Most Americans who have health insurance receive it through their employer. Because employers typically negotiate group rates and pay a portion of the premiums, this is usually the most affordable way to get coverage.
If your employer doesn’t offer health insurance, you can purchase a policy on your own. This allows you to pick a plan that provides you with the specific benefits you want. To purchase a policy, contact a health insurance agent or broker in your area or simply call a health insurance company. You might also try unions, trade associations or other organizations related to your chosen profession. These groups sometimes negotiate group health insurance rates that can make coverage more affordable.
If you can’t afford coverage, you may qualify for a state or federal safety net program. The federal Medicare program provides coverage for Americans over 65 or with certain disabilities, and the joint federal-state Medicaid program provides coverage for qualifying low-income individuals.
Buy It On Your OwnBuying individual health insurance allows you to choose a plan that fits your specific needs. Because coverage and costs vary from company to company, obtaining coverage on your own requires careful comparison shopping. When evaluating different policies, it is important to consider which medical services are covered, and the cost of deductibles, coinsurance and copayments.
Often, the decision will come down to the tradeoff between flexibility and cost. If you don’t want any restrictions on the doctors or hospitals you can go to for care, an indemnity plan or a plan that at least provides some out-of-network coverage is probably the way to go. If you’re willing to sacrifice some choice in exchange for a plan that’s less costly, you might be better off with an HMO. Maybe a Health Savings Account (HAS) tied to a high-deductible health plan is best for you.
You can determine the right policy for you by consulting with a health insurance agent or broker in your area. To locate a health insurance specialist, use LIFE’s Agent Locator.
EmployersNowadays, almost all large employers offer group health coverage, as do many smaller firms. Unions, professional associations, and other organizations may offer health insurance as well.
One of the great benefits of group health coverage is cost. Premiums are generally lower than with individual coverage because economies of scale in large groups make administration less expensive. And with group coverage, the employer usually pays a significant part of the premium.
Another plus is eligibility. Group insurance policies usually don’t require a medical exam or other evidence that you are insurable. Enrollment occurs when you take the job (although coverage may not take effect for several weeks or months), and you can change your coverage during a specified period each year, called open enrollment. Some employers offer a choice of fee-for-service and managed care plans, as well as prescription and dental coverage. Other employers may offer only one plan.
Portability, the ability to keep your coverage in force if you leave your job, is another nice feature of group insurance. Because of a federal provision called COBRA, most employers with more than 20 workers are required to give you the opportunity to continue your coverage if you leave your job. You’ll be responsible for the full premium, but because you’ll still enjoy the group rate, this may be less expensive than purchasing a policy on your own. COBRA only allows for temporary coverage (typically 18 months and sometimes longer), but it’s a great way to keep yourself and your family financially protected until you find other employment or obtain coverage elsewhere. For more information about COBRA, visit this section of the US Department of Labor Web site.
Another federal law you should know about is HIPAA, which stands for the Health Insurance Portability and Accountability Act. Before HIPAA was passed into law in 1997, people had to worry about health insurance coverage for preexisting conditions like diabetes, heart disease or cancer. If you changed jobs and had to change insurers, you might not have been able to get some of your care covered because of a preexisting condition exclusion. Today, HIPAA helps to assure continued coverage for employees and their dependents, regardless of preexisting conditions. Insurers can impose only a 12-month waiting period for any preexisting condition that has been diagnosed or treated within the preceding 6 months.
If you have had group health coverage for at least 1 year and you change jobs and health plans, your new plan can’t impose another preexisting condition exclusion period. If you have never been covered by an employer’s group plan and you start a new job that offers such a plan, you may be subject to a 12-month preexisting condition waiting period.
MedicareAmericans aged 65 or older and people with certain disabilities may qualify for Medicare, a federal health insurance program.
In many parts of the country, people eligible for Medicare can choose between the traditional Medicare fee-for-service plan and various managed-care plans. The traditional plan is often referred to as Part A (hospitalization) and Part B (physician care). As of 2006, Medicare also has an optional program, known as Part D, that covers some prescription drug costs. You can switch between the traditional plan and a managed-care plan for any reason. However, you must officially notify the plan or the local Social Security office, and it may take up to 30 days for the change to take effect.
Those enrolled in the traditional Medicare plan can purchase private insurance to help cover some of the gaps in Medicare coverage. These supplemental policies, sometimes called Medigap or Medicare Supplements (MedSupp), are required by law to cover certain expenses, such as the daily coinsurance amount for hospitalization. Some policies may offer additional benefits, such as coverage for preventive medical care, prescription drugs, or at-home recovery.
To find our more information about Medicare, call 800-MEDICARE or visit the government’s Medicare website.
MedicaidMedicaid provides health coverage for certain people with limited income who are eligible to participate in the program. Medicaid is a joint federal-state program that is operated by the states. Each state sets its own rules about eligibility and covered services.
Many groups of people are eligible for Medicaid coverage. Some of the factors affecting eligibility include age; whether you are pregnant, blind or disabled; your income and resources; and whether you are a U.S. citizen or legal immigrant. Your child may be eligible for coverage even if you are not. Eligibility for children is based on the child’s status, not the parent’s status.
If your income is limited and you can’t afford the care you need, you should apply for Medicaid whether or not you think you can qualify. A qualified caseworker in your state will evaluate your situation to see if you are eligible for Medicaid.
For more information about the Medicaid program, go to the website of the U.S. Department of Health and Human Services .
High Risk PoolsA high-risk pool is a state-operated program that offers health insurance to individuals who don’t have access to coverage through an employer or other group and have a serious medical condition that prevents them from purchasing private health insurance. It is similar to risk pools for automobile insurance to ensure coverage for people who can’t get it elsewhere. In most states, the risk pool is funded through premiums, supplemented by tax revenues or by an annual assessment on health insurance companies operating in the state.
More than 30 states have established high-risk pools that provide access to comprehensive health coverage for more than 180,000 people across the country. An estimated 1 million people who are eligible for coverage in high-risk pools don’t participate. In a few cases, states don’t have adequate funding for the pools and are unable to enroll all eligible individuals.
To find out if coverage through a high-risk pool is an option in your state, contact your State Insurance Commissioner.