The ins and outs of health insurance can leave anyone feeling overwhelmed and sometimes, even foolish. How does health insurance work? For many of us, we aren’t faced with the answer to that question until we need it—and that’s usually coupled with an unexpected or challenging medical experience.
Understanding Health Insurance
Health insurance is a type of insurance that covers the medical expenses of those on the plan. Just like auto insurance or homeowners insurance, it covers unexpected costs, but health insurance can also be applied to regular—and sometimes even preventative—care.
There are two types of health insurance: private and public. Private health insurance is an arrangement between an individual and an insurance company, in which the insurance provider pays for an agreed upon portion of medical services and expenses in exchange for your monthly premium payment.
Public health insurance, like social security, Medicaid, or Medicare, is provided by the government and financed in whole or in part by tax revenue.
While most people carry some level of health insurance, there are very few people who truly understand how it works because of all the nuances involved.
The truth is, however, that health care and health insurance don’t need to be complex. When it comes to your learning how health insurance works, the first thing you need is a trusted partner—like 180 Healthcare—to rely on for support, answers, and care.
Health Insurance 101
If you’re wondering, “how does health insurance work,” then you’re in the right place!
Health insurance is a form of insurance that will cover the costs of medical services for people who are ill or injured. The health care system in America is mostly funded by private health insurance companies. Health insurance companies offer plans with different levels of coverage, so it’s important to understand how it works and what kind of coverage you need.
How does health insurance work?
Health insurance begins with elections. You choose coverage based on your needs and pay a monthly premium to your insurance company. Plans are built around deductibles, which is the amount of money you pay out of pocket before your insurance kicks in.
Health insurance deductible is the amount of money you will have to pay before your health insurance starts paying for your medical expenses. It’s also called the “co-pay” or “co-insurance.” A high deductible health plan is one that has a higher initial individual deductible, but typically a lower total annual out-of-pocket limit. This means you pay more out of your own pocket for medical costs in the first year, but you won’t be hit with huge bills at the end of the year.
A high deductible can be a good option if you don’t go to the doctor often or if you’re willing to pay more out-of-pocket for health care. But it’s not a good idea if you have chronic health conditions or expect to need surgery in the near future.
What does health insurance cover?
Health insurance covers the cost of medical services across an entire spectrum—unexpected, like a broken leg; planned, like a pregnancy; or preventative, like a wellness visit; and mostly everything in between.
Health insurance is typically confined to medically necessary procedures over cosmetic ones. These services can include hospitalization, doctor visits, prescriptions, lab tests and x-rays. Health insurance also covers physical therapy and mental health counseling as well as many other types of care.
Why do I need health insurance?
Unlike car or homeowners insurance, which are designed in the hopes you never need them, health insurance is designed to be used and to make healthcare more accessible and affordable.
While health insurance coverage is no longer mandatory for individuals in the United States, the rising costs of healthcare can make it challenging to afford any medical service out-of-pocket, even routine appointments.
Health insurance works by taking in a large sum of premiums from many patients and in turn applying that profit in order to fund medical expenses for policyholders as they need them.
How do I get coverage?
There are various types of coverage for various seasons of life and differing needs. Almost half of all Americans have health insurance through their employer, but that leaves the remaining 50% to find coverage of their own.
The Marketplace (sometimes called the Exchange) is a public space born of the Affordable Care Act (ACA) where people can elect their own plans free of an employer.
However, you cannot buy health insurance at will. You must elect for coverage during an appropriate enrollment period.
The health insurance enrollment period is a time of year when people are allowed to sign up for health insurance. It is also the time of year when people who need to renew their insurance policies can do so. The open enrollment period typically lasts from November 1st to December 15th in most states.
The exception to this rule is a life-changing event, like a birth, a marriage, or a divorce. Other qualifying events could include losing a job or getting a new one. When these events happen, it is an opportunity for the policy holder to extend or change their coverage to more appropriately fit their current lifestyle.
How 180 Healthcare Can Help
The advent of subscription-based healthcare and other health care alternatives has led to a new way of thinking about health insurance. Customers can now choose the level of coverage they need, pay for it on a monthly basis, and cancel at any time.
Our system is designed to provide more choices and freedom for you, the customer. At 180 Healthcare, we offer plans that make healthcare affordable for everyone, as well as the resources to maintain personal health.
For a lower monthly cost than many health insurance premiums, our members get access to things like unlimited doctors’ visits with no co-pay or deductible; discounted services for other specialties like dental, vision, chiropractic care, and more; and reduced pricing for prescriptions, labs, and imaging services.
So, how does health insurance work? The better question is, how does 180 Healthcare work better? Call (573) 803-4661 or contact us today to see how we can help you and your family.