also look for the annual out-of-pocket maximum, which is the most you will pay in a plan year in terms of deductibles, copays and coinsurance (excluding premiums). Most people never reach this limit but it’s good to know what it is so that you can properly budget for health care costs throughout the year.
It’s also important to look at the provider network of each plan you are considering. Some plans like HMOs have more restrictive networks and only cover care from in-network providers. Others, such as Preferred Provider Organization plans, allow you to go out of network but will cost you more. Lastly, you should also consider whether the plan has a tiering system that has different costs for different levels of service. The level of service you receive will determine the allowed amount your insurance company will pay, which is usually based on the usual, customary and reasonable charge for the service in your area.
While it is not mandatory to have health insurance, most people who buy coverage do so because they want to be protected from the financial impact of large medical bills. While no one plans to get sick or injured, these events can happen at any time and are often expensive. Health insurance is an affordable way to help cover these unexpected costs and help you stay healthy.
Despite the recent economic challenges, many Americans continue to be uninsured. According to the most recent data, about 42 million Americans—32 million adults and 10 million children—are uninsured.1 The goal of this report is to refocus policy attention on the issue and to help inform future reforms designed to increase health insurance coverage. Ultimately, the most effective way to reduce uninsured rates is to make health insurance more affordable for all Americans. This can be accomplished by increasing enrollment in existing plans and expanding access to new options that offer higher-quality care at a lower cost.