You know all those skills you should have learned in high school but didn’t? We’re talking about filing taxes, how to change a tire, and budgeting; reality life skills that most of us will use more often than y=mx+b. Perhaps one of the most important topics left out of the course was understanding a little thing called health insurance. If you feel like you’ve never been late on this topic, you’ve come to the right place. Here’s your guide to understanding common health insurance terms, where to find health insurance, and other important things to remember when using your benefits.
What You Need to Know
What is the deductible?
Your deductible is the amount of money you will have to pay out of pocket for the year before the insurance benefits. Think of your deductible as the points you need to earn before you can claim your next Abercrombie & Fitch award. You spend x amount to get cash back when you buy again!
Your deductible can be anywhere from $0-$8,000, but is usually $1,500-$4,500. To meet your deductible, you will use your health insurance card for doctor’s appointments, to fill out prescriptions, and so on. You will receive a statement from your doctor and what is known as an Explanation of Benefits (or EOB) from your insurance provider. This will show you that your claim was processed through your insurance and your payment went towards your deductible. Not as exciting as receiving your A&F package but still great!
What is coinsurance?
Once you meet your deductible, your insurance benefits begin. This is what the insurance company will pay based on their claims. This is usually between 50-100%. Let’s say your coinsurance is 70%. This means that, once you meet your deductible, the insurance plan will pay 70% of the claims that result from covered services and you will pay 30%. For example, if you have a $100 deductible, the insurance will pay you $70, and you will have $30. Isn’t it nice to have someone to help you change?
What is a copay?
A copay, or copayment, is a predetermined amount that you will pay for certain benefits. In most cases, you have a copay for prescription drugs, doctor’s office visits, and outpatient visits during your visit.
Prescription drugs usually fall under 3-4 levels, ranging from generic drugs (or tier 1) to specialty drugs (tier 3 or 4). You can see drug price groups such as $10/$65/$95/$200 or variations thereof.
Office visits and urgent care often have co-pays that you already pay. You may see $25 or $50 for an office visit and $75 or $100 for urgent care.
Note: Not all health insurance plans use copays. In this case, there will be no fixed fee, and you will pay for everything you buy or visit the office (bummer, we know).
What is the out of pocket amount?
Your out-of-pocket cost (OOP) is the maximum amount you will pay for services covered under your health plan for the year. Once you reach your OOP, you can think of all your insurance as “free” for the rest of the year.
The out-of-pocket amount includes your past medical expenses and any copays, but these may vary depending on your plan. From the example above, if the coinsurance is paying $70, the $30 you paid will go toward your out-of-pocket limit. Once you reach your annual out-of-pocket maximum, all work in progress must be covered by insurance – fully, this time.
What are the safeguards?
Most health insurance plans are regulated by the Affordable Care Act, meaning they follow the ACA’s guidelines for coverage. These are coveted jobs that you get once a year, for free. Preventive services include routine vaccinations, blood tests, cholesterol checks, and more. You know, everything you need to stay in top shape.
The benefits of self-defense are often divided among social groups. There will be other benefits especially for women, children, or all adults. Some benefits, such as colonoscopies, require you to be a few years old before the benefits become restrictive.
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Where can I get health insurance?
Congratulations, you are truly great! Translation? You just turned 26 and you are being excluded from your parents’ health insurance. Now the real fun begins.
When this time comes, the easiest (and cheapest) way to get health insurance is through your employer. Many employers will pay a portion of your monthly premiums, contribute to a Health Savings Account, or (if you’re lucky) provide free insurance.
If you’re in a less fortunate group and can’t get insurance through an employer, you can sign up Market/ Exchange. All you have to do is meet all the requirements, afford it, sell your life, and sign your first child. Child!
As long as you meet all the requirements, you can apply for your business online, or you can contact an insurance broker to help you.
When can I apply for health insurance?
You will want to get your insurance through your employer. When you start a new job, you usually have to go through a “waiting period” where you have to work for the company for a set amount of time before you qualify for their insurance plan – this can be anywhere from 0-90. days.
If you are not registering as a “new hire,” meaning that within your waiting period, there may be limits to what you can do. In most cases, you will need a Qualifying Life Event to occur, which is a major life-changing event such as another loss (eg: adulthood/turning 26), getting married, having a child, and More information.
In most cases, the only other time to sign up for company health insurance is during enrollment. Most companies renew their health insurance plans on January 1st, making their enrollment period in December. This is the time when employees who opted out of (or didn’t opt for) the group health insurance plan are eligible again and can apply on the effective date of Jan. 1.
There are some cases when the insurance policy renews at a different time, which causes the enrollment period to be different. Do your due diligence and check with your employer before taking our word for good news.
If you do not need insurance through an employer and you are looking for an individual or market plan, you must wait for the registration period every year or live a qualifying life.
How much does health insurance cost?
Great question! We want to tell you, but the only answer here is that there is no answer. In most cases, the cheapest option is to sign up for a plan through your employer. In most cases, the employer will pay you a portion of your monthly income. Your “premium” is the price you pay, usually monthly, to sign up for insurance and have the insurance benefits.
Not to be the bearer of bad news, but if you need a health insurance policy, you will be responsible for paying it yourself every month. Depending on your income and the number of benefits you choose, this can range from $100-$400 per month. Use these precautions to stay as healthy as possible and keep costs down!
Things to Know
To get the best information, it is important to remember that insurance does not cover all medical procedures, as there are exceptions. The rest will be things like dental work, cosmetic procedures, other medicines, and so on.
There’s also a fun little thing called “pre-authorization” that the insurance company usually requires before it takes place. This means that your doctor must approve, or convince the insurance company that the procedure is “medically necessary,” before they will accept coverage. This is something that your agent’s office should be aware of, but we recommend not trusting anyone and taking it upon yourself to get this taken care of in advance.
Another thing to keep in mind is that deductibles, investment amounts, and out-of-pocket maximums are often changed each year. Usually, this happens on January 1 every year, but there can be exceptions.
Good advice: If you need a job that will make you sell your money, arrange it at the beginning of the year, or as soon as your policy resumes, so that your insurance benefits are available and the insurance pays part or all of the claims made. throughout the year. We do NOT recommend following these instructions at any risk, of course.
If you have questions about your health insurance benefits, what is covered, or what you owe in services, contact your insurance company. Yes, you have to wait for an hour, but many companies now have the option to leave a message and receive a call back. This is one of those times when it might be worth putting in a little extra work, we promise
* This is a summary only. Please contact your health insurance agent or insurance professional for more information.