Whether you’re responsible for a household or single and in charge of only yourself, most of us have a financial plan. Each month we hold ourselves responsible to pay for rent, utilities, groceries, car expenses, credit card bills, and more. While some of these responsibilities are simple to estimate, the cost of medical care can be a little difficult.
This article explores health insurance in-depth, why one should get health insurance, what does health insurance cover and how can one buy health insurance.
Table of Contents
- 1 What is individual health insurance?
- 2 What does Health Insurance cover?
- 3 Average health insurance cost for a single male
- 4 How can I buy health insurance?
- 5 Types of marketplace health plans
- 6 Why do I need health insurance?
- 7 Health insurance cost calculator
What is individual health insurance?
While many people get their health insurance through a group plan sponsored by their employer or union, others purchase it themselves. If you are buying your own health insurance, you are purchasing an individual plan, even if you include family members on the plan.
What does Health Insurance cover?
If you already have an insurance plan and want to keep it, examine your benefits to see which services are covered. Your plan may not cover the same services that another plan covers.
Most insurance plans will cover a set of preventive services. This does not suggest they are free. You may still be required to pay deductibles, copayments, or other out-of-pocket costs.
These preventive services include shots and certain health screenings. If you purchase a plan through the Health Insurance Marketplace, your insurance will cover the preventive services. Health insurance will also cover at least 10 essential health benefits required by the Affordable Care Act (ACA). All private health insurance plans proposed in federally facilitated marketplaces will present the following 10 essential health benefits:
- Ambulatory patient services (outpatient care you get without being admitted to a hospital).
- Emergency services.
- Hospitalization (such as surgery).
- Pregnancy, maternity, and newborn care (care before and after your baby is born).
- Mental health and substance use disorder services, including behavioral health treatment (this includes counseling and psychotherapy).
- Prescription drugs.
- Rehabilitative and habilitative services and devices (services and devices to help people with injuries, disabilities, or chronic conditions gain or recover mental and physical skills).
- Laboratory services.
- Preventive and wellness services and chronic disease management.
- Pediatric services, including oral and vision care (but adult dental and vision coverage aren’t EHBs).
Average health insurance cost for a single male
The cost of individual health insurance varies. Personal choices in coverage, as well as age, income, location, number of family members (if any) included in your coverage, health care use, are the factors that influence your actual health insurance cost. You can get a reliable estimate of your costs when you understand the health plan’s premiums, deductibles, cost-sharing expenses, and maximum out-of-pocket limits. With this knowledge, you can also evaluate health insurance plans.
In return for healthcare coverage, the insurer charges you a monthly premium. The national average health insurance premium for an ACA plan is $456 for an individual and $1,152 for a family. This
average cost does not consist of people who get government subsidies.
Deductibles and cost-sharing expenses
A deductible is an amount you pay for health care services each year prior to your health insurance pays its part of the cost of covered services. The average annual deductible for single, individual coverage is $4,364 and $8,439 for family coverage. Remember that individual health insurance plans’ deductibles vary significantly.
Copayments and coinsurance are cost-sharing payments you incur each time you get a medical service after achieving your annual deductible. A copayment is a fixed amount that you pay for covered health care services. For instance, suppose your plan has a $30 copayment and your doctor’s visit is $150. If you:
- Haven’t met your deductible, you’ll pay $150 at the time of your visit
- Have met your deductible, you’ll pay your $30 copayment
Coinsurance is a percentage of covered health care service that you pay for covered services after you have reached your deductible. Assume your plan has a 20% coinsurance and your doctor’s visit is
$150. If you:
- Haven’t met your deductible, you’ll pay $150 for the visit
- Have met your deductible, you’ll pay 20% of $150 (which is $30)
Maximum out-of-pocket limits
The maximum out-of-pocket limit is a financial security net. This dollar amount is the most you have to pay for covered services in a year. After you reach this amount, the insurance company pays 100% for covered services for the remainder of the benefit year. Your deductible, copayments, and coinsurance payments count toward the annual maximum out-of-pocket limit.
For the 2020 plan year, the out-of-pocket limit for an ACA plan can’t be more than $8,150 for an individual and $16,300, as stated on Healthcare.gov. Many plans offer lower out-of-pocket limits.
How can I buy health insurance?
Health insurance companies can’t decline you for coverage or charge you soaring premiums because you’re sick or have a health condition, such as diabetes and heart disease. Before the ACA, people with health problems coped with higher premiums to cover a pre-existing condition or couldn’t be eligible for an individual health plan at all.
Moreover, you may meet the criteria for premium discounts in the form of tax credits or subsidies to reduce your out-of-pocket health insurance costs if your income is low or moderate.
The ACA provides tax credits to assist you in paying for a marketplace plan for people who are up to 400% of the federal poverty level. That’s $51,040 for a single person, $68,960 for a couple, and $86,880 for a three-person family.
Subsidies can spare you hundreds of dollars a month. The Centers for Medicare and Medicaid Services estimated a 27-year-old at 150% of the federal poverty level would pay on average $57 per month for the lowest-cost Silver plan. That’s a savings of more than $300 per month if the plan didn’t have subsidies. People with incomes below 138% of the federal poverty level may be eligible for Medicaid. That’s $17,609 for an individual and $36,156 for a family of four. The ACA permitted states to expand Medicaid for more people. Thirty-eight states have extended the program, which lets more people get Medicaid.
Choosing a health plan
When choosing a health plan, you need to evaluate your healthcare needs, review the options, plan your budget, and select the plan that makes the most suitable for your finances and your health.
To determine your needs you can ask yourself some questions:
- How frequently do you see the doctor?
- What types of healthcare will you require in the next year?
- What prescription drugs do you take?
- What hospitals and doctors do you want to see?
Here are ways to get coverage:
- Group health insurance: Your employer chooses the plan(s) and health insurance companies. You sign up for work, usually in the fall during your employer’s open enrollment period.
- Individual health insurance: This is a plan you buy on your own. An individual plan can cover just one person or a family. You can buy directly from the top health insurance companies or from your state’s health insurance marketplace, also called an exchange.
- Medicaid and the Children’s Health Insurance Program (CHIP): These federal-state plans have low-income needs.
- Medicare: Mostly for people age 65 and over.
- Catastrophic health plans: These plans are only offered to people under 30 and those who are facing serious financial problems. The plans have low premiums, but high out-of-pocket costs. They also provide all the benefits found in a standard ACA plan.
- Short-term insurance: These low-cost, low-coverage plans are available to most people (a handful of states forbid them). They’re not exactly deemed as health insurance since they usually don’t cover many services that are basic in health insurance plans. For instance, they often don’t involve mental health and maternity care.
Do your research before open enrollment
You can purchase an individual health plan that meets government requirements for coverage only during the annual open enrollment period unless you have a special situation. For instance, losing your job, getting married, or having a baby creates a special enrollment period. So, you can make modifications at that time. However, if you don’t have a special life event, open enrollment is the only time you can make changes.
Don’t wait until the last minute. Give yourself enough time to explore options and apply.
Investigate health plans on your state marketplace
The federal government’s HealthCare.gov website has connections to state health insurance marketplaces. These plans propose subsidies to lower your costs if you fulfill income requirements.
If your income makes you eligible for discounts or lower out-of-pocket costs, you can fill out the
application to see if you’re eligible for assistance and to evaluate health plans from private insurance companies in your area.
Health plans sold in the marketplaces are classified according to how much of the health care costs the insurer pays and how much the consumer pays. Generally the higher the
out-of-pocket costs — the more you pay in deductibles, coinsurance, and copayments — the lower the premium.
Types of marketplace health plans
Bronze plans have the lowest premiums, but the highest out-of-pocket costs when you use health care services. Platinum has the highest premiums, but the lowest out-of-pocket costs.
Remember that these are general categories. The anticipated out-of-pocket costs are averages. Plans in the same metal category might reach the cost split in different ways. Two Bronze
plans, for instance, might have different deductibles and co-insurance levels. Yet, their overall out-of-pocket costs are about the same. Plans in the same metal level might also be designed differently. One Bronze plan might be a health maintenance organization, and another might be a preferred provider organization. Based on the type of plan, you might have free access to any
provider in your network or you might need to get a recommendation from a primary care physician.
Almost half of the individual health plans are health maintenance organization (HMO) plans. Exclusive provider organization (EPO) plans make up one-third of individual plans. PPOs,
which are the most common type of plan in the employer-sponsored market, only make up a small portion of individual plans, according to eHealth. You can purchase marketplace plans over the phone, through paper applications, or online. Some states also conduct enrollment fairs.
In addition, short-term health plans, also called catastrophic health plans, are available for most
Americans. Some states don’t allow these plans, which have low premiums and low coverage. Short-term plans don’t have to cover basics found in regular health plans, such as maternity, prescription drug, and mental health coverage.
Why do I need health insurance?
Some of the main reasons for getting health insurance are:
One of the most critical health insurance advantages is insurance coverage. The policies have a fixed sum insured which the insurer will pay in case if you require medical care. With the changing lifestyle and rising number of people experiencing critical illnesses, health policies are a useful way to get the best medical care without fretting about the expense.
The insurance industry is swiftly growing and coming up with products that meet the custom needs of the consumers. As a result, it is now likely to find health insurance policies that are in accordance with your health and insurance needs.
No matter if you are in your 20s or 50s, healthy or suffering from a medical condition, single or married, there are now plans open for everyone.
If you are looking for an effective way to lower your income tax burden, health insurance tax benefits can help you in this effort as well.
A host of Riders to Choose From
Many of the insurance providers now also offer different types of riders such as critical illness coverage, accident cover, maternity cover, and more. While these riders do somewhat increase the policy premium, they considerably enhance the scope of your policy and offer extra benefits.
There are also several additional health insurance benefits. For instance, many of the plans come with features like cashless claims, ambulance coverage, pre/post-hospitalization coverage, NCB (No Claim Bonus), and more. Pooled with the reasons listed above, these additional benefits further increase the significance of health insurance.
Your health is your only true wealth, and health insurance is one of the best ways to keep it safe. Look for a well-known insurance provider and review your requirements to select a plan that is highly affordable and offers maximum features and benefits.
Health insurance cost calculator
When choosing between health plans you need to compare the costs to find the most cost-effective plan.
The health plan comparison calculators let you insert your estimated healthcare costs for two different plans, hence, will help you pick the plan that is most reasonable for you and works better with your expected health usage.
To use this calculator, you’ll enter the plan expenses, medical service copays, and coinsurance of two different plans. You should have your plan details available for both plans, and you’ll need to know the:
- Monthly premium
- Annual deductible
- Out-of-pocket maximum