Benefits and Qualifications
Whether you're looking to buy health insurance or are thinking of switching plans, understanding the differences between plan types streamlines medical processes while ensuring maximum coverage. Where personal care and external solutions are considered, the Affordable Care Act (ACA) offers consumers with a variety of specified benefits, too.
Individuals seeking coverage often wonder about policy protection and payments. Health insurance coverage benefits are often received depending upon a variety of factors, including:
- Membership in "managed care" plans
- Previous health history
- Need for specialized care
These qualifications often adhere individual plans to specified coverage. However, individual health insurance plans often deliver many benefits, such as:
- Preferred Provider Organization (PPO) plans offer network-external services. Often, a percentage of internal coverage is provided based upon the individual's situation. Lower deductibles are available.
- Health Maintenance Organization (HMO) plans offer a contract between an insurance company and the individual patient. This contract grants great coverage for hospital, doctor and network-approved providers.
- Point of Service (POS) providers are incredibly open-ended. They're considered a "PPO and HMO hybrid plan." These plans grant primary caregivers, and they offer availability to opt-out of network provider services with co-payment increases.
Coinsurance Maximum Qualifications
Normally, every individual is granted the right to organizational health insurance. While funds may be an issue, previous health maladies only determine coverage amounts, rather than coverage itself.
However, insurance qualifications often run unilaterally to coinsurance maximums, or the "annual cap" individuals are required to meet. Individuals will not be able to pay medical bills without procuring the maximum amount. Similarly, several other requirements must be met:
- Procurement of "out-of-pocket" maximums
- Procurement of a deductible or, the upfront amount required for service
- Responsibility of co-insurance
Additionally, individual and family plans often require percentage-payments for several areas, such as physical therapy, prescription drugs, nursing care, x-rays and lab tests. Depending upon a policy's specifications, individuals may be responsible for payment.
The Affordable Care Act
The ACA, while a provisionary law, offers essential benefits to individuals within the new health insurance marketplace:
- Prescription drugs are covered with minimal extra costs
- Ambulatory patient services (outpatient care) are granted immediately. Nearly every individual and family insurance plan provides such coverage
- Hospitalization is offered through individual and family insurers. While the holder may require about 20 percent of the bill, the ACA can help costs by offering financial assistance and subsidies
- Most plans cover Emergency care, and ER room visits don't require pre-authorization. Extra costs are not applied to out-of-network ER visits.
- Rehabilitative services grant rehabilitative therapies relieving pain, handicaps and life-required mobility supplies
Open Enrollment Availability
Open enrollment is an annual period when individuals can apply for health insurance plans. Individuals and families without plans during open enrollment are often not granted an opportunity to apply for the year's insurance. Normally, they're barred from application until the next year.
Having pre-existing conditions, such as high blood pressure, diabetes or depression needn't pose problems for those seeking health insurance solutions. According to the ACA, insurance companies may not turn away individuals based upon medical conditions. Similarly, patients are not required additional wait times before coverage is provided.
Cost of Health Insurance
Health insurance premiums differ in price depending upon coverage, and different providers offer different rates. For most, average individual health care plan premiums start around $205 and can run upwards of $400, depending on overall benefits and coverage.
Within these options, cost drivers often adhere to a variety of factors. Under the Affordable Care Act (ACA), dubbed ObamaCare, Essential Health Care coverage is provided for both small group and individual plans as of 2014. While Large Group Plans are currently not guaranteed supporters of essential benefit packages, many support working individuals with coverage. The ACA also offers several health insurance plans for individuals, which includes benefits such as ambulatory patient services, emergency services, and hospitalization, preventative services, among others.
How Are Costs Calculated?
Often, contractual arrangements are made with health care providers depending upon "cost drivers," which affect an individual or family's premium insurance plan costs. The cost of health care is typically determined through a variety of factors:
- Health Characteristics: An individual's health is assessed, and different insurance allowances are made depending upon qualifying factors. Costs are often determined by age, gender, health, marital status, tobacco consumption, zip code and occupation.
- Plan Choice: Typically, different plans consume different expense rates. Cost-sharing sometimes amounts to a large cost component, and different benefits are available at different cost levels. Factors that determine the cost of average health insurance plans:
- Deductible: Annual dollar amount paid by the insured.
- Co-insurance: Percentage of insured covered costs following the deductible.
- Co-insurance Maximum: Maximum annual amount the insured is liable to pay.
- Out-of-Pocket Maximum: Maximum dollar amount the insured is liable to pay (in total).
- Co-payment: A per-dollar amount the insured is liable to pay to cover costs following deductible payment.
Help Paying for Health Insurance
Under the ACA, individuals and families are required to obtain and maintain health insurance. For individuals and families who cannot afford monthly premiums, financial subsidies, such as the premium tax credit, are available. Individuals who make between 100 and 400 percent of the federal poverty level are eligible for the premium tax credit subsidy.
In addition, free or low-cost coverage is available through Medicaid or the Children's Health Insurance Program (CHIP). Available in all states, Medicaid provides free or low-cost health care for low-income families and children, pregnant women, the elderly, and people with disabilities. Also available in all states, CHIP provides affordable health care to children in families that earn too much to qualify for Medicaid.
Additional Health Coverage
Beyond the provided health insurance options, there are additional coverage options available in the health insurance marketplace. Each contains individual health plans and family health insurance plans, and costs typically vary depending on coverage, benefits, and physician accessibility. Here are some of the major types of health insurance plans:
- Health Maintenance Organizations (HMOs): Contractual arrangements through health care providers are provided through this insurance company type. Patients are required to see only those providers within the network. Additionally, a referral is required to see a specialist.
Typical cost: $425 monthly and $5,130 annually for single coverage; $1,147 monthly and $13,770 annually for family coverage.
- Preferred Provider Organization (PPO): These organizations contracts health-care providers within a network. Patients do not need a referral for specialist treatment, and they are granted access to external providers.
Typical cost: $427 monthly and $5,124 annually for single coverage; $1,169 monthly and $14,033 annually for family coverage.
- High Deductible Health Plan: These plans are considered "private" health plans. Annual deductibles of at least $1,150 are required for self-coverage; $2,300 is required for family coverage.
- Point-of-Service Plans (POS): These plans combine HMO and PPO plans to grant individuals and families freedom within their selections. Often, customized plans are available.
Approximate cost: $397 monthly and $4,987 annually for single coverage; $1,079 and $13,937 for family coverage.
Deadlines and Guidelines
Whether you're currently without health insurance coverage or have a policy but are thinking of switching plans, there are a number of important factors to consider. Since the passage of the Affordable Care Act, a great deal of health insurance activity is taking place on public marketplaces or exchanges. These marketplaces are often available online. If you want to make sure that you're getting the best possible policy, it's always important to know as much about the process as possible.
Deadlines for applying for health insurance will vary depending on exactly what type of policy you're interested in. In the state of Maryland, for example, the open enrollment period to apply for health insurance using the state marketplace begins November 15 and runs until February 15. During that time you can create an account on the website, input your employment and financial information to see what type of financial assistance or subsidy program you may qualify for and more.
If you miss the open enrollment period for your state marketplace, there are still a few important steps that you can take. Many marketplaces have Special Enrollment Periods that extend deadlines a significant period of time to give people the best possible chance at getting the health coverage that they so desperately need. Qualifying for a special enrollment period will require you to have gone through a life changing event like being diagnosed with a serious medical condition, experiencing a change in your family size (such as the birth of a child), getting married, a change in residency, and more.
Renewing or Switching Plans
If you're thinking of switching plans or if you want to renew your current health insurance policy, the deadlines that you need to pay attention to are essentially the same as those who are applying for new plans altogether. The thing that you need to keep in mind is that coverage for your 2014 plan will end on December 31, 2014. Coverage for a 2015 is designed to begin on January 1 of that year. As a result, you will need to have new coverage in place during the early weeks of the open enrollment period to make sure that there are no lapses in your coverage once 2015 begins.
Finding Health Insurance Information
If you're looking for more information about the types of health insurance policies that are available to both individuals and families in your area, the Internet is one of the most valuable resources that you have at your disposal. Visit the health insurance marketplace website for your state, type in your income information and browse the types of policies that are available. Even if you don't necessarily plan on getting a policy from that marketplace and would instead like to go with a private provider, doing the appropriate amount of research can still be a great way to make sure that you're getting both the best prices and the best policy for your situation. Even when the open enrollment period for state marketplaces hasn't started, you can still browse policy information on those websites.
With a topic as important as health insurance, the one thing that you always want to make sure of is that you're as prepared as possible. Preparedness leads to making the right decision when the enrollment period begins, which is something that will go a long way towards making sure that you're getting the type of coverage that will actually benefit both you and your family when you really need it.
Health Insurance: What You Need to Know
Since the passage of the Affordable Care Act (commonly referred to as ObamaCare), the health care situation in the United States has actually become relatively straightforward. Health insurance is generally obtained in a variety of ways - either through an employer provided plan, through federal or state websites (called exchanges or marketplaces) available in all 50 states, or by comparing the offers of different insurance carriers or providers.
Health Insurance Benefits
The benefits of health care fall almost exclusively into two distinct categories: financial and medical. From a financial standpoint, even the most expensive policy will ultimately be cheaper than paying out-of-pocket in the event that you or a family member should be diagnosed with certain types of medical conditions. Health care is also generally cheaper than paying out-of-pocket for routine medical examinations, doctor visits, visits to specialists and more. From a medical standpoint, health insurance also allows for the types of preventative coverage like immunizations.
Most individual health plans and family health insurance plans cover both preventative and routine medical expenses. They are designed to help ease the financial burden of everything from routine doctor visits to the treatment of certain devastating conditions like cancer in equal measure. Individuals and family members can choose to purchase "essential" plans, which provide a standard level of coverage, as well as plans with additional benefits that cover certain statistically rare conditions that they may be subject to based on things like family history.
Things to Consider When Buying Health Insurance
One of the many things to consider when buying health insurance has to do with the decision to go with either a short-term or a long-term plan. There are two main types of health insurance available for you to choose from. Short-term plans are favorable for many people who might find themselves in between jobs or who are waiting for an employer provided health plan to begin. Short-term plans are generally cheaper than long-term coverage, but they also have a variety of drawbacks that shouldn't be ignored. For starters, they provide no coverage for certain pre-existing conditions that a person may have like diabetes or cancer. They also offer no preventative care coverage and offer gap coverage only. Long-term plans are more expensive, but they provide the type of comprehensive care that both families and individuals need.
Tax Penalties for the Uninsured
Tax penalties for the uninsured will vary depending on the specifics of the situation. In 2015, for example, an individual will have to pay a penalty of up to 2 percent of their yearly household income for being uninsured. A second method of calculating the penalty involves paying $325 per adult for the year or $162.50 per child under the age of 18 years old. Under the Affordable Care Act, the larger of those two penalties is the one that will be assessed. The penalty steadily increases each year that a person is uninsured for the foreseeable future.
Enrollment Dates, Guidelines and Renewal Information
Enrollment dates for health insurance options provided by the Affordable Care Act will vary depending on the state in which a person lives. In Maryland, for example, health insurance enrollment begins on or around November 15 every year and continues until the end of December. Both individuals and family members have that period of time to review plans, choose the option that best fits their situation and enroll. Guidelines for each plan will be listed on the Marketplace website as well. Generally speaking, most people will need to renew a plan each year to continue coverage.
Cost of Health Insurance
The total cost of health insurance will vary depending on the plan selected by an individual or a family. The premium is the total amount of money paid per month for the plan, which can range from $100 to several hundred dollars or more depending on the situation. The deductible is the total amount of money that a person must pay for out-of-pocket expenses before the health insurance plan will go into effect. A person can dramatically reduce the premium on a health insurance plan, for example, by choosing a plan with a much higher deductible. The right decision will always come down to the family in general above all else.
Financial Help and Subsidies
Individuals and family members may also qualify for certain financial support to help make the cost of health care even more affordable. When signing up for a health plan during open enrollment in a Marketplace, for example, individuals can input their yearly income and automatically see what subsidies that they may qualify for.
Health insurance is and always will be a very important topic to both families and individuals in the United States. This will be true long after the dust surrounding the launch of ObamaCare has been settled.
One thing is certain: when it comes to making sure that you and your family members are protected in the event of certain unforeseen life changing medical issues, health insurance options are the best way to do just that.
Tax Penalties for the Uninsured
Under the Affordable Care Act (also referred to as ObamaCare), health insurance in the United States is designed to be as affordable as ever. It is also now required by law – anyone who is uninsured for either part or all of a particular year will have to pay various penalties when they file their federal income taxes for that period of time. The tax penalties associated with not having health insurance will vary depending on the specifics of the situation.
Because health insurance is no longer an option, certain tax penalties will be assessed for those individuals who remain uninsured past the enrollment deadline in 2015. According to the Health care.gov website, there are two distinct ways in which penalties will be assessed to individuals and families. People will only need to pay the higher of the two amounts, not both.
The first is a flat penalty accounting for 2 percent of a person's yearly household income. However, this is not necessarily as severe as it may at first seem. Only the amount of a person's income that is above the tax-filing threshold will be used for the calculation of the penalty, which means that most people will only be paying 2 percent of about $10,000. The Health care.gov website indicates that the maximum penalty for an individual using this calculation is the average premium for "Bronze" health insurance plans under ObamaCare.
The second way to calculate the penalty for 2015 is a flat penalty of $325 per person for the entirety of 2015. This penalty is associated with family health insurance rather than individual health plans. If people under the age of 18 are living within a household and are claimed as dependents on a person's income tax form, the penalty associated with those individuals will be $162.50. The total maximum penalty for each family when calculated using this method is $975.
Minimum and Maximum Penalties by Year
According to the Affordable Care Act, the penalty for uninsured individuals is designed to increase every year. This is done to make it more expensive to be uninsured than it is to be insured, which ideally should entice people into looking into more affordable and higher quality policies in their state's marketplace.
The penalty associated with not having coverage in 2014 is the higher amount of 1 percent of a person's yearly household income or $95 per person for the entire year, for example. Children under the age of 18 years old will be associated with a $47.50 penalty. The penalties increase to 2 percent of a person's household income or $325 per person in 2015, as previously stated. Penalties increase further to 2.5 percent of a person's income or $695 per person in 2016. Though the actual amount of penalties beyond 2016 has not been officially released, it is expected that they will continue to rise alongside inflation for the foreseeable future.
As with any type of income tax related penalty, there are certain exemptions that a person can qualify for that will not require them to pay the fee on a yearly basis. If a person's income (or the total income of every member of a family) is below a certain level and insurance in general is deemed "unaffordable," for example, that household can qualify for an exemption from the aforementioned fees. Specific qualification levels for those penalty exemptions will vary depending on the state a person lives in. As a result, all relevant information can be found by visiting the official website of the Health Insurance Marketplace in that state.
When it comes to the income tax penalty associated with being uninsured under the Affordable Care Act, the word "penalty" is probably something of a misnomer. While it is true that you will have to pay money for being uninsured, it is probably best to look at this fee as more of an incentive to research and purchase high-quality health care in your area than anything else. Health insurance options naturally vary by state. Types of health insurance available in one state may not be available in another, for example.
Things to Consider When Comparing Health Plans
When it comes to the types of health insurance options that are available in the United States, there are many different factors that you should consider before making any type of decision. Under the Affordable Care Act (also commonly referred to as the ACA or ObamaCare), there are many different types of individual health plans and family health insurance options available in your state's health insurance marketplace or through private providers. One of the keys to making the right decision is understanding the differences between types of health insurance as well as the types of health insurance plans that will best serve you and your loved ones in your unique situation.
Long-Term vs. Short-term Coverage
One of the most important decisions that you'll have to make regarding health insurance has to do with choosing between a long-term and a short-term plan. Short-term plans, by their very nature, are designed to be temporary and may fit in with your own personal situation in a variety of ways. If you currently find yourself between jobs, for example, a short-term plan is the best way to make sure that you and your family members are protected during that time. If you're a seasonal employee, have been laid off, are on strike, are a recent graduate from college or are between two jobs, a short-term plan will provide you with the temporary support that you need.
Long-term plans are designed for people in more stable financial or economic situations who want continuous security for the foreseeable future. These plans often cover major medical expenses, routine medical expenses and more.
Basic vs. Comprehensive Coverage
Another important decision that you'll have to make involves choosing between basic and comprehensive coverage. This will likely vary depending on your current health situation along with your age. A basic plan often covers routine medical expenses and certain major issues, but it may not provide coverage for certain types of life-changing events. A diagnosis for a condition like multiple sclerosis, for example, may not be covered under the terms of a basic policy.
A comprehensive coverage plan is designed to be exactly that as comprehensive as possible. These are great for individuals with pre-existing conditions or for those people who have reached an age at which certain types of conditions are likely to occur. If your family has a history of a certain type of serious condition after the age of 65, for example, but you have not reached that age or have not been diagnosed with that condition yourself, it would be valuable to look into a comprehensive coverage plan to be as safe as possible.
There are two schools of thought when it comes to health insurance. One insists that you should pay for services before you need them, while the other recommends paying only when you use them. Paying for services before using them is ideal for a number of reasons, including the fact that you and your family members will always have easy access to specialists and certain other medical professionals at vastly cheaper prices. Paying for services before using them is also one of the keys to preventative healthcare, versus waiting until you've been diagnosed with a condition to take action.
It is always important to understand the amount of money that you could pay for out-of-pocket expenses with a health insurance plan so that you can plan your finances responsibly. You should always know the deductible of your health insurance plan, for example, along with any gaps in coverage that may exist. Co-pay information is also important to know, which will be in the terms and conditions of any health insurance plan you sign up for.
As long as you are armed with the right information, you will be able to find the best type of health insurance for you or your family. Whether you need basic or comprehensive coverage, long-term or short-term coverage or some other type of policy, it has never been easier to take care of all of your health concerns in one fell swoop.
Types of Health Insurance Plans
When considering health insurance, several factors come into play. Flexibility, cost, coverage attributes, and increased liability are all important considerations. Depending upon a selected provider, both individuals and families can access a variety of health insurance options.
Within the health insurance industry, several types of health insurance plans exist. A Preferred Provider Organization (PPO) plan, while moderately expensive, is incredibly flexible. Meanwhile, HMO plans provided through a Health Maintenance Organization are relatively affordable. However, HMO plans are quite inflexible.
Several other plans, such as Point of Service (POS) plans, directed towards network-physician advisors, and the Affordable Care Act (also referred to as ObamaCare), which provides individuals with affordable, overarching care, are available. Each type provides different ranges of accessibility and affordability and each carries its own price based on family size and individual income. Short-term, Executive Provider Organization (EPO) and Health Savings Accounts (HAS) plans are available, too, and are unique depending upon an individual's financial and medical needs.
Individuals acquiring health care coverage through a Health Maintenance Organization typically get a certified HMO physician for primary health concerns. These doctors carry a slew of benefits for both individual and family health insurance options including:
- Industry-maintained professionalism
- Coordinated medical care
- Provision of specialist and referral treatment
HMO physicians similarly coordinate cardiologists, dermatologists and surgeons. Those seeking treatment from external physicians, however, are often required to pay their own expenses. Typically, an HMO cannot require referrals for an individual's emergency care.
Preferred Provider Organizations are considerably flexible when compared to traditional HMO providers. While PPO plans are coordinated through a specified list of hospitals and physicians, they often carry a higher healthcare cost, though individuals may visit "out-of-network" providers.
However, PPO plans often require co-insurance payment of external providers, as the insurance company normally doesn't negotiate discount rates. Normally, those extending options from a PPO network must follow several procedures:
- Provision of receipt from external provider
- Full payment of out-of-network provider service time
- Provide partial reimbursement to providers
- Produce a referral for specialist treatment
Point-of-Service options combine HMO and PPO plans. Individuals are often required to designate pre-specified network physicians for primary health care, and out-of-network options are available provided costs are paid.
Where specialists are considered, POS plans normally pay the individual or family's bill. Depending upon the area's medical network, a POS plan is an ideal selection for the following groups:
- Small businesses
- Large families across multiple locations
- Frequent travelers
POS options are incredibly versatile making them ideal for those accessing multiple medical establishments. Commonly, businesses offer POS plans due to their diversity.
Executive Provider Organizations cover a multitude of services provided through health care professionals. Often, these services are signed with insurers, making it similar to PPO insurance plans.
Under EPO plans, individuals and families are ensured low-cost medical care from PPO network providers. EPO plans are good alternatives for those seeking PPO plans while requiring additional flexibility:
- EPO plans cover out-of-network-care-coverage
- No health care provision coverage required
- Low cost
Affordable Short-Term Insurance Plans
Within the health insurance marketplace, short-term insurance plans are a common purchase. Unlike the above plans, short-term insurance plans are obtained through policy exchangers, which typically offer affordable "safety nets" for individuals and families without organization-provided plans. Many individuals in the following situations often get short-term insurance plans. They include:
- Unemployed individuals
- Families transitioning between plans
- Recent college graduates
- Divorced individuals
- Retired individuals
Short-term insurance is not regulated through the Affordable Care Act, and it is available year-round. Short-term insurance covers emergency care, though they don't cover pre-existing conditions, as HMO, PPO and POS plans do.
A Health Savings Account is available for individuals participating in health programs featuring high deductibles. Those opting for HAS benefits are often heavily taxed when placing their pre-tax income within a health care expense account.
HSA plans, while fiscally responsible, may be complicated to acquire, and they may be difficult to maintain for those with unsteady taxes. These plans are acquirable through traditional health plans as an extension, and are available depending upon individual health plans.