Individual Major Medical Health Insurance
Health insurance coverage may be offered either through an individual policy or a group policy with an employer group plan or other group affiliation. The primary insured person is the policyholder of an Individual plan and makes all decisions regarding the coverage chosen and changes made. However, under a group policy, the policyholder may be an employer, association or trustee while the insureds are the members of that employer or organization. Under group policies, the employer/association has the right to continue, terminate or request changes to the group plan without input or authorization from the individual employees or plan participants.
Through 2018, if you do not purchase insurance or do not have insurance for three months or more in a year, you may have to pay a penalty to the federal government when you file your next tax return. This penalty was eliminated as of 2019.
The cost of health insurance (premium) can change from year to year as well as the plans that are offered by each company. Even if the intent is to continue the same plan from year to year; open enrollment is a good time to review the plan along with any changes to personal circumstances to verify that the chosen plan continues to be the best choice for the upcoming year. All health insurance plans provide guaranteed renewal of coverage, which means that you can stay in the plan as long as the insurance company continues to offer it. You can only purchase a major medical/comprehensive health plan outside of open enrollment if you experience certain life status changes such as, losing coverage from an employer, moving, getting married, or having a baby. This event is called a Special Enrollment Period (SEP). If you do not experience a life status change, you must wait for the next open enrollment.
Metal levels are a way to make "apples-to-apples" plan comparisons on Individual insurance coverage. The levels refer to the percentage a health plan will pay, on average, for care across a standard population. For instance, a Bronze plan pays 60% of covered health care costs, on average, and enrollees pay the remaining 40% through cost-sharing (deductibles, copayments, coinsurance, and out-of-pocket limits). Silver 70% /30%, Gold 80%/20% and Platinum 90%/10%. Plans that pay higher percentages towards claims will generally have higher premiums.
A Gold or Platinum plan with a higher premium and lower out of pocket expenses may save money in the long-run for an insured that has serious medical conditions and anticipates a lot of health care services during the year. If an insured is relatively healthy and does not anticipate a lot of health care services, a Bronze or Silver plan might be a good choice. If possible, it is a good idea to set aside funds to cover the cost-sharing when medical care is needed.
There are two major types: PPOs (Preferred Provider Organizations) and HMOs (Health Maintenance Organizations).
PPO Benefit Plans allows insureds to select from a network of contracted physicians, hospitals and other health care providers, or use an out-of-network provider and be required to pay a higher share of the cost. PPO plan members may generally see specialists without any prior referral or authorization.
HMO Benefit Plans require insureds to seek health care treatment only at designated hospitals, physicians, HMO facilities and other in-network providers, except in the case of emergency. Some HMO plans also require Preferred Care Provider (PCP) referrals for prior authorization to see a specialist.
High Deductible Health Plan (HDHP) is a plan with a higher deductible than a traditional insurance plan. The monthly premium is usually lower, but you pay more out of pocket health care costs yourself before the insurance company starts to pay its share. A (HDHP) can be combined with a Health Savings Account (HSA), allowing you to pay for certain medical expenses with money pre-tax funds that have been set aside. An HSA a type of savings account that lets you set aside money on a pre-tax basis to pay for qualified medical expenses. By using untaxed dollars in an HSA to pay for deductibles, copayments, coinsurance, and some other expenses, you can lower your overall health care costs.