Understand health insurance

Health insurance law has taken many twists and turns lately. It serves your finances well to keep up with legislative changes and understand health care choices. The type of plan you need depends on your age and your anticipated needs. Two main categories into which most plans fall include:

  • Preventative and routine care. This includes regular checkups, vaccines, vision and dental plans. If you are under 26, you may get this coverage through your parents’ plans. Your school may offer group plans or you can purchase coverage through the Affordable Care Act (ACA). If you are working, take advantage of group plans your employer offers to save money. Between jobs, you may need to purchase individual short-term or COBRA coverage (which offers continuing coverage to individuals who would otherwise lose health benefits).
  • Catastrophic coverage. This coverage includes hospitalization, disability and long-term care options. Hospitalization may fall under your medical options, but you can also purchase these plans individually. Your employer may offer options for short- and long-term disability. If you need additional care for long-term illness or injury, you will need to look into long-term care options. Long-term care provides assistance in daily living activities, and premiums increase as you age.

Before you start comparing plans, understand the terminology specific to health care so you know your costs.

  • Co-payment: A flat fee you pay, usually for medical visits or prescriptions.
  • Coinsurance: The amount you pay as a percentage for a covered service after your deductible and co-payment are satisfied. For example, 70/30 means the insurance company pays 70 percent and you pay 30 percent.
  • Deductible: The amount you pay on a claim before your insurance participates in the claim. If you are healthy, you can save costs on your premiums by choosing a plan with a higher deductible.
  • Lapse: A period during which premiums are not paid, usually resulting in a termination of the insurance. It is vitally important to continue with one health insurance before the next one kicks in, even if between jobs.
  • Out-of-pocket maximum: The total amount you may pay in one year for expenses related to health care. This does not include premiums.

Health insurance is confusing. CashCourse has many topics related to health insurance, the Affordable Care Act and how to purchase insurance. Healthcare.gov Links to an external site. also offers numerous resources for the open marketplace.

 

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