Despite rises in the average U.S. salary, an American employee’s net pay remains relatively low due to steeply inclining medical care costs. Unlike countries equipped with socialized healthcare systems, the United States contends with a rather complex healthcare system with different forms of funding, exhausting rules and regulations, an assortment of insurance providers, out-of-pocket options, and restricting enrollment dates.
Americans spend nearly four times the amount paid by the residents of other industrialized countries on pharmaceutical drugs. Due to these complex systems and unregulated pricing, providers can adjust their prices according to market trends. In response, consumers have to adopt new strategies for finding affordable healthcare options while meeting monthly expenses.
Purchase an individual health insurance
Suppose your company doesn’t offer health insurance, or you’re self-employed. In that case, you can visit the marketplace, formed through the Affordable Care Act, popularly known as Obamacare, to find the ideal medical coverage plan. Click here for more details about affordable medical insurance. Note that you can only purchase a plan within the allotted enrolment window.
You can apply for medical insurance once the enrollment period elapses if you suffer a qualifying life event (QLE). Examples of these qualifying life events include losing Medicaid or Medicare, going through a divorce, getting married, or having a baby. You can also benefit from a QLE-related grace period in the following circumstances: if your provider terminates your COBRA coverage, if you lose your job, if you resign from your current place of employment, or if you become a U.S. citizen. You’ll receive between 30 and 60 days to purchase a health plan after a qualifying event occurs.
How much should you spend on health insurance?
Health insurance will help you meet your and your family’s medical needs for a cost. So, you’ll need to decide how much you’re willing to spend. You may qualify for federal subsidies such as the premium tax credit to assist you with your monthly health insurance premiums if you don’t have dependents in your care and earn below $49,960 annually. The subsidies’ limit depends on the federal poverty rules and differs based on household size and state of residence.
People who don’t qualify for subsidies should strive to spend less than 5% of their yearly income on health coverage premiums, which is below the government’s 9.78% premium cap or affordability threshold. Lowering the money spent on your monthly premiums allows you to budget your income accordingly, ensuring that you attend to other health-related needs.
Your private healthcare insurance may not offer comprehensive coverage. Therefore, you’ll likely be responsible for meeting other expenses and supplementing your existing insurance plan. Understanding the type and terms of your insurance plan and familiarizing yourself with possible out-of-pocket costs is essential. In most cases, a beneficiary will need to purchase an additional policy to supplement their primary one so that they will receive the necessary vision and dental services.
You may incur the following costs as part of a standard health insurance plan: copays, deductibles, and coinsurance. Deductibles refer to the money spent out-of-pocket for medical services before your insurance kicks in. Individuals may incur between $500 and $1500, while family can collect $1000-$3000 in expenses. A healthcare plan with a high deductible will usually include a low premium.
Copays are a cost-sharing strategy utilized by insurance providers. This term refers to a flat fee that you will incur for a specific medical service such as a clinic visit. The copay amount will vary based on the particular service and policy type. Generally speaking, these copays are usually $30 and below.
Coinsurance refers to the percentage of the money you pay for a medical procedure. Insurance policies can set their coinsurance rate at 20%, which means the insured pays 20% of the total cost while the insurer covers 80%.
Pick a tier
Medical insurance under the Affordable Care Act covers individuals who fall under four categories: Platinum, Gold, Silver, and Bronze. All the tiers provide essential, life-saving medical benefits but differ in cost-sharing policies between the insurance provider and the insured. You will qualify for the silver tire in many states if your healthcare premiums make up 5% of your total income.
A silver plan will typically require your insurer to pay 70% of your total medical expenses. The silver tier features a higher deductible than the bronze, which translates to lower premiums. Platinum and Gold plans are ideal for patients with health issues that rack up thousands of dollars in costs. If a family can’t withstand the impact of these medical expenses, the insured may have to declare bankruptcy.
Employer-sponsored medical insurance
The law mandates that large companies offer group health insurance plans for their full-time employees. If you’re employed by a corporation that’s legally bound to these insurance mandates, advocate for your family, and demand coverage.
Under these group health insurance plans, your employer will cover part of your medical expenses, thus lowering your premium. For convenience, you can opt for automatic deductions from your paycheck and even include your dependents on your plan for a slightly higher cost.
Employer-sponsored insurance options are significantly cheaper than shopping for a private insurance plan. Standard company-sponsored healthcare policies may include various programs like preferred provider organizations (PPOs) or health maintenance organizations (HMOs). Other insurance plans can offer additional provisions such as life insurance, short or long-term disability, and dental indemnity. Some employers provide comprehensive coverage to cater to their employees’ health needs, whether they suffer from chronic conditions or life-altering disabilities.
Every state runs a Medicaid program to provide affordable or free health insurance for specific low-income households, elderly folks, individuals living with disabilities, and pregnant women. You can qualify for the program depending on your family size and income. Different states have specific guidelines in place for their Medicaid beneficiaries. For instance, individual states provide coverage for low-income-earning adults that fall below a particular income bracket.
State and federal governments fund the program, but individual states are responsible for managing these programs. The state will designate the costs, eligibility requirements, and coverage types available. Most people who’re living under the federal poverty line qualify for Medicaid. However, some state’s limits are set above the national poverty line to cover more low-income individuals.
Medicaid covers both mandatory and optional medical services, depending on the state. The compulsory benefits are family planning, midwife access, transport, x-ray and laboratory services, outpatient and inpatient care, and complete preventative, treatment, and diagnostic care for patients under 21. Additionally, you can receive nurse and pediatric services, programs that help pregnant women wean off tobacco, and home/ in-office health services.
Your children can still qualify for the Children’s Health Insurance Program, even if your income deems you ineligible. Furthermore, pregnancy, disability, household size, and your household role (breadwinner, single parent, etc.) can also help you receive Medicaid benefits. People living with disabilities who collect Supplemental Security Income (SSI) can receive Medicaid without filling any forms in many states.
It’s essential to understand the difference between Medicare and Medicaid. While both are government-sponsored programs, Medicaid caters to low-income households specifically, while Medicare is designed primarily for individuals 65 and older. Unlike Medicaid, income doesn’t determine a patient’s eligibility.
When choosing your health care insurance company, consider the provider used by your primary care physician. To do your due diligence, you should also scan reviews, identify which plans include dental, and verify that your health insurance plan covers the expensive prescription medicine you depend on to maintain a healthy lifestyle. Additionally, consider a provider’s dedication to health plan member satisfaction before committing to a health insurance provider.