A information to discovering the most effective and most cost-effective medical insurance

But those without access to company-sponsored coverage will have to look into their own health plan and pay the full cost of the premium, which begs the question – where do they find the best affordable health insurance policies?

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How does health insurance work in the US?

Medical insurance is a policy designed to help offset the cost of medical treatment by paying part of the doctor’s and hospital fees incurred. According to the state health insurance exchange, HealthCare.gov, this type of coverage comes in a variety of forms designed to meet the different needs of policyholders. These are:

  • Exclusive Provider Organization (EPO): This is a managed care plan in which benefits are only covered if the physician, specialist, or hospital is part of the plan’s network—except in emergencies.
  • Health Maintenance Organization (HMO): This type of health insurance plan often limits coverage to care provided by physicians who work for or contract with the HMO. Policies generally do not cover off-network care except in an emergency. Plans may also require a policyholder to live or work in their service area in order to be eligible for coverage. HMOs typically provide integrated care and focus on prevention and well-being.
  • Point of Service (POS): With this type of plan, policyholders pay less when accessing doctors, hospitals, and other healthcare providers that are part of the plan’s network. POS coverage also requires the insured to get a referral from their GP so they can see a specialist.
  • Preferred Provider Organization (PPO): This healthcare plan allows policyholders to pay less for healthcare if they choose to receive treatment from providers in the plan’s network. However, you can also access doctors, hospitals and providers outside the network without a referral and for an additional charge.

Health insurance policies are also offered in four categories depending on how the cost is divided between the policyholder and the insurer. These are bronze, silver, gold, and platinum, also known as the “metal tiers.” This is how the costs are divided according to HealthCare.gov.

  • Bronze – 60% health insurer, 40% policyholder
  • Silver – 70% health insurer, 30% policyholder
  • Gold – 80% health insurer, 20% policyholder
  • Platinum – 90% health insurer, 10% policyholder

However, the agency noted that the category “[has] have nothing to do with it [the] quality of care.”

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What does health insurance cover?

One of the changes introduced by the Affordable Care Act (ACA) to the country’s healthcare system is the standardization of insurance benefits. Previously, the benefits offered by insurance companies varied significantly between policies. Currently, US health insurance plans are required to cover a list of 10 “essential health care benefits” consisting of:

  • Ambulatory patient care
  • emergency services
  • hospitalization
  • Pregnancy, maternity and newborn care
  • Mental health and substance use disorder services, including behavioral therapy treatment
  • Prescription drugs
  • Rehabilitation and habilitation services and equipment
  • laboratory services
  • Preventive and wellness services and treatment of chronic diseases
  • Pediatric services including oral and eye care

Birth control and breastfeeding coverage are also required benefits. Adult dental and eye care, on the other hand, are not considered essential services but are available as optional add-on services along with medical management programs.

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What factors affect the cost of health insurance?

According to HealthCare.gov, insurance companies can only consider five factors when setting premiums under the Health Care Act. These are:

  • Age: Premiums for older people can be up to three times higher than for younger people.
  • Location: Differences in competition, state, local regulations, and cost of living also affect health insurance rates.
  • Tobacco Use: Insurers can charge tobacco users up to 50% more than non-smokers.
  • Individual vs. family enrollment: Insurance providers may also charge more for a plan that also covers a spouse and dependents.
  • Plan Category: The different plan categories – Bronze, Silver, Gold and Platinum – also affect the award prices.

The government website warned that states can limit the impact of these factors on insurance rates, but have prohibited them from using medical history and sex in calculating premiums.

“Insurance companies cannot charge women and men different rates for the same plan,” explained HealthCare.gov. “You also cannot consider your current health condition or medical history. All health insurance policies must cover treatment for pre-existing medical conditions from the day coverage begins.”

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Where can you find the cheapest health insurance?

While employer-sponsored insurance isn’t an option, according to private fintech company MoneyGeek, there are multiple ways for many Americans to take advantage of cheap health insurance plans. Here are some of them:

1. Medicaid

Medicaid is the cheapest option, according to the company, but applicants must meet certain eligibility requirements that vary by state in which they live.

The government-funded program provides free or affordable health insurance coverage to individuals and low-income families. Currently, 38 states allow income as the only qualification. The limit is typically 133% of the federal poverty line (FPL), which is about $17,774 per person. A larger household means a higher income limit. The income limit is the same for almost all 38 states, with the exception of Alaska and Hawaii.

The table below from MoneyGeek shows the Medicaid shutdown limit for each household size.

household size

income limit

Alaska cut off

Cut off Hawaii

1

$17,774

$22,204

$20,452

2

$24,040

$30,043

$27,655

3

$30,305

$37,881

$34,859

4

$36,570

$45,719

$42,062

5

$42,835

$53,558

$49,266

6

$49,100

$61,396

$56,470

7

$55,366

$69,235

$63,673

8th

$61,631

$77,073

$70,877

Alabama, Florida, Georgia, Kansas, Mississippi, North Carolina, South Carolina, South Dakota, Tennessee, Texas, Wisconsin and Wyoming, meanwhile, are establishing additional eligibility criteria, including child guardianship or age over 65.

Medicaid plan holders have access to free emergency care, family planning, and health care for children. Depending on the state and income level, they may also have co-payments for doctor visits, inpatient hospital treatment, and prescription drugs.

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2. Health Insurance Marketplace

For many low-income Americans, their state’s health insurance market is another good place to start looking for a policy that meets their needs. Here they can compare plans for coverage and affordability, and get answers to any health insurance questions or clarifications. This is also where they can find out if they are eligible for Medicaid, tax credits, or lower premiums. Parents can also register their children for the children’s health insurance program (CHIP) via the marketplace.

Individuals can enroll in a health insurance plan during an open enrollment period, which typically runs from November 1 through January 15. But even after that period has expired, they may still be able to secure coverage if they have experienced a qualifying life event. including getting married, having a baby and losing their previous insurance. Insurance coverage begins about two to six weeks after enrollment.

3. Medicare

US citizens and permanent residents age 65 and older can get the cheapest health insurance through another federally funded program called Medicare. The program is also accessible to younger people with certain disabilities and people with end-stage renal disease (ESRD) or permanent kidney failure requiring dialysis or a transplant.

Medicare consists of four parts:

  • Medicare Part A (hospital insurance): This includes inpatient hospitalization, care in a qualified nursing facility, hospice care, and some home care.
  • Medicare Part B (health insurance): This pays for certain medical services, outpatient care, medical care, and preventive care services.
  • Medicare Part C: Now called the Medicare Advantage Plan, this combines all of the benefits and services of Parts A and B into one plan.
  • Medicare Part D (prescription drug coverage): This helps cover the cost of prescription drugs, including most recommended vaccinations or vaccines.

The first two parts are offered by the government, while the last two can be purchased through private insurance providers.

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4. Short-term health insurance plans

Short-term health insurance plans are designed to fill temporary coverage gaps and provide coverage for up to a year, so benefits are not as comprehensive as policies on the market. Short-term plans can also be canceled at any time without penalty.

Since these are not regulated by the state, the benefits, coverage limits, exclusions and premiums vary greatly depending on the health insurance company. The insurance cover usually includes visits to the doctor as well as emergency and preventive measures. Some plans may also cover prescription drugs. Pre-existing conditions are not insured.

Applicants may also be required to complete a medical questionnaire to assist the insurance carrier in deciding whether they should be accepted for coverage.

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