In Gallup’s 2019 survey on what Americans worry about, the availability and affordability of healthcare top the list. Whether it’s actual health concerns or the cost of coverage, most Americans agree that healthcare keeps them up at night.
Even though the passage of the Affordable Care Act in 2010 expanded coverage to millions, there remains a significant portion of Americans who do not have a healthcare plan. Statistics suggest nearly 10% of people under 65 years old in the United States are uninsured.
Forty-five percent of those cite an inability to afford healthcare coverage as their primary obstacle. In fact, in 2016, one in six Americans were carrying an overdue medical bill on their credit record, amounting to a collective $81 billion in healthcare debt.
Despite the cost, healthcare coverage is important
The importance of having healthcare coverage is clear even though the penalty imposed for not carrying insurance under the ACA is no longer in effect. Studies have shown that people with health insurance plans pay less in out-of-pocket medical costs. They are also less likely to go bankrupt as a result of medical bills than their uninsured counterparts.
Further, people without healthcare coverage tend to skip preventative measures that could have helped them avoid expensive medical emergencies. The HHCI (Healthcare Cost Institute) reports that in 2017, the average cost for an emergency room visit was $1,389, a rise of 176% over the last decade. That’s nearly half of what it costs for the average individual to pay premiums for an entire year’s worth of health insurance.
It seems the cost of not having healthcare may be more expensive to the uninsured over time, especially given the government-subsidized options available in the current insurance marketplaces. So why do we continue to have some many uninsured adults clogging the healthcare system and struggling under medical debt?
One of the complications of the current healthcare system is that consumers are not well-educated about healthcare coverage. And they may not understand their eligibility for certain kinds of plans like Medicare or Medicaid. Confused by a labyrinth of options, they may end up choosing a coverage that doesn’t provide the benefits they need.
How to choose the right healthcare plan
Too often, we approach healthcare plans as a one-size-fits-all approach and trust our employers or the HR department to provide the best options. Studies indicate, however, that patients who are encouraged to take a more active role in selecting and understanding their healthcare coverage, make better use of their benefits, and report more positive experiences with healthcare overall.
While cost may be a top priority, it shouldn’t be the only criteria we use to select coverage. Any discussion of healthcare plans needs to weigh the balance between lower premiums and higher deductibles. Here are a few other considerations to review before shopping for the right healthcare plan to fit your health situation and your budget.
What type of healthcare plan do you need?
There are different kinds of plans, and the type of plan you select may limit which providers you can choose and what your out-of-pocket expenses will be. EPOs (Exclusive Provider Organization), for instance, don’t allow you to go out-of-network unless it’s an emergency. HMOs (Health Maintenance Organization) are also popular options. However, some, but not all HMOs may require you to have a primary care doctor refer you to specialists as needed. Point of Service (POS) plans and Preferred Provider Plans (PPS) are usually more flexible and allow more out-of-network visits without referrals.
Catastrophic health insurance plans are an option for younger adults, but they usually have some caveats attached. You’ll need to be comfortable paying an astronomically high deductible before the bare-bones coverage kicks in. But it’s better than no coverage at all, and it will undoubtedly save you from medically induced bankruptcy.
What kind of deductible is best for you?
Some plans, like HDHPs (High-Deductible Health Plans), have higher out-of-pocket cost thresholds you must meet before coverage kicks in. A deductible is an amount you are expected to pay upfront for health services.
Once you reach the limit, your provider picks up some or all of the rest of the tab according to percentages detailed by your benefits. High deductible plans tend to have lower premiums and are best for younger adults who don’t regularly need to see a doctor but want coverage for medical emergencies.
Do you need a Health Savings Account (HSA) or a Flex Spending Account (FSA)?
Traditional healthcare plans have several benefits, including things like wellness plans and the option of establishing a health savings account. HSAs let you contribute a certain amount of money tax-free into an account that can be used to pay for qualified medical costs. FSAs work similarly, but the money contributed needs to be used within the same calendar year and isn’t eligible to roll over.
These accounts can be particularly helpful if you’ve got some significant medical expenses looming, such as braces for a teenager or laser surgery to correct your vision. Simply squirrel away a specified amount from your paycheck, and at least you’ll get some tax savings benefits on those out-of-pocket health costs.
Where can I find healthcare coverage?
Many people are under the mistaken impression that if they work part-time or for a small employer, they’re out of luck when it comes to cost-effective healthcare coverage. There are many places you can research, compare, and purchase healthcare plans, whether you work with your employer, an agent, or directly with the provider.
The easiest and usually cheapest option under the current system is going to be securing coverage through your employer. But if you or your spouse doesn’t qualify for healthcare through your workplace, you can explore and compare plans via insurance brokers, insurance websites and aggregators, or the state and federal marketplaces. You may even qualify for COBRA or mini-COBRA coverage depending on your situation and the state in which you reside.
Healthcare.gov is another good option for Americans looking for cost-effective health insurance plans. The federal website that lets you compare rates, deductibles, and benefits across providers who participate in the state exchanges. You may also be eligible for Medicaid coverage, a government insurance plan, or government-subsidized premiums depending on your income.
Do I qualify for healthcare coverage through Medicare?
If you’re 65 or older or if you have a disability, you may qualify for a government health insurance plan called Medicare. Medicare provides different levels of coverage through Plan A, B, C, or D. Your eligibility will depend on your age, marital status, and how long you were employed. Depending on your situation, you may be able to use coverage from both Medicare and Medicaid simultaneously.
In general, Medicare plans fall into the following buckets, which are used to distinguish coverage and services between different plans.
- Part A is for inpatient medical, nursing, hospice, and hospital services
- Part B is for outpatient medical services including ambulance, mental health, preventative health visits and more
- Part C, also called Medicare Advantage, includes parts of coverage from both A and B and may also provide dental or vision coverage
- Part D provides coverage for prescription drugs
Navigating healthcare coverage can be tricky at the best of times, but Medicare is particularly confusing. Most insurance experts recommend consulting directly with Medicare representatives about your eligibility and the plan options. During the yearly open enrollment in the fall, also known as the AEP (Annual Enrollment Period), Medicare recipients can review their plans and make changes for the upcoming year.
The bottom line
As you weigh your options for healthcare coverage, consider how often you go to the doctor, any chronic conditions that require ongoing care and whether the healthcare provider you want is in-network. If you’re young and healthy, you won’t need to splurge for the Cadillac of plans, but you should have some kind of health insurance. That way, when the next accident, injury or medical conditions arises, you’ll be financially prepared to focus on getting better and not worrying about how to pay for the care.
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