Carrying health insurance can help protect you and your family from large medical bills due to unforeseen circumstances. Because of the high cost of the health care programs in the United States health insurance is considered essential to protecting yourself physically as well as your future wealth.
While having health insurance has typically been left up to individuals, for a few years following the passing of the Affordable Care Act (ACA) the federal government tried to require all citizens to show proof of health insurance or pay a penalty at tax time. As of Jan 1, 2019 that requirement was removed. However, some states including California, Massachusetts, New Jersey and Vermont still require proof of insurance or payment of a tax penalty.
If you don’t carry insurance, even if there is no penalty in your state, it can still put you and your family at risk of unreasonably high medical costs should an unfortunate accident or health event occur.
Taking the time to understand your health insurance options makes sure you are getting the best benefit for the cost.
Work Health Plans
Employer sponsored health insurance are plans obtained by a company or organization, typically as a value-added benefit to employment. The employer chooses and covers a portion of the plan costs and passes the savings along to the employee, so obtaining health insurance through an employer is typically cheaper than purchasing private insurance. Larger companies have more buying power than smaller companies so the care benefits can be greater for the cost if you work for a larger business. Smaller companies may limit benefits or pass on higher costs to their employees.
It’s important to note that you have little to no control over your employer’s plan coverage or cost, so if the benefits don’t cover your specific needs or the costs are too high you may be better off shopping around. You should have the choice to opt out of your employer insurance offering if you wish to.
Companies with fewer than 50 employees are not required by law to carry health insurance for their staff. As a benefit they may only offer a pre-tax health savings account option for employees, or give them a stipend to help toward payin for their own individual insurance. In this care you’ll have to look into your own health plan.
Personally Funded Insurance
Individual insurance plans are an option for people who are self-employed or who don’t have or don’t want to use an employer’s health plan offering. About 15 million people in the US buy health insurance on their own compared to about 160 million insured through their employer. These individual plans, while more expensive than an employer subsidized plan, are often more flexible and you are less likely to pay for benefits you don’t use. You also have the ability to change jobs without losing your coverage and you may qualify for government funded subsidies or other cost savings.
If you want to manage your own insurance you can start with your state’s Marketplace, go directly to a trusted insurance company, or go through a private exchange like healthcare.com or eHealth. Be sure to compare a range of plan offerings before you choose one. These plans are rated based on your yearly income, age, health history, family status, preferred hospitals or providers, and individual needs. The open enrollment period for most of these plans runs from Nov. 1st through December 15th for coverage starting January 1st. However some qualifying events like marriage, job changes, loss of insurance etc. make coverage available for a limited time throughout the year.
The Marketplace
The Health Insurance Marketplace was created by the ACA in 2010 and it is managed by each state. To apply for the Marketplace you can go to www.healthcare.gov and fill out the questions to determine your income, household size, and what plans or subsidies you qualify for. You can also compare plan options to find the right fit for you.
Health Insurance outside of Marketplace
Many insurers that offer policies through the Marketplace also offer identical policies outside of the Marketplace. These programs are not reviewed by the federal government and are often used by individuals who know they don’t qualify for discounts or tax benefits within the Marketplace system. Make sure that any plans you are offered are still ACA compliant so you aren’t liable for penalties.
COBRA
The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers and their families who lose their health benefits the right to choose to continue group health benefits provided by their group health plan. These plans are expensive, but if you are currently receiving health treatments for longer term illnesses and can’t afford to be without insurance it can be cheaper than paying the bills directly. If you opt to use COBRA you should try to find an alternate health care plan as soon as possible.
Medicare
Medicare is the government health plan for people who are 65 or older, individuals with disabilities, and others who qualify because of limited income or resources. It’s a fee-for-service plan with two parts, Hospital Insurance (Part A) and Medical Insurance (Part B). After you pay a set deductible, Medicare pays the rest of the bill. However it doesn’t pay for drug coverage. That is an additional cost (Part D). It also doesn’t pay for most dental care, eye care, or hearing exams among other things. If you are on Medicare it may be beneficial to buy supplemental insurance.
Medicaid and CHIP
Medicaid or CHIP the Children’s Health Insurance Program are also options for low to no income individuals, most specifically those unable to work because of age or health problems. CHIP provides medical coverage to children. and in some state’s pregnant women, whose incomes are too high to qualify for Medicaid but can’t afford private insurance.
Resources
Different types of Health plans: how they compare
What is the Health Insurance Marketplace?