Private Health Insurance Overview
With a few exceptions for the disabled and elderly, most Americans will purchase medical insurance through a private company. This insurance will help cover the cost of any medical bills should someone need to seek medical care.
There are a variety of ways Americans can go about purchasing health insurance. Most sign up for the plan offered by their employer, as it can oftentimes end up being the most comprehensive, most affordable option. U.S. employers pay a portion of each employee’s insurance premium, and the employee can pay for the rest on a pre-tax basis.
However, if your employer does not offer any sort of health insurance plan, you do have other options. The most popular way to find and purchase an insurance plan is by visiting a state or federally-run health insurance exchange website. The state you live in will dictate which site you will use, but generally these sites will show you a variety of health insurance plans from an array of insurance companies. Subsidies are also available to people who meet certain income requirements.
When comparing health insurance plans, the most important factors to consider are:
- The types of health services offered (basic care only or specialty care included).
- The doctors and hospitals in the plan’s network (will they pay for you to see the doctor you’re currently seeing?).
- Whether or not prescriptions are covered.
- How much the monthly premiums are (are you eligible for any income subsidies?).
- The deductible you have to meet before the insurance company starts covering costs.
- The co-payment you are responsible for during each doctor visit.
Basic plans will cost less, but they also won’t cover much in the event of an emergency or serious health complications. Additionally, they may have a higher deductible, which means your out-of-pocket costs for care will be much higher.
It would be in your best interest to find a plan that includes your preferred doctors and treatment facilities in its network. If they aren’t included, you will want to find new doctors who are. This might not be a big deal if you aren’t attached to your current doctor, but it’s something to take into consideration if you are. Otherwise you’ll be paying much more to keep seeing that out-of-network doctor.
Health insurance premiums will vary due to a variety of factors, including age, gender, income, lifestyle habits, health status and the comprehensiveness of the plan you select. If you are young and fairly healthy, your premiums will be much lower than someone who is aging with health complications. This is because the insurance company will more than likely pay much less for your medical bills than for someone who is consistently receiving treatment.
Private health insurance may seem overwhelming at first, but with a little research and comparison shopping, you’re sure to find something that meets your health care needs. We hope this overview gave you a better understanding of America’s private health insurance system—regardless of whether you purchase a plan through your employer or on the exchange markets.