1. You really do need it
Health insurance is required by law in only a few states, including California, Massachusetts, Washington D.C., Vermont, New Jersey and Rhode Island. But even if it’s not required where you live, it’s still a good idea to buy it. Health insurance will give you financial protection in case you or a family member experience a serious accident or illness. Even more important, having health insurance is associated with a longer life. This association became very evident during the COVID-19 pandemic.
According to a March 2021 study by Families USA which focused on COVID-19 cases and deaths:
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- Nationally, roughly 1 out of every 3 COVID-19 deaths are linked to health insurance gaps.
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- More than 40% of all COVID-19 infections are associated with health insurance gaps.
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- During the period covered by the study on which we base our analysis — between the start of the pandemic and August 31, 2020 — health insurance gaps were linked to an estimated 2.6 million COVID-19 cases and 58,000 COVID-19 deaths.
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- If the same relationships between health insurance and COVID-19 continued unchanged after the period covered by the study, then by February 1, 2021, health insurance gaps would be associated with an estimated total of 10.9 million COVID-19 infections and 143,000 deaths from COVID-19.
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2. It’s complicated
Unfortunately, no matter where you get your health insurance it’s complicated!
Corporate Health Insurance
Corporate health insurance policies, like the kind you get from work or through your state’s marketplace plans under the Affordable Care Act, are legal contracts. In consideration of the premiums that you pay, you contract with an insurer to pay your medical bills, subject to the policy terms and conditions. It’s a “take it or leave it” deal, known as an “adhesion contract.” That means you have no power to negotiate it. Health insurers write the insurance policies with their self-interest in mind.
Public Health Insurance
Public health insurance programs, like Medicaid, Medicare, Children’s Health Insurance Program, brings its own set of complexities. Public health insurance programs are available to people who qualify for them based on age, income, documentation status, etc. But a change – such as a change in income or marital status, a move to a new county or state, or a job change – can mean they no longer qualify for the program.
Health Insurance Can Be Hard
According to a 2020 study by Bend Financial, around 56% of Americans said they felt ‘completely lost when it comes to understanding health insurance’.”
Easiest to understand is how much the premiums are, but focusing on premiums alone means that consumers often overlook other key considerations when choosing their plans!
3. Think about ‘Choice’
Does the policy give you the choice of seeing your own doctor?
Double-check and ask your doctor’s office.
Is the plan an HMO, EPO, POS or PPO?
Generally HMO plans limit your choices the most, and PPO plans the least.
HMO means “Health Maintenance Organization”
EPO means “Exclusive Provider Organization”
POS means “Point of Service” Plan
PPO means “Preferred Provider Organization”
Does the policy give you a choice of hospitals in your area?
How about the closest hospital? Or even the only hospital in your area?
What if you consult an out-of-network doctor? How much will you have to pay?
4. Think about ‘Coverage’
Does the policy provide the Minimum Essential Coverage to be ACA-compliant?
Even though the federal penalty for not having minimum essential coverage was eliminated as of January 1, 2019, the individual mandate still exists and having minimum essential coverage is still required.
How will the policy will respond if you need to see a special doctor or take special medications?
Nearly half of all Americans have a chronic condition like cancer, diabetes, asthma or heart disease. If you’re one of them, how will the policy respond if you need surgery, chemotherapy or special medications?
TIP: Get the Summary of Benefits and Coverage for the plans you are comparing.
Here’s a sample complete summary from the U.S. Department of Labor.
Here’s a blank summary that you can use to compare plans
Check out our Private Health Insurance Cost Estimator when comparing health insurance policies.
HELP: Here’s a helpful glossary of the most common health insurance terms.
5. Think about ‘Cost’
After you’ve determined your needs for “choice” and “coverage,” look at the cost. What are the monthly premiums?
Will Covered California, or your employer, pay part of the premiums?
What about the non-premium costs (which are not subsidized), like:
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- your annual deductible?
Depending on your deductible, you may be eligible for a Health Savings Account (HSA).
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- your co-pays for doctor visits, labs, emergency care and hospitalization?
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- your share of the cost of your medications?
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- the plan’s maximum out-of-pocket costs?
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- how much you have to pay to go outside your provider network?
6. Remember, you’ve got to protect yourself
Limited Consumer Protections for Health Insurance
You’d think our legislators and state regulators would get all “consumer protection” on health insurance but, surprisingly, in California we have way more protections with auto insurance than with health insurance.
For example, with auto insurance you get to pick whichever repair shop you want. Your insurer can’t make you go to their mechanic!
Plus unlike health insurance, auto insurance rates are highly regulated, saving Californians billions of dollars in premiums!
Click here to learn why auto insurance works so much better than health insurance!
Bottom line.
When it comes to your health insurance,
don’t just pick the policy with the lowest premiums.
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