Health insurance is essential in case you ever need medical attention. It prevents you from paying for expensive services, such as hospitalization and surgery. Many people are provided coverage through their work or others by the government. However, understanding how this system works can be confusing for younger adults. So, here are a few basics you should know.
1. How to Get Coverage
The first step in understanding health insurance is knowing where to look. There are multiple ways you can receive coverage. If you’re under 26 years old, you can be on your parent’s plan, even if you’re married or not living with them. This can help you to receive coverage while you’re still getting settled. Suppose you’re attending school or still looking for a full-time job. You might not currently have employee benefits.
Here are a few more plans to consider:
- COBRA. COBRA is a short-term plan to prevent people from suddenly losing their coverage. It allows them to continue buying their current health plan for a limited time.
- Short-term policy. Some companies temporarily cover students between college and their first job. These plans are usually pretty basic and cost-effective.
- Employer coverage: This is the most common and affordable option. Some offer coverage from the start and others need you to work for a certain amount of time.
- Individual policy. Buying personal health insurance can be a more expensive option. You may pay more if you’re considered a higher-risk individual, such as being a smoker.
- The Health Insurance Marketplace. This option helps people choose the best insurance plan if they need to buy it independently. It’s also sometimes called a Health Insurance Exchange.
2. Mental Health Services Aren’t Always Well Covered
Mental health conditions are a rising concern, especially after the pandemic. In 2008, the Mental Health Parity and Addiction Equity Act encouraged mental health benefits to be at the same level as physical ones. However, many plans still don’t provide adequate coverage.
Often there aren’t enough in-network providers, leading to longer wait times and farther commutes. Another issue is there are restrictive standards that limit coverage. For example, some companies focus on treating acute symptoms rather than underlying ones. This makes it harder for people with a long-term mental illness to qualify.
However, Biden addressed these concerns in a speech on March 1st, 2022. He proposed all health care plans cover mental health services with adequate network providers, including three behavioral health visits a year with no cost-sharing.
3. How to Pay For Your Plan
After you’ve done your basic research, you want to understand finances. Figuring out how to pay for the policy is critical. The amount you pay depends on your specific plan. In fact, in 2020, annual premiums cost around $21,342 for a family of four. You pay a fixed rate each month for many programs, called a premium. You might also pay whenever you receive medical care or get a prescription refill.
These payments include the following:
- Deductible: A deductible is what you pay at the beginning of the year before the provider starts covering services.
- Copay: This is a set fee you pay after visiting a doctor or other medical services.
- Coinsurance: It’s the percentage you pay for specific covered services.
- Out-of-pocket maximum: This is the highest amount you have to pay within a given period for all covered services.
4. How to Find the Right Individual Policy
If you can’t get insurance from an employer or a state-funded program, you must buy your own. When shopping, consider the cost of premiums and deductibles and the outside services. For example, can you visit any doctor or healthcare facility? Some plans may have lower premiums but fewer health care providers to choose from. Also, if you’re hoping to save money, look for a plan with a higher deductible you can use with a health savings account.
These plans also have levels of coverage, including gold, silver, bronze or catastrophic.
They vary in premium and out-of-pocket costs. So, if you have a medical condition and require multiple services, a gold plan may be best. However, a bronze or silver plan might work better if you only visit the doctor a few times a year.
Once you choose your level, you want to pick a specific plan. Here are the main options you have to choose from:
- Indemnity Plans: On this plan, you can visit any doctor at any time. Then you pay them upfront and file the claim with your insurance company, which pays you back part of the cost. They often do not cover preventive care, like physicals, and have higher premiums.
- Managed Care Plans: Alot of employee coverage is managed care policies. The insurance company works with health care providers to offer low-cost care. This plan also has four basic types: HMO, PPO, POS and EPO.
- Consumer-Driven Health Plan (CDHP): This is when you set aside money in a health insurance saving account. So, you’re in charge of how to handle the cash to pay for health care services. It does come with higher deductibles, though.
5. A Plan Through Your University May Not Be Enough
While this is an easy and cost-effective way to get insurance, it might not be enough. Keep in mind it may only cover services on campus. However, it might not be covered if you get an x-ray off-campus.
Also, suppose something happens when you’re on break. Then your current plan might not cover outside providers. So, talk with your Health Center to see what exactly is covered. Some programs may offer services that require just a fee and others that need insurance.
However, many schools require proof of health insurance. So, you can stay on your parent’s plan or a private one. Also, if you qualify as a low-income individual, you can receive Medicaid.
6. Finding Affordable Programs
Some people may worry about the expenses associated with the plan. However, between tax credits and Medicaid, you can find affordable programs. If you apply for coverage through The Marketplace, you can see if you qualify for a premium tax credit.
These credits are based on your local residence, household income and coverage level. If you’re eligible, apply the credit to your monthly premium. Then The Marketplace will send it directly to your insurance company.
Also, consider subsidies for low-income consumers, reducing out-of-pocket costs. You must make a certain income level and be in a state that didn’t expand Medicaid to qualify.