healthcare.gov<\/a>\u00a0for more information.<\/p>\nEmployers pay an annual premium to an insurance provider offering a specific plan or group of plans. In exchange, the provider pays the healthcare costs for people insured under the plans.<\/p>\n
Most employers pay a percentage of the premium and you pay the balance, which is deducted from your paycheck. The good news is that this money is pre-tax dollars, so it reduces what you owe on taxes. Employers typically pay a larger share than employees do. But if you can add your partner to your plan, you are likely to be responsible for more, or all, of the premium for him or her.<\/p>\n
The majority of health insurance plans have a deductible. That\u2019s the amount you have to pay yourself, out-of-pocket (OOP), before your plan will begin to pay its share of your healthcare costs. The premiums you pay to be covered don\u2019t count toward the deductible.<\/p>\n
In most plans, preventive services, such as cancer screenings and immunizations, are covered without cost to you, but they usually don\u2019t count toward your deductible. Neither do services that your plan doesn\u2019t cover, such as things like cosmetic surgery.<\/p>\n
If you leave a job where you\u2019ve had health insurance, you may be able to continue that coverage until you\u2019re eligible for a new employer\u2019s plan. It\u2019s very expensive\u2014typically you pay 102% of your employer\u2019s cost for the insurance. And it\u2019s not always handled effectively. But this option, called COBRA, is definitely better than not having insurance if you need medical care before you\u2019re covered under a new employer\u2019s plan.<\/p>\n
One of the big issues with health insurance, in addition to being expensive, is that it\u2019s complicated. There are multiple providers, each with several types of plans, each working differently from the others. That matters because you\u2019re likely to find yourself in a position of having to choose among alternatives. To end up with a plan that works for you means you have to understand the fine print.<\/p>\n
Managed care plans have a list of participating healthcare providers. The plan negotiates fees with its providers, and your cost for each visit to a provider is set by your employer\u2019s plan. It could be a copay, which is a dollar amount, like $25, or coinsurance, which is a percentage of the total, like 10%. But if you use a provider who isn\u2019t on the plan\u2019s list, you\u2019ll be responsible for a much higher portion of the cost and maybe even the whole amount.<\/p>\n
Fee-for-service plans allow you to use any provider you wish. Your plan will pay a percentage, often 70% or 80%, of the cost it approves for a particular service. However, the cost it approves may be less, sometimes much less, than the actual cost of the service. So you could end up owing your coinsurance plus the amount that wasn\u2019t approved.<\/p>\n
High deductible health plans (HDHPs) are managed care plans with substantially higher deductibles than other plans but also lower premiums, sometimes much lower. The federal government sets the minimum allowable deductible each year and also the maximum amount you can be required to pay for covered services from your plan\u2019s list of preferred providers. If you reach that maximum, the plan covers the full cost of any additional qualifying expenses.<\/p>\n
If your HDHP meets federal standards by charging at least the minimum deductible the government has set for the year, you\u2019re eligible to open a Health Savings Account (HSA). You contribute and in some cases your employer may contribute as well. Contributions are tax free as are withdrawals if you use them to pay qualifying expenses, such as medicines, eyeglasses or contacts, bandages, acupuncture\u2014it\u2019s a long list. Any amount you don\u2019t spend in a calendar year can be rolled over for use in following years.<\/p>\n
Many people face the question of whether or not to go with an HDHP. It costs less upfront, which is appealing. And putting money in an HSA seems smart. If you\u2019re young and healthy, it may save you some money.<\/p>\n
But you\u2019ll want to know how you\u2019d pay big medical or hospital bills if you needed medical care and hadn\u2019t reached your deductible. And you should honestly consider whether you\u2019d be tempted to skip seeing a doctor if you had to pay the full cost of the visit as that would defeat the whole purpose of having health insurance.<\/p>\n
Coronavirus Testing and Care<\/strong><\/p>\nThe Families First Coronavirus Response Act designates that testing for COVID-19 should be free to all Americans, whether they are insured or not. Care for coronavirus, on the other hand, may or may not be covered. Some insurance agencies are waiving costs like copays and deductibles, but some are not. Those who are uninsured may be able to get assistance from the government to help with costs for care.<\/p>\n