Your pain-free guide to health insurance
If you’re young and healthy or just trying to save a few bucks, you might be tempted to say no to health insurance. But without it, an ER visit for something as common as a kidney stone could cost nearly $40,000, according to a study by a Stanford University researcher. By learning about different plans, cost-sharing and how you can save with HSAs, you have a fighting chance of keeping your health bills in check—so a broken leg doesn’t also break the bank.
What’s health insurance good for?
Health insurers will negotiate the costs of, and generally help you pay for, any care that is covered. The best way to find out what that includes—ideally before you buy—is to ask the insurance provider for the Summary Plan Description. For even more details, you can request the Certificate of Coverage.
Read these documents carefully, especially if you know you have specific health care needs, for example, if you have a chronic condition such as allergies or are trying to get pregnant. Try to understand exactly what’s covered and how much you have to contribute for your care.
Your plan likely won’t cover everything: Often things like acupuncture and cosmetic surgery are excluded, which means you’ll pay full price. Plus, dental and vision care usually require separate plans. However, your plan may help defray the cost of wellness-related activities, such as your weekly yoga class or a gym membership, so read the fine print.
What plan do you need?
Plans may differ based on the network of doctors and hospitals they include and the specific services and prescriptions they cover. Their costs can vary too. Some plans charge higher premiums and pay more toward your care—on state and federal health insurance exchanges, these are designated platinum or gold. Others have lower premiums, and you are responsible for more of the care costs—on the exchanges, these are silver or bronze plans, or so-called catastrophic plans.
Some plans are compatible with Health Savings Accounts (HSAs), which you can fund with income that won’t be subject to federal income tax, although state income taxes may apply. You can use the money in the account for any eligible out-of-pocket health costs. Learn more about HSAs with information from Bank of America.
How much will you actually pay?
Even if you never step foot in a doctor’s office, you have to pay your health insurance premium each month to remain covered. With an employer-provided plan, your portion of the premium might be deducted from your paychecks. If you buy a plan through a state or federal exchange, you might qualify for a subsidy that reduces the amount you pay. For the remainder, or if you buy directly from an insurer, you must send in a check or pay electronically.
Once you actually go to a doctor, you’ll likely have more costs. Currently, the law requires your insurer to cover certain preventative visits and tests at no charge to you. But most other care results in a bill. What you ultimately owe depends on the amounts the health insurer negotiates with the provider, and the rules for how you and the insurer split those costs. Here are some common ways:
- Co-pays—This is a fixed dollar amount you pay for certain kinds of care. It might be $40 for each visit to a specialist or $100 if you go to an urgent care center.
- Deductible—This is the amount you have to pay before the insurer starts to pay. It can range from $0 to $7,350 per person, in 2018. The limit will rise to $7,900 per person in 2019. It might only apply to certain kinds of care, such as blood tests or a hospital stay.
- Coinsurance—This is typically expressed as the percentage of the total negotiated cost that you must pay. It may only apply to certain things.
If your plan requires 20 percent coinsurance for diagnostic imagery, such as X-rays, MRIs and CT scans, and you get an MRI for a knee injury, here’s how the bill might break down:
What’s the worst-case scenario?
The law limits your out-of-pocket maximum for covered care, although that may still be a hefty sum. In 2018, the maximum is no more than $7,350 for individuals and $14,700 for families if you stay in-network. For 2019, those numbers are $7,900 for individuals and $15,800 for families. For out-of-network care, the out-of-pocket maximum could be significantly higher and has no mandated cap.
Can you stay with your doctors?
The best way to determine whether your doctors are in-network is to call and ask them. You can also call the insurer or check its online directory. Your plan may also cover care from an out-of-network doctor or hospital. However, it may have a different payment structure, and generally you pay more than if you stay in-network.
Where should you look for health insurance?
Got an employer, a spouse or domestic partner, or (if you’re still under 26) parents with a good health plan? If so, maybe you can get covered through them. You might qualify for a state or federal program or be able to buy a policy through a state or federal exchange; you can explore those options online. You also can contact health insurance companies directly to ask about their offerings.