What is health insurance and why do you need it?

Health insurance can be confusing, and it’s not something that most people want to spend much time or energy thinking about. However, if you don’t have health insurance, then you could end up paying thousands of dollars each year in medical bills—which would be far better spent on your family’s needs or entertainment costs. In this blog post, you’ll learn all about health insurance, including what it is, how to pay for it, and whether or not you need it in the first place.

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Why Do I Need Health Insurance?

Health insurance, or medical coverage, pays for many of your vital medical services. But these days, who’s responsible for paying those bills? You are. While Medicare covers some medical costs, that program doesn’t kick in until after you reach 65.

Types of Health Insurance

It’s important to understand what health insurance coverage can offer, as well as which type will best suit your needs. Health coverage can be categorized into four groups: public, private, employer-based and individual. Within each of these categories are different levels of coverage (e.g., bronze or gold plans) that you should research before choosing a health plan.

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Cost to Get Insurance

Insurance premiums vary widely based on factors such as age, industry, location, and previous medical history. The cost of health care has been rising steadily for years, making it one of Americans’ largest expenses. It's important to know that your health plan will pay only a portion of covered services—you’ll likely have out-of-pocket costs in addition to your monthly premium.

Rates by Age

What are your rates as a percentage of what other individuals will pay for a similar plan, based on your age? For example, if someone five years older than you has to pay $1,000 per month for their plan while you have to pay $900 per month for yours, then your rate (to them) would be 90% of theirs. However, if they paid $1,300 per month while you paid only $700 per month, then your rate (to them) would be 70% of theirs.

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Where Can I Get Health Insurance?

The easiest way to find a health insurance plan that’s right for you is to visit your state’s Health Insurance Marketplace. In addition to showing your options, enrolling online through a marketplace also provides information about tax credits or subsidies that can help lower your monthly premiums. Check out HealthCare.gov or call 1-800-318-2596 (TTY/TDD users should call 1-855-889-4325) for more details.

How Much Does Insurance Cost Per Month/Year?

It depends on what type of coverage you have. If your plan comes from your employer, ask your HR department for an estimate of how much that coverage will cost each month or year (depending on whether your premiums are paid bi-weekly or monthly).

Deductibles/Co-Pays vs. Premiums/Deductibles

Deductibles, co-pays, premiums—all of these terms can be confusing. But they’re worth getting to know because they are central to your health care. Here’s a quick breakdown: Deductibles are set amounts of money that people pay out-of-pocket before their insurance kicks in. Co-pays are smaller payments made when using your health plan.

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Monthly Out-of-Pocket Maximum Limits

All new group plans issued after January 1, 2014 will include an out-of-pocket maximum limit. The out-of-pocket maximum limit determines how much you can spend on covered benefits under your plan within a single year, before your insurer begins to pay 100% of covered costs. It includes deductibles, copayments, coinsurance and other forms of cost sharing.

How much does Obamacare cost per month (Obamacare premiums)?

What Are Obamacare Premiums? How Much Do They Cost for Individuals in 2016? Updated for 2016, here’s an overview of how much does Obamacare cost per month (Obamacare premiums) once open enrollment begins. The answer to how much does Obamacare cost per month (Obamacare premiums)? depends on where you live, your age, your income, whether or not you have children. Here are some examples of quotes from different insurers in 2016 based on different variables. For example, a plan with a $3,000 deductible costs $207 per month in Oklahoma City but only $163 per month in New York City. In other words, there’s no simple way to determine how much does Obamacare cost per month (Obamacare premiums). It varies by state and by insurer.

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Types of Plans - In Network, Out of Network, HMO, PPO, EPO, POS, HSA Compatible Plans and Check With Your Employer For Discounts!

Before purchasing a plan, make sure that your choice of doctors is in-network with your chosen health plan. If they aren’t, your out-of-pocket expenses will increase significantly. And while some people believe HMO (Health Maintenance Organization) plans are cheaper than PPO (Preferred Provider Organization) plans, there’s little difference when factoring in annual deductibles for both types of insurance plans. When comparing prices between different providers, be sure to ask about discounts offered by employers or trade unions; many companies offer significant reductions on their employees’ monthly premiums. Also keep an eye out for HSA compatible plans; these provide additional tax benefits to help offset medical costs.