It is no surprise that healthcare in the US is very expensive. According to the Health Affairs Journal, Americans pay over $3.4 trillion a year for medical care. 

A single visit to the doctor’s office can cost you several hundred dollars. A three-day stay at the hospital can cost you thousands of dollars easily. 

The majority amongst us cannot afford to pay such hospital bills. Healthcare is a fundamental human right. Health insurance helps reduce these costs and makes healthcare more affordable for everyone. 

In 2018, 91.5% of the people living in the United States had some form of health insurance.

. How does health insurance work?

Health insurance is purchased. You, as a consumer, are initially required to pay an upfront premium to a health insurance company. This payment enables you to share “risk” with other enrollees making similar payments. 

Getting health insurance is a precautionary measure. People are healthy most of the time. They just need the reassurance that their finances will be sorted if something unfortunate happens.

The initial premium amount paid to the insurance company can be used to cover the expenses of the limited number of enrollees who are sick or injured. 

Insurance companies have a goal, and that is to gather enough premiums to cover the medical cost of enrollees based on the risk factor. For this reason, insurance companies like US Health Group, devise multiple insurance plans, each with a different set of rules, regulations, clauses, and costs, depending on the care being provided. 

Before we get started, here are the four things you must know about health insurance in the US. 

  1. There is no such thing as universal healthcare. The American government does not provide its citizens with health benefits. You have to pay for medical care under all circumstances. 
  2. Healthcare in the US is very costly. A broken leg could cost you approximately $8000. A three-day stay could cost you up to $30000.
  3. The purpose of health insurance is to protect you from owing a lot of money to healthcare facilities in case you get sick or hurt. Most people are insured. In 2018, approximately 296 million people in the US had some sort of health insurance coverage. To get yourself insured, you must make regular payments called premiums to the insurance company. In exchange, the company pays either all or a part of your medical bills.
  4. Most of your care will be provided by your “primary care provider” (PCP). After you have bought your plan, you can choose your PCP, which is a part of your company’s network. Your PCP could be a physician or a nurse who you will visit for physical tests, lab tests, a general checkup, or if you need care for a condition like diabetes, hypertension, etc.

So, how do you choose a health coverage company in the United States? Here are three questions you need to ask when selecting your health insurance plan. 

1. Where can you receive care?

Health insurance companies work in close coordination with providers. These include hospitals, doctors, pharmacies, etc. Insurance companies collaborate with providers to control costs by increasing their accessibility to the patients. 

Some companies have exclusive contracts with an identified network of healthcare providers with whom they have agreed to work with at more favorable rates. 

Often we wish to consult someone specific regarding a health issue. However, if that particular provider is not listed in your health insurance plan, then your insurance company might not pay for the provider’s services or pay a much smaller amount than it would have if the provider were one of the company’s listed providers. Therefore, if you step outside the network, know that you will be paying a much higher share of the cost. 

2. What does the plan cover?

This is perhaps the most crucial question you need to consider. The insurance plan’s coverage components are critical factors that help you decide the matter.  

The Affordable Care Act introduced more standardized insurance benefits in the United States. Before this step was taken, insurance plans varied drastically from one another. Under this reform, some acts were listed as “essential health benefits.” These include

  • Emergency services
  • Hospitalization
  • Lab tests
  • Maternity and newborn care
  • Mental health and substance abuse treatment
  • Outpatient care (services you receive outside a hospital)
  • Pediatric services
  • Prescription drugs
  • Preventive services (e.g., immunizations) and chronic disease management
  • Rehabilitation services

. How much does the plan cost?

Insurance costs can be quite challenging to comprehend

According to the Milliman Medical Index, in 2018, the most prevalent healthcare plan for a family of four costs an average of $28,166.

We have already discussed the initial premium charge you pay to enroll in a plan. This cost is transparent, i.e., you know exactly how much you are paying here.

If you think that this is the only cost you have to pay for the care you receive, think again. 

Unfortunately, there are additional charges you have to pay when you access healthcare. These additional charges are what you pay out of your pocket when you receive care. They typically present in the form of coinsurance, deductibles, copays, etc.

The general rule of thumb here is the more money you pay in premium upfront, the less money you will pay to access care. The less money you pay in premium, the more money you will pay when you access care.

Should you pay a larger share now or a larger share later?

When it comes to healthcare costs, you pay for the care you receive. There are no waivers or discounts. Whether you pay it now or later, it does not matter. We suggest paying a larger sum initially in premium to reduce charges at the time of service. 

The reason why we recommend you invest a greater amount initially is to ensure that no barrier comes between you and healthcare. Often people refuse to seek care when they find out about higher copay costs. Nothing should come between you and your wellbeing. 

. Parting Thoughts

Choosing the right health insurance plan for you and your family depends on your lifestyle. This includes your doctor’s preference, health condition, finances, and more.  

Do not make the mistake of choosing the cheapest plan in front of you. Carefully assess everything and then reach a decision. Your health is a serious matter. Be wise with your choices. 

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