WHEN TO INVEST IN MAJOR MEDICAL INSURANCE
What is Major Medical Insurance?
Those who don’t have health insurance through their employer, Medicare (age 65 and over), Medicaid or Children’s Health Insurance Program (low-income requirements) usually purchase health plans for themselves and their family members otherwise known as individual major medical insurance.
In 2014, the Affordable Care Act (ACA), also known as Obamacare, expanded health coverage to millions of previously uninsured Americans by expanding Medicaid and the establishing Health Insurance Marketplaces. Basically, anyone who is not covered under Medicare, Medicaid, the Children’s Health Insurance Plan (CHIP), and employer’s Health plan or other health coverage, need to obtain health insurance or else may face penalties and fees.
Health care has become more accessible to the American population under the new ACA regulations. Previously, those with health issues paid high premiums to ensure that pre-existing conditions were covered or couldn’t they wouldn’t even qualify for a health plan. Under this new plan, people cannot be denied coverage or rated based on health history, gender, or pre-existing medical conditions.
Customers pay monthly premiums for access to full health care services as well as pay a specified deductible amount towards medical expenses before the benefits start. Also, consumers share the costs of health care with the health plan in the way of coinsurance and/or copayments. However, benefits you receive over a lifetime cannot be limited. Another benefit is that there is an out-of-pocket maximum you pay.
Major medical insurance plans for individuals need to provide minimum vital coverage requirements required under the Affordable Care Act. Every health plan must cover the following 10 essential benefit standards, as well as benefits for a broad range of inpatient and outpatient health-care services:
Ambulatory patient services (outpatient care at a hospital)
Hospitalization (surgery, overnight stays)
Preventive and wellness services and chronic disease management
Pediatric services, including oral and vision care (adult dental and vision coverage not included)
Habilitative and rehabilitative devices and services (designed to help people with injuries, disabilities, or chronic conditions gain or recover mental and physical skills)
Pregnancy, maternity, and newborn care (both before and after birth)as well as birth control coverage and breastfeeding coverage
Mental health and substance use disorder services, including behavioral health treatment (this includes counseling and psychotherapy)
Keep in mind that certain major medical insurance plans may also offer additional benefits such as dental coverage, vision coverage, and medical management programs (i.e. weight management, back pain, and diabetes).
Similar to employer-based health plans, individual major medical coverage is comprehensive and long-term with policies 12 months. Renewal is automatic unless an individual selects a new health plan during the renewal period.
Time to Review your Health Insurance Coverage
Health Insurance is an important topic for people no matter what age. Although you maybe already covered, you should consider reviewing your coverage each year. Indeed, there a few important reasons why you should consider doing a formal review of your healthcare coverage.
Essential Benefit Standards Must Be Covered By Every Health Plan
Under the ACA, people cannot be denied coverage or rated based on health history, gender, or pre-existing medical conditions.
Your preferred doctors may not be in your plan’s network any longer.
Your eligibility for ACA tax credits might have changed.
Your monthly health coverage premiums may have increased or plan has been canceled.
Planning any major surgery in the upcoming year and expecting increased some out of pocket medical costs.
Keep in mind that it’s important to assess your health care options under both state and federal governments. States often have options in their own markets for major medical insurance and the federal government have options for those who have been denied by a conventional medical insurance company.
HealthCare.gov is a site which is governed under the ACA that allow Americans to compare prices on health insurance plans in their states, to begin enrollment in a chosen plan, and to simultaneously find out if you qualify for government healthcare subsidies. If you qualify for premium discounts, as well as out-of-pocket costs, you need to purchase the health plan through the marketplace. Complete an application on the HealthCare.gov website to find out whether you qualify for financial assistance and you’ll see exactly what each plan offers.
Not all major medical health insurance plans can be purchased with a premium tax credit (if you are eligible), but by enrolling in a major medical health insurance plan you are protected from tax penalties for being uninsured under ACA.
Open Enrollment Comes Around in November Each Year
There is a specific period of time each year when you can make changes to your health care coverage. It is called the Open Enrollment period. It is the one time of year everyone should review their health coverage. It’s during open enrollment that anyone can apply for a new health plan through the health marketplace. If you buy your own health insurance, it’s crucial that you pay attention to open enrollment because health insurance prices usually change every year.
Typically, each year open enrollment begins around November 1st and runs through to a deadline in December or January. Ideally, the best time to get thinking about your health care coverage and deciding on any changes you might need at the beginning of November. With the upcoming holidays in November and December it’s easy to forget and lose track of time so make sure you start early.
By taking some time to review your options during open enrollment, you can potentially save hundreds or even thousands of dollars per year!
After the deadline for Open Enrollment, the Special Enrollment period begins, which is restrictive. Special Enrollment health plan purchases are available only if you have experienced certain life changes, within 60 days of the change.
Some of the more common life changes include:
- Move to a different county or zip code
- Loss of health coverage (due to job loss, divorce, death, or another valid reason)
- Birth or adoption of child
Things to Consider When Assessing Your Health Care Needs
When reviewing your health care coverage, it’s important to keep a few practical things in mind such as:
Do you take any prescription drugs?
Are there any particular hospitals or doctors you wish to see?
When looking at the healthcare coverage plans check if they will cover the prescription drugs you take. Also, verify if the doctors and hospitals you prefer are in the plan’s approved healthcare network. If not, you’ll pay out of pocket for those services.
As a general rule, the health plans are in set up in Metal Categories. Here is the way they are set up from least expensive premiums to most expensive:
Around of 60% of your health care costs are paid for by the insurer; the remaining 40% is paid for by you.
Around 70% is paid for by the insurer; the remaining 30% is paid for by you.
Around 80% is paid for by the insurer; the remaining 20% is paid for by you.
Around 90% is paid for by the insurer; the remaining 10% is paid for by you.
You need to confirm and compare how the various health insurance plans compare even if they are in the same category (i.e. copayment amounts, deductible amounts, healthcare providers, etc.)
While reviewing your health coverage needs, it’s not a bad idea to also to consider more comprehensive insurance protection to fill the coverage gaps, such as critical illness, vision care, and dental plans. Some companies offer bundled gap plans which can provide supplemental benefits like insurance for accident disability and medical expenses, which pays a lump-sum benefit. These supplemental insurance plans provide comprehensive benefit solutions.
It’s important to remember that supplemental insurance isn’t available through the ACA’s health insurance marketplace exchanges. Premium cost-sharing subsidies and tax credits and don’t apply to them. There are many options to fit the varying budgets and can be obtained directly from a licensed agent or insurance carrier.
Things to Keep in Mind When You Invest in Major Medical Insurance
Don’t wait until the last minute, start researching early so you can research options and apply.You could face a tax penalty if you go without coverage and miss open enrollment in late fall.
Assess your health care needs: the prescription drugs you take, the doctors/hospitals you prefer to visit, any special health requirements, etc.
Review the options. Check out Healthcare.gov. If you qualify for premium discounts you need to purchase the health plan through the marketplace. See what options are recommended. Call various conventional insurance companies to see what they are offering.
What plan can you afford? Based on your health needs, what makes better sense financially? Do you qualify for extra savings on other costs, including deductibles, copayments, and coinsurance, etc?
Choose a health plan. When considering your finances and your health what are the best-recommended plans? Keep in mind you can buy major medical insurance marketplace plans over the phone, through paper applications or online. Some states also hold enrollment fairs which can be helpful. Get the details for each of these to make your final decision.