Health insurance. You know you need it. But it’s complicated, and there’s a lot to learn and sort through when choosing a plan. If you feel like you’re ready to give up on it all, don’t! BiG is here to answer your most frequently asked questions about health insurance, and get you ready for Open Enrollment (which is right around the corner). Stick with us, and you’ll be armed with all the knowledge you need to make an informed decision about your healthcare.
Wait, What’s Open Enrollment?
First things first. If you’re looking for health insurance you need to know when you can actually purchase a plan. Unless there are extenuating circumstances, you can’t just jump in and buy an Affordable Care Act (ACA) plan at any time; you need to wait for Open Enrollment, which is November 1 – December 15. Coverage for plans bought during this time begins on January 1.
If you miss the Open Enrollment Period, you’ll have to wait until the next year unless you have one of those extenuating circumstances that we mentioned, which the ACA calls “qualifying events.” If you experience a qualifying life event, then you qualify for a Special Enrollment Period (SEP), meaning that you will be given a limited time outside of Open Enrollment to sign up for a plan.
These qualifying events include things like:
- Losing your job and your insurance
- Getting married or divorced
- Having a baby
- Experiencing a change in income that affects your ability to pay for your plan
- Turning 26 and getting kicked off of your parents’ insurance plan
How Does a Deductible Work?
When you’re shopping around for plans, one of the terms that you see most often is “deductible.” Some plans have high deductibles, some have lower ones, but they usually all have them. You have to pay a premium each month to keep coverage, but what does it mean when you have, for example, a $1500 deductible to meet in addition to that monthly premium?
A deductible is the amount you pay out-of-pocket for covered services before your health insurance plan will begin to pay for your services. Let’s say you go for the plan with the $1500 deductible. That means that you will have to pay for any medical services you need until the amount you’ve paid equals $1500. Once you hit that amount, your health insurance plan will start paying its share.
Plans with a higher deductible tend to have lower monthly premiums, and plans with lower deductibles tend to have higher monthly premiums. There are pros and cons to each of these types of plans, and each one is suited to different types of people. For example, if you are relatively young and healthy and don’t think that you’ll spend enough on healthcare to meet your deductible for the year, then you might want to save money on your monthly premiums and choose a high deductible health plan. Qualified HDHPs also offer you the option to contribute money to a health savings account (HSA). These accounts allow you to put aside money on a pre-tax basis to use for qualified medical expenses like copays, prescription medications, and even glasses.
Plans with lower deductibles and higher premiums, on the other hand, are usually recommended for people who think that they are going to access more healthcare services throughout the year. This includes people with young children or those with chronic health conditions. If you tend to rack up a lot of medical expenses, then you’ll quickly meet your low deductible and your insurance will start paying its share, making your higher monthly premiums worth the cost.
What’s the Difference Between a Copay and Coinsurance?
Your out-of-pocket expenses don’t end with your deductible. There are also copays and coinsurance. Copays are set amounts that you have to pay to your medical provider every time you see them. For example, your plan may have a $20 copay to see your primary care physician for a non-preventive service and a $50 copay to see a specialist. That amount is set by your plan and needs to be paid for every visit, whether or not you’ve met your deductible.The only exception to this is for preventive care visits, including things like annual checkups, well-woman visits, many immunizations, and certain screenings.
Coinsurance, on the other hand, only comes into play after you’ve met your deductible. Once you’ve met your deductible, your plan will begin to cover a percentage of your medical costs – but it usually won’t cover all of it. Coinsurance is the percentage of your costs that you are responsible for paying. For example, if you have an 80/20 plan, that means your insurer will cover 80% of costs and you will pay 20% until you reach your out-of-pocket maximum for the year. Remember, your plan will only pay for 80% of covered services; if something is not covered by your plan, you’ll have to pay the entire bill.
Covered, Covered in Full? Is There a Difference?
Why are some things “covered” and others “covered in full”? If a medical service is covered by your plan, that basically means that your plan will pay for it, but only the percentage outlined in your health insurance plan. You’ll need to meet your deductible, pay any necessary copays, and then use your coinsurance.
But covered in full? Here’s a little bit of good news! If something is covered in full, that means you don’t have to pay anything for it! Usually, services that are covered in full are considered “essential” or “preventative,” like your annual physical.
Every insurance plan covers different services in different ways, so if you are unsure what is covered under your plan, you can either check the Summary of Benefits and Coverage or call your insurance company. If you’re still looking for a plan, and want to know what each one covers, ask one of our agents!
What Do the Different Metal Tiers Mean?
Our agents can also help you determine which type of plan is right for you. You can choose a high deductible and lower premium, or a higher premium with a lower deductible, or a plan with an 80/20 coinsurance requirement or a 60/40 plan…But what does it mean that one plan is “Gold” and another is “Silver”? Does it mean that one provides access to better care? Short answer: no.
The ACA established four metal tier plan categories for health insurance plans: Platinum, Gold, Silver, and Bronze. The difference between these plans is generally the amount you will pay out-of-pocket versus the amount your plan will pay for. Platinum and Gold plans have higher monthly premiums but lower deductibles, making them more popular with people who need a lot of medical care. Silver and Bronze plans, on the other hand, have lower monthly premiums and higher deductibles, making them better suited to younger, healthier people who don’t go to the doctor often.
Do I Need to Stay In-Network?
One more thing you might notice about the plans you’re choosing between is that they each have a “network” of doctors/providers. While you aren’t technically required to see one of these doctors, you’ll save a whole lot of money by doing so. A plan’s network is basically a group of high-quality healthcare providers that have a contract with your insurance company. Your insurance company sends patients their way, and they agree to accept discounted rates. For example, a provider might generally charge $150 for a service, but, as part of an insurance company’s network, they might agree to take $90. Staying in-network in this case would save you at least $60.
Well, that wasn’t so bad, was it? You survived your crash course in health insurance FAQs. If you still have questions, we’ve got answers. Come to BiG for all your insurance needs, from answers to the most basic (or most complicated) questions to quotes on all the plans available in your area. We’ll talk you through it all, and get you the best plan at the best price for you.