About 50 years ago, employers started offering health insurance as a way to attract and keep good workers. Overall, group plans were usually cheap for employers, and employees usually paid a small amount or nothing at all for their own and their families' health insurance.
Individual policies that were not part of a group cost more, but coverage was still fairly cheap. Then medical costs started to go up, people started living longer, and doctors got better at curing different diseases and saving and extending the lives of people with serious injuries and illnesses that could kill them. Prices for health care and insurance started going up much faster than annual incomes, and premiums became a burden on both employers, who paid most of them, and employees, who often had to pay more through higher deductibles, out-of-pocket costs, and higher premiums.
A recent MSNBC News Service report says that 41 percent of Americans with moderate to middle incomes did not have health insurance for at least part of 2005. In 2001, only 28% of people felt this way. Also, in 2005, more than half of Americans who didn't have health insurance found it hard to pay their medical bills. Another scary fact is that 28% of Americans did not have health insurance in 2005, which is up from 24% in 2001.
So, what should a person do if they don't have health insurance or if they can choose between a cheap discount plan that doesn't cover core expenses and an affordable plan that may cost a bit more but offers much better coverage? According to data from the U.S. Centers for Disease Control and Prevention, most people who can't afford important screening tests like mammograms, colonoscopies, or PSA tests won't get them. Also, close to 60% of people without health insurance didn't get treatment for a long-term illness or didn't buy the medicine they needed.
All of these numbers point to the same thing: people who don't have health insurance for essential services are often unable to pay for those services. This makes them more likely to get new health problems or have their existing ones get worse.
What should you look for in a health insurance plan, especially if cost is a concern? You should get the best insurance you can afford. Skimping on premiums can save you money in the short term, but it can cost you more in the long run. People don't always have health insurance because they can't afford it or because they think they don't need it because they're healthy. People who are healthy, on the other hand, get sick or hurt in serious ways all the time. You can't predict when you'll need insurance.
Some people choose "catastrophic" insurance, which usually only pays for major medical and hospital bills that are more than a certain deductible. Under this kind of plan, the person who is covered pays for regular doctor visits and prescription drugs. With this type of plan, you'll pay less each month, but your coverage will be limited and your deductible will be high. Deductibles begin at $500 per year, but they can be much higher. If you buy a cheap policy with a $10,000 deductible and need surgery that costs $8,000, you must pay that $8,000 out of pocket. If your surgery costs $12,000, you would have to pay $10,000.
One insurance company has a plan for a 21-year-old woman who doesn't smoke that costs $29 per month. Before the policy kicks in, the insured must pay a $250 deductible and $2,500 in out-of-pocket costs each year. Hospital, surgery, and x-ray costs are covered, but not things like doctor visits, prescription drugs, maternity care, or mental health care. The most you can ever get is $1 million.
If you don't plan to go to the doctor very often, it's a good deal. A plan that covers doctor visits, prescriptions, maternity costs, and other things could easily cost $400 per month. That's an increase of $371 every 30 days, which adds up to a total cost of $4,800 per year.
The best deal is on group health insurance plans, which you can usually get through your employer, union, or guild. Individual plans, especially those that cover everything, can be very expensive for a lot of people. It's important to look around when you want to buy health insurance. Your choice of what kind of plan to buy will depend on how much you can spend and what kind of insurance you need. When it comes to health insurance, there is no right or wrong choice, but you should have catastrophic insurance at the very least.
There are basically three kinds of plans: Fee-For-Service, Health Maintenance Organizations (HMO), and Preferred Provider Organizations (PPO). Fee-For-Service plans give you the most options for doctors and hospitals, but they are also the most expensive and require the most paperwork. Either an HMO or a PPO is for you if you're willing to give up some or a lot of choice, do less paperwork, and save some money on premiums.
A Health Maintenance Organization (HMO) is the least flexible, least expensive, and has the least amount of paperwork and co-payments. Some parts of Fee-For-Service and HMO are in a PPO. You'll have more options than with an HMO, but less than with a Pay-As-You-Go plan. It usually costs more than an HMO but less than a fee-for-service plan. Managed Care, which limits how much health care you can use, is a part of all three types of insurance. Fee-For-Service insurance has the fewest restrictions, while HMO insurance has the most.
Ask the following questions when looking for health insurance:
- Will you have a lot of freedom to choose doctors and hospitals?
- What is the cost of the premium?
- How much do co-pays cost?
- How much do the deductible and out-of-pocket costs add up to each year?
- What kinds of services are included?
- Does it cover dental care, and to what extent?
- What are the steps that need to be taken before a specialist visit, a procedure, or a test?
- Is mental health care covered, and if so, how much?
- What prescription drugs are covered, and to what extent?
- What is the most you can get over your whole life?
As you start to narrow down your options, you can look more closely at specific plans that seem to fit your needs and decide which gives you the best value for your money.
The United States has one of the best health care systems and one of the most complicated health insurance systems in the world. Often, they don't seem to get along and can't talk to each other or work together. That can be one of the most frustrating things about dealing with doctors, hospitals, and health insurance companies for the first time. Just because of this, it's important to choose your health benefits provider with care and thought.
