Health Insurance

Health insurance covers individuals’ medical expenses that arise due to illness or injury. Healthinsurance typically pays for medical, surgical, prescription drug and sometimes dental expenses incurredby the insured (covered person). Health insurance can reimburse the insured for expenses or pay thecare provider directly. Employers usually offer benefit packages as a way of recruiting qualityemployees, with premiums partially covered by the employer but are also deducted from employeepaychecks. Monthly premiums are required for coverage and they are paid by the insurer. Increasingly,health insurance plans also have co-pays, which are set fees that members must pay for services such asdoctor visits and prescription drugs. Deductibles must be met before health insurance companies willcover or pay for a claim; and coinsurance, a percentage of healthcare costs that the insured must payeven after the deductible has been met (and before they reach their out-of-pocket maximum for a givenperiod). Health plans are structured in different ways. Health maintenance organizations referred to as(HMOs) and point-of-service plans (POS) require patients to choose a primary care physician whooversees the patient’s care, makes recommendations about treatment, and provides referrals formedical specialists. Preferred-provider organizations (PPOs), by contrast, do not require referrals, but dohave lower rates for using in-network practitioners and services. Group health insurance premiums canbe partially paid by the employer to help make the monthly premiums more affordable for eachmember (employee) in the group. Selecting the correct health insurance plan can be complicatedbecause of plan rules regarding in- and out-of-network services, deductibles, co-pays, and more. In2010, legislation was passed that will forever change the US healthcare system. President Barack Obamasigned the Affordable Care Act which prohibits insurance companies from denying coverage to patientswith pre-existing conditions and has allowed children to remain on their parents’ insurance plan untilthey reached the age of 26. In participating states, the act also expanded Medicaid, a governmentprogram that provides medical care for individuals with low incomes. In addition to these changes, theACA established the federal healthcare Marketplace. The Marketplace helps individuals and businessesshop for quality insurance plans at affordable rates. Low-income individuals who sign up for insurancethrough the Marketplace may qualify for subsidies to help bring down costs. Insurance available throughthe ACA Marketplace is mandated under the law to cover 10 essential health benefits. Through theHealthCare.gov website, shoppers can find the Marketplace in their state. There are two public healthinsurance plans, Medicare and the Children’s Health Insurance Program (CHIP), which target olderindividuals and children, respectively. Medicare is available to people with certain disabilities andindividuals aged 65 or older. The CHIP plan has limits to the amount of income a person makes, and itcovers babies and children up to the age of 18.

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