When to Invest in Major Medical Insurance8 minute read

8 minute read

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Updated for December, 2018

insurance

In 2014, the Affordable Care Act expanded health coverage to millions of previously uninsured Americans by expanding Medicaid and the establishing Health Insurance Marketplaces.

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 co-insurance 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 ten 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)
  • Emergency services
  • Hospitalization (surgery, overnight stays)
  • Laboratory services
  • Preventive and wellness services and chronic disease management
  • Pediatric services, including oral and vision care (adult dental and vision coverage not included)
  • Prescription drugs
  • 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.

As a general rule, the health plans are in set up in Metal Categories.

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:

Bronze:

Around of 60% of your health care costs are paid for by the insurer; the remaining 40% is paid for by you.

Silver:

Around 70% is paid for by the insurer; the remaining 30% is paid for by you.

Gold:

Around 80% is paid for by the insurer; the remaining 20% is paid for by you.

Platinum:

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.

Some states also hold enrollment fairs which can be helpful.

  • 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.