Although most people in America receive group health insurance from their employer, this is not always the case. Individual health insurance is available for individuals who are self employed, who are employed by small employers or who are unemployed. Before the Affordable Care Act (ACA), sometimes called “Obamacare”, purchasing individual health insurance was a complicated and, all too often, an expensive alternative to group health insurance. Now the process of obtaining cheap health insurance is easier than ever: applicants no longer need to be concerned about preexisting condition exclusions or other medical underwriting that would have made purchasing individual health insurance very difficult.
Finding Cheap Health Insurance
There are so many online resources available to assist consumers with finding the best health insurance option for their household. Side by side quotes can be obtained online as well as research into the different coverage options and insurance companies that offer health insurance products. Some of the major carriers in the health insurance marketplace are Kaiser Permanente, Humana, Coventry, Care First: Blue Cross/ Blue Shield, Cigna, Aetna, and United Health One and there are many others. Go to www.healthcare.gov, www.usa.gov or your state insurance department website for information on health insurance coverage and options.
Factors That Impact the Premium
Every insurance company has a different rating structure which is why premiums often vary widely between insurance carriers. With the new ACA, insurance companies can no longer increase premiums or deny benefits for applicants with preexisting conditions or use many of the rating criteria that they once used to determine the premium for an applicant. But there are still factors that insurers can use to set the premiums for their policies. Below are some of the factors that will be used:
1. Age(s) of the applicant(s)
Child age band applies to applicants age 0 to 20
Adult age band applies to applicants age 21 to 63
Older adult ban applies to applicants age 64 and older.
If coverage is requested by a larger family, the policy premium will rated on the adults covered by the policy along with the three oldest children in the family.
2. Geographic Rating Area
This criteria is used to set rates based on average health care costs in a particular region. Since the cost of healthcare is significantly more expensive in certain areas than in others, the insurance companies are allowed to increase or decrease premiums based on this factor.
For example a good comprehensive major medical insurance plan for a family of four, non—tobacco users with a household income of $53,000, in Washington DC could run $307 a month. That same household in Kansas might expect to pay $250 a month for the same plan.
3. Tobacco Use
As a whole, people who use tobacco products have significantly higher health costs than those who do not. Tobacco use can and is used as a factor in the final determination of a health insurance policy. And it is not limited to cigarettes. Any tobacco use is considered a high risk behavior including cigars, pipe smoking or chewing tobacco. Though the use of tobacco products will increase health insurance premiums, applicants must be completely honest with the insurance company about the use of tobacco to prevent potential claims problems after the policy is issued. Tobacco users should anticipate higher premiums by as much as 20%.
What is Covered by Health Insurance?
Before the ACA, the benefits provided by different insurance policies were varied. Though different insurance policies still offer several different benefit levels, all insurance policies must offer at least the following 10 benefits:
No cost preventative care services
Prescription drug coverage
Lab work and diagnostics
Maternity coverage and coverage for newborns
Mental health coverage
Outpatient care services
What Health Insurance Options Are Available in the “Marketplace”?
Each state can elect to host its own marketplace or let the United States Department of Health and Human Services host it. Though the marketplace is hosted by the government, the health insurance marketplace is a group of private insurers that offer insurance in a geographic region. The purpose of establishing the marketplace was to make it easier for applicants to find the best coverage to fit their needs at an affordable price – one stop shopping. The ACA has not limited traditional purchasing options in any way. Applicants still have the option to go through a private broker or go directly to an insurance company, if they choose.
It is still possible to select a plan that offers additional coverage above the mandated coverage as well as lower deductibles and/or copayments. Each health insurance plan is evaluated according to a rating system to help applicants compare plans, apples to apples. The coverage levels are Bronze, Silver, Gold, and Platinum. Platinum plans have the best coverage but also carry the highest premiums. Bronze plans generally have the lowest premium and the lowest levels of coverage.
Working Through an Agent – the Pros and Cons
The Affordable Care Act makes buying cheap health insurance easier than ever; there are still many options to consider and a lot of terminology to understand. By working with an experienced agent, either in the marketplace or outside of it, it is even easier to complete the applications and to make fully informed choices about the benefits.
Anyone searching for help should be aware of the credentials of the agent that they select. A health insurance application includes a great deal of confidential information. Many people are concerned about potential fraud, as they should be. Licensed insurance agents have a duty to protect a customer’s confidential information and have insurance to cover damages if they fail to meet that duty. While the new health insurance “navigators” do undergo background checks and are certified by the Attorney General’s office, they are not necessarily licensed insurance agents. Know who you are working with before giving any private information.
There is one disadvantage to using an agent in the process of buying health insurance: insurance policies sold outside of the exchanges are not eligible for government subsidies to assist with the premiums and/or the out of pocket expenses. Anyone searching for health insurance should first determine if they are eligible for any of the subsidies available. Check healthcare.gov or a state exchange website for more information. If subsidies are available, the applicant must go through an official exchange in order to receive them. Many insurance brokers are certified to issue policies the state’s exchanges so this may not be an issue. Ensure that they are and that the policy being offered is though the exchange before signing the application.
When it comes to health insurance, there is no single best solution for every situation. It is to the benefit of all that there are many options from which to choose. The Affordable Care Act plays a vital role in the future of healthcare in the United States. It has never been easier for Americans to find a cheap health insurance solution that best fits their individual circumstance.
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