Finding the right health insurance plan for your specific needs calls for a little bit of planning. You have to balance your budget, as well as current and future health needs, against the insurance plans you could buy.
Additionally, understanding what certain insurance terms mean can help you be more informed when choosing a plan. Knowing the difference between a deductible and a premium, as well as other health insurance words, can also help you protect yourself from high out-of-pocket costs.
Before deciding which health plan will meet your needs and budget, it’s helpful to know what insurance options are available to you. Based on your age, income or employment situation, you may have different choices.
Employer-based health insurance
You or your spouse may work for a company that offers health insurance benefits. Typically, you are offered the chance to enroll in a health plan soon after you are hired and can make any changes to your plan selection during the annual open enrollment period. Health plans vary by employer, so talk to your human resources department to learn more about your options.
Affordable Care Act (ACA) plans
When the Affordable Care Act was passed in 2010, more uninsured Americans became eligible to buy private health insurance through a state or federal marketplace. The ACA provides lower income individuals and families with tax credits to assist them with monthly premium costs, as well as cost-sharing reduction plans that provide medical services and benefits at a lower cost. It also ensures all plans cover ten essential health benefits – including free preventive care – and prevents health insurance companies from refusing coverage to anyone who has a preexisting health condition.
If you are self-employed, your employer doesn’t offer health insurance, or a job-based health plan is not affordable for you or your family, you can buy an ACA health plan from Idaho’s state marketplace, Your Health Idaho.
Traditional short-term plans
Traditional short-term health plans can cover gaps in health insurance coverage, like when you’re in between jobs or enrollment periods. These plans offer limited coverage and are not designed to replace essential health coverage. A traditional short-term health plan may only provide coverage for urgent care visits, doctor office visits and emergency services. These plans do not cover preexisting health conditions including pregnancy.
Please note that a traditional short-term plan doesn’t offer the comprehensive healthcare coverage that an ACA plan or Enhanced Short-Term plan does. Before applying to a traditional short-term plan, check that the plan will cover your basic healthcare needs.
Medicare is a federal health insurance program for people who are 65 or who have a qualifying disability, such as End-Stage Renal Disease (ESRD) or amyotrophic lateral sclerosis (ALS), also known as Lou Gehrig’s disease.
Created in 1965, Medicare is split into four parts that cover different areas of health coverage. There are a lot of myths about Medicare, and many people don’t realize that it doesn’t cover all of their healthcare costs. Understanding what the difference is between Medicare Part A, Part B, Part D and Medicare Advantage (also called Part C) can help you make sure you get the coverage you need.
As you decide between insurance plans, figuring out what you’ll pay and what the plan will cover can help you better guess your costs. This starts with figuring out what different insurance-related terms mean.
Advance premium tax credits (APTC): This is a federal tax credit offered to eligible individuals and families that helps lower the cost of monthly premiums for health plans available on the ACA marketplace. Eligibility is based on household income and size.
Cost Sharing Reduction (CSR): A discounted medical plan that lowers the amount you have to pay for deductibles, copayments, coinsurance and out-of-pocket maximum. Eligibility is determined by household income and size. CSRs are only available for Silver plans and must be purchased through Idaho’s state exchange, Your Health Idaho.
In-network providers: These providers contract with health insurance companies and agree to charge members in the network less money for the care they give.
Out-of-network providers: These providers haven’t negotiated rates with the health insurance company and may charge you more money if you go to them.
Copay: A copay is a set amount of money you’ll pay to a doctor, hospital or clinic for services. Copay amounts can be different for prescriptions, specialist visits or visits with your regular doctor. A copay applies before the deductible and only contributes towards your annual maximum out of pocket.
Deductible: A deductible is a set amount of money you’ll need to pay before your full benefits kick in for your plan. The deductible resets at the beginning of the plan year, so you’ll pay this amount yearly.
Premium: A health plan premium is the monthly bill you pay to your health plan for coverage. If you have a health plan from work, your employer may pay a part of the premium as part of your job benefits, and the rest may be deducted from your paycheck. You could pay all, some or none of the premium, based on the type of insurance you have.
Coinsurance: If your plan has coinsurance, then it will kick in once you’ve met your deductible. With coinsurance, you split the cost of services with your health plan. For example, if you have a 30% coinsurance, then when you meet your deductible, you’ll pay 30% of the cost for a service and your health plan will pay the remaining 70%.
Out-of-pocket (OOP) maximum: An OOP maximum is what you will pay for healthcare each plan year up to this maximum amount. If you meet the OOP, your health insurance plan may cover 100% of your costs after this. There may be an Individual and Family OOP maximum in your plan. A family could meet the OOP maximum for one person and still need to pay for healthcare costs for other family members. The insurance premium you pay each month is a separate expense and does not contribute towards your OOP maximum.
Health insurance can be confusing when you don’t know how to narrow down your options. Working with someone who can help you identify your specific needs and then compare plans that best fit those needs and your budget can go a long way. That’s why many people choose to work with a health insurance broker.
A health insurance broker can guide you through the health insurance plans available to you. Working with a broker is free to you. Using a broker won’t affect the cost of your health plan premium and you won’t pay any fees to work with one.
Health insurance offers safety and peace of mind. It can protect you from unexpected, costly medical bills and lets you visit the doctor regularly so you can stay healthy.
For more information about health insurance, read our Health Insurance 101 Blue Bulletin articles. We have topics there that can help you learn how health insurance works, including definitions for common terms and information about different health plans.
Posted: November 22, 2023
Written by: Blue Cross of Idaho