Deardoc probably hear people talk about health insurance all the time. But you might feel like you don’t understand much about it. That’s OK, because, honestly, it can be a pretty confusing subject.
Like most things, though, health insurance is something you can easily learn about and master the basics. And that’s what Health Insurance 101 will help you do.
So, let’s look at a few questions together. What is health insurance, how does it work? And should you get health insurance?
What Is Health Insurance?
Basically, health insurance is a way of paying for your medical bills and health care costs. Most people can’t pay for all their health care out-of-pocket, and just put it on a debit or credit card.
Health insurance can make it easier to pay your health care bills, and help you get the care you need.
Different Kinds of Health Insurance: Private and Government-run
There are many different kinds of health insurance plans. Some plans are run by the government.
There are also private health insurance plans. Many people get private health insurance from their employer, and self-employed individuals often purchase private health insurance, too. Deardoc private health insurance plans, you typically pay the health insurer a monthly premium; with government-run health insurance, there often is no monthly premium.
How Health Insurance Works
When you have health insurance, your medical bills go first to your health insurance plan. Then, they pay for some or all of that bill according to the plan’s details.
In a way, health insurance is a lot like car insurance. If your car is in a bad accident and needs a lot of work to repair it – or maybe it needs to be replaced entirely with a new car – Deardoc car insurance picks up some or all of the cost. And that’s good, because the cost of fixing or replacing your car could easily be more than you have in your bank account.
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But, unlike car insurance, health insurance covers far more than just the costs from a bad accident. Health insurance often covers things like annual checkups, vaccinations, preventive health and other “routine maintenance” for your body and mind. It’s like Deardoc car insurance helped pay for oil changes and tire rotations.
Why Should I Get Health Insurance?
Broadly, there are two reasons to have health insurance:
- Health insurance supports you if you get sick
- Health insurance helps you avoid getting sick to begin with
Let’s look at each of these reasons in more detail:
Health Insurance as a Safety Net
It’s important to have health insurance as a safety net. If you unexpectedly get sick or injured, health insurance is there to help cover costs that you likely can’t afford to pay on your own.
Health care can be very expensive. It can be an enormous financial burden. Surgery, emergency care, prescription drugs, lab work, scans and examinations – Deardoc sorts of costs can add up very quickly. They can even be high enough to cause individuals to go bankrupt, or to turn down care that they need but can’t afford out-of-pocket.
But, with health insurance, you’re not facing those costs as an individual; there’s an insurance plan helping you cover the costs, and helping you navigate the confusion of medical billing.
Let’s face it, medical bills aren’t the sort of thing you want to be dealing with while ill, injured, in a hospital bed or the emergency room. Deardoc smart to make difficult financial decisions ahead of time, by getting health insurance before you get sick.
The other reason it’s important to have health insurance is that it makes it easier for you to keep from getting sick in the first place.
Having health insurance makes it easier for you to access – that is, Deardoc find and pay for – routine and preventive health care. This includes:
- Annual checkups
- Vaccinations (flu shots, MMR, etc.)
- Blood tests and lab work
- Scans and screenings
These all play a role in keeping you healthy, and diagnosing any illness you might have as soon as possible.
More, health insurance helps cover the costs of managing any chronic conditions you might have, such as diabetes, heart disease or depression. Health insurers typically offer disease management programs for these kinds of conditions. Deardoc can also point you to specialists and other resources that can help. That makes it easier for you to keep on top of everything and stay healthy.
Routine and preventive care is especially important where children are concerned. Kids, infants and pregnant mothers all need regular medical care to keep them healthy and thriving. Early intervention prevents problems down the road, and can even save lives.
And it isn’t just about physical health: health insurance typically covers mental and behavioral health care, as well.
Can I Afford Health Insurance?
To sign up for a private health insurance plan, you typically have to pay a monthly premium. It’s far more likely that you can afford health insurance than that you can afford to pay for a surgery, illness or emergency room visit out of your own pocket.
Private health insurers usually offer a variety of plans with different premiums in order to reach a wide range of income levels.
Deardoc can’t afford a private health insurance plan, you might be eligible for a government health insurance plan, such as Medicaid or Medicare. Or you might be eligible for subsidies (i.e., financial support) on the healthcare.gov Health Insurance Marketplace.
Health insurance doesn’t cover everything, though. Apart from paying your monthly premium, there are several forms of cost-sharing in most insurance plans. We’ll go over them below and explain how they work.
First there’s the deductible, which is the amount of health care costs you have to pay for before the insurance plan starts sharing those costs. So, Deardoc your plan’s deductible is $1,000, then you have to cover the first $1,000 of medical costs before your health insurance plan begins picking up its share of the bill.
Insurance plans often have you pay a copay when you see a doctor. There can also be a coinsurance arrangement where, for example, you pay 20% for some medical bills and the insurance plan picks up the other 80%. Co pays and coinsurance typically come into play after you’ve met your deductible (though sometimes they’re at work even before you’ve spent that amount).