Private health insurance plans
How do the various types of health insurance plans work?
Your plan determines (i) Who will deliver the services covered by your plan (ii) What services will be covered. The lowest level of coverage is the MEC (iii) How the costs will be shared between you and your insurer.
The overview below provides a high-level summary of plan types, but we strongly encourage you look at the summary of benefits and coverage (SBC) for each plan you are considering purchasing. The SBC provides plan coverage details and explains the costs of different health care services.
Insurance companies have networks of providers. Different plan types provide different levels of coverage for care you get inside and outside of the plan’s network of doctors, hospitals, pharmacies, and other medical service providers.
Below is a summary of the major plan types.
Health Maintenance Organization Plan. (HMO)
You generally must get your care and services from doctors, other health care providers, or hospitals in the plan’s network (except emergency care, out-of-area urgent care, or out of area dialysis). These plans may require a referral from a PCP (Personal Care Physician) to see a Specialist or be “open access” which means that members can self-refer themselves to specialists.
Point of Service Plan (POS)
POS is similar to the basic HMO plan described above but with the flexibility to find service provision outside the ‘Network’
Preferred Provider Organization Plan (PPO)
PPO gives you greater flexibility to choose your health care provider, doctor, or hospital. PPO Plans have network doctors, other health care providers, and hospitals. If you choose a provider who is not “in-network” you may have to pay a higher proportion of the costs.
HDHP plans are insurance plans with lower premiums and higher deductibles than traditional health plans. These plans typically have a lower premium cost, therefore putting more financial risk on the insured person.
- What services are covered?
- Durable medical equipment (canes, walkers, scooters, wheelchairs, etc.)
- Physician and nursing services
- X-rays, laboratory and diagnostic tests
- Certain vaccinations
- Blood transfusions
- Renal dialysis
- Outpatient hospital procedures
- Some ambulance transportation
- Immunosuppressive drugs after organ transplants
- Certain hormonal treatments
- Prosthetic devices and eyeglasses.
- How will the costs be shared?
You can choose.
Your monthly premium entitles you to the services as described above but you will need to pay a proportion of the cost (out of pocket expense) yourself.
Broadly speaking, it is a balance between a higher premium (monthly payment) and lower out of pocket expense or] lower premiums and higher out of pocket expenses.
In order to choose the right plan, you have to analyze your needs, the number of members in your family, budget, and benefits offered by the plan. There are basically five approaches to balancing the overall cost of healthcare, of sharing the risk.
The broadly accepted standard is to describe the “risk share” in terms of metal tiers offered by the insurance companies.
- Bronze – 60% coverage – 40% out-of-pocket costs- These plans come with the lowest monthly premium but a high exposure to out of pocket expense,
- Silver – 70% coverage – 30% out-of-pocket expense- The premiums are higher but the risk of high out of pocket expense is shared with your insurer.
- Gold – 80% coverage – 20% out-of-pocket expense- As you would expect your insurer accepts a higher proportion of the risk involved in you and your family’s healthcare but you may expect to be responsible for about one fifth of the overall cost,
- Platinum – 90% coverage – 10% out-of-pocket expense- The higher monthly premiums insure you from the risks of expensive medical treatments and care. You will
- Catastrophe – People who are above 26 years, out of their parents’ plan and under 30 years are eligible for this plan.
IT MUST BE CLEAR that the Metal tiers do not describe the quality of service provided. They indicate the ratio of cost sharing,
Where to buy individual health insurance?
ACA has set up online shopping portals called health insurance marketplaces for consumers to buy health insurance. The Healthcare.gov is the Federally Facilitated Marketplace used by almost 18 states to sell health insurance plans. Other states have their own health insurance marketplaces to do the same. Another option is to choose affordable plans from private health insurance marketplaces like TrueCoverage. Once you decide on a marketplace, you just have to type in your zip code to see all the plans offered in your area, compare benefits and prices, and enrol in a plan.
When to sign up for health insurance?
In general, you can only purchase qualifying private health insurance, whether inside or outside the marketplace, during open enrolment, usually spanning from November 1 to January 31. If you move, marry, have a child, lose your job, or experience a similar major life change, you may qualify to enrol in the marketplace outside the open enrolment period, during the special enrolment period.
How to save on health insurance?
The ACA offers subsidies and tax credits available to many low- and middle income individuals and small businesses that buy health insurance through the health insurance marketplace, be it the federal healthcare exchange, state exchanges, or private exchanges such as TrueCoverage. Eligibility for the individual subsidies and small business tax credits is determined by IRS rules. The size of your premium tax credit depends on your household income, your household size, and the cost of a benchmark plan in your area. In general, subsidies are available to households making between 100% and 400% of the federal poverty level, or up to $97,000 for a family of four. The health insurance experts at the TrueCoverage can help you navigate the rules to identify any subsidy for which you may be eligible.
Where to buy individual health insurance?
ACA has set up online shopping portals called health insurance marketplaces for consumers to buy health insurance. The Healthcare.gov is the Federally Facilitated Marketplace used by almost 18 states to sell health insurance plans. Other states have their own health insurance marketplaces to do the same. Another option is to choose affordable plans from private health insurance marketplaces like TrueCoverage. Once you decide on a marketplace, you just have to type in your zip code to see all the plans offered in your area, compare benefits and prices, and enroll in a plan.