Your responsibility for your health goes far beyond eating healthy and exercising. No matter how old you are, if you want to buy a health insurance package and don’t know where to begin, we’ve got the ultimate guide covering all you need to know about cheap health insurance.
Investing in personal healthcare insurance can be a pain, but it can also save you from major financial strains. Whatever your health care needs may be, you should compare and contrast your options in choosing a health insurance plan.
Below, we’ll cover a few key questions and topics to help you get access to essential health benefits.
Your Options for Health Insurance Coverage
Under the Affordable Care Act (ACA), plans are categorized into four levels: bronze, silver, gold and platinum. They cover 60%, 70%, 80%, and up to 90% of your health-care bills, respectively, with higher monthly premiums attached to the greater percentages.
Catastrophic plans, however, cover less than 60% of costs and they have the cheapest monthly premiums of all, but they are accessible only if you’re under 30 years of age or can qualify for a hardship exemption that waives the fee for going without insurance.
- Gold plans for higher expected medical costs. Gold plans are considered best for those who expect huge medical expenses such as routine checkups and prescriptions for pre-existing conditions, or for people who need therapy for mental health problems. Although higher coverage Gold plans have higher monthly premiums, they offer lower out-of-pocket expenses, which means that you will have to pay less every time you visit a health care provider. While choosing insurance plans, make sure to consider the highest routine cost and know which policy offers more leeway with expenses. Gold insurance plans will go easy on your pockets and can take on some of the burden during times of health distress.
- Silver plans for average medical costs (or low-income earners). If you belong to a low-income household, then a Silver health insurance plan may help you the most with health issues. It may be the cheapest option available, as these policies take on extra cost burdens (especially if you can’t afford a Gold plan) and are eligible for additional cost-sharing reduction (CSR) subsidies. Although Silver plans are cheaper than the Gold plans, they still provide better benefits than Bronze and Catastrophic plans and require lower out-of-pocket expenses.
- Bronze and Catastrophic plans for low expected medical costs. For healthy individuals, Bronze and Catastrophic plans are cheap health insurance plans that offer decent coverage. But if you end up having more medical expenses than planned, you might need to pay more than what is covered. For these plans, out-of-pocket fees are much higher than those of other plans.
Getting Cheap Health Insurance With Bronze and Catastrophic Plans
Catastrophic plans are also only available for individuals who are under the age of 30 or meet other required exemptions. Before opting for one of these plans, you should weigh your potential to cover an emergency medical cost; before you can reap the policy’s benefits, you will need to face a higher deductible. If you have a low income without a health savings account, it may then be better to choose a Silver plan even if it requires a higher premium every month.
If you are confident enough that you can pay a Bronze or Catastrophic plan’s deductible, then one of the two may suit you perfectly. Take note: we are only recommending these plans to those who are young and healthy, and who can shell out out-of-pocket funds for possible medical emergencies. You should probably avoid these plans if you have pre-existing conditions, as they won’t cover much of your necessary expenses.
PPOs vs. HMOs: What’s the Difference?
You have a few options to select from in terms of the type of plan, namely the Preferred Provider Organization (PPO) and the Health Maintenance Organization plan (HMO). There’s also an Exclusive Provider Organization (EPO) and a Point-of-Service Plan (POS) as well as a Catastrophic Plan.
- PPOs offer patients more flexibility in choosing a doctor and hospital that will be covered, while HMOs don’t offer that flexibility (you are only allowed to visit certain doctors and hospitals within your insurer’s network).
- HMOs are more cost-effective but are more restricted for coverage. For example, if you want to visit a specialist, you typically will need to get a referral from your primary care doctor. A lot of people tend to make a fuss about those referrals since it means an extra visit and co-pay to a doctor; if you’re in pain, that also means extra time spent without getting treatment from a specialist. To clarify, this doesn’t mean you shouldn’t get an HMO. It’s just something to think about.
- EPOs are similar to HMOs in that you’ll have to go to the doctors and hospitals covered within your given network, but you won’t need a referral. If you like HMOs but hate the idea of having to ask for a referral, an EPO may be the right option for you, but beware of the high deductibles. EPOs, incidentally, aren’t very common.
- A POS is also somewhat like an HMO, and you will need a referral. These are also not very common, and the deductibles are usually higher than HMOs. You might be thinking, “So why do they even exist?” The main selling point is that it is a pretty affordable health insurance plan, like an HMO, but you can visit doctors out of the covered network as well – but only if you’re willing to pay a higher fee for it.
Obamacare: Benefits & Enrollment
Most Americans have already heard about Obamacare, but many still don’t know what its benefits are. Here’s the breakdown.
What is Obamacare?
Obamacare provides low-cost insurance plans to decrease extra spending on healthcare costs in general. It also aims to provide discounts through the health insurance market, as well as provide healthcare facilities to low-income citizens. But no matter what your health insurance needs are, it can pay to shop around.
Obamacare Special Enrollment Period
If you’re just reading this and haven’t already signed up for 2019, you likely missed the open enrollment window between November 1 and December 15, 2018. In most states, enrollment options are very limited or don’t start again until late 2019.
Outside of this window of time, you’ll be able to get Obamacare through a qualifying life event like marriage, losing your job or having a child. If you don’t qualify for any of these, you should look for supplementary healthcare insurance products that will cushion your costs of medical care and offer some level of protection. Any level of healthcare coverage is better than none.
Cost-Sharing Medical Programs
Certain programs offer healthcare cost-sharing reductions, which are a cost-effective way to provide an alternative to traditional health insurance. They are faith-based cost-sharing programs that facilitate the voluntary sharing of desired and eligible medical and health-related expenses among members.
But it’s important to keep in mind that these healthcare sharing programs seem like a cheap health insurance option, they are NOT to be considered as proper insurance plans. The ministry program is not legally required to pay for a member’s medical expenses. Larger programs, however, do generally have a strong track record for paying eligible medical bills once the family or members have met their parallel amount to an annual deductible sum.
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Healthcare for Students and Young Adults
Young adults, listen up. You can stay on your parents’ health insurance plans until you are 26. This is applicable even if you don’t live with your parents or are on your own monetarily — and even if you’re married.
If you are 26 or under and are offered employer-sponsored health insurance, you have the option to choose between your work’s healthcare plan or continue to get cheap health insurance coverage from your parents’ plan. Once you turn 27, which is considered another qualifying life event, you’ll need to switch to an employer-sponsored healthcare plan or opt-in to one on your own.
If you’re a student, the cheapest student health insurance option for you is your school’s medical insurance plan. It is usually subsidized and discounted. These plans are affordable and offer comprehensive coverage, as schools work closely with the health insurance companies to make sure that the students are provided can have access to major medical benefits.
As these plans are only for students, if you are not enrolled in a school or your school is not offering an affordable health insurance policy, then you can choose any other plan which meets your needs.
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Medicaid as Cheap Health Insurance
In 2019, Medicaid is a cheap health insurance option, if you qualify for it. It is funded jointly by both the U.S. federal and state governments. Individuals who are eligible for Medicaid will have
access to high-quality care and low-cost coverage. Basically, they will receive the same benefits as received by any other private health insurance plan. Another plus: if eligible, you can enroll for Medicaid at any time during the year.
Short-term Health Insurance Plans
Short-term plans have made a comeback due to the executive order signed by President Trump late last year, known simply as Obamacare Relief. A short-term health plan offers little in terms of coverage, but its low cost makes it a great choice for the young and healthy. If needed, it could even serve as a solution for your children’s health insurance. You probably won’t get your pre-existing conditions covered or preventive services paid for, but if you come down with any serious injuries or illnesses, short-term plans are good options.
Short-term health insurance plans aren’t offered through the marketplace, so you won’t be eligible for subsidies. However, they should still be cheaper than their counterparts. Plus, you can enroll in short-term health insurance plans at any time, so if you’re looking to get health coverage today, do your research to get started.
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Private Medical Insurance Plans
If you think you can’t afford a private medical insurance policy, you still might want to double-check the private sector market before making a solid decision. Private sector health insurance companies (a lively and competitive space) offer medical insurance plans that can actually help save you money. Even if you won’t be eligible for the subsidies, private plans might still be cheaper than the plans sold in the public marketplace.
Before you finalize any plan, explore the private health insurance market to see if any meet your family’s needs. Platforms like FirstQuote Health can help with the search, allowing you to compare medical insurance quotes in your area in under 5 minutes.
Employer-Sponsored Plans (Group Coverage)
If you work for a company that offers free benefits, then of course this should be your first pick. Employer-sponsored health insurance premium coverage is for companies and is usually discounted by health insurance firms. Also called group coverage, these plans allow insurance companies to get more customers at one time and offer more discounts than their competitors. When insurance companies offer these discounted rates, employers split the cost amongst their employees, making this type of coverage cheaper other plans available in the market.
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Going Without Health Insurance: What to Know
The Tax Cuts and Jobs Act of 2017 nullified the Individual Mandate, so you will no longer have to pay a tax penalty for not having a health plan in the U.S. (starting in 2019).
Regardless, completely avoiding health insurance coverage is risky. You will be paying upfront for all medical bills, possibly exceeding your credit history if you don’t have the cash to cover fees. Medical organizations generally offer payment plans to cover these costs, but these plans involve taking on debt. Be aware: you should carefully inspect interest rates within the health insurance marketplace and understand the impact those payments may have on your budget.
With the Individual Mandate repeal, insurance premiums are expected to go even higher. That means that those who think they are healthy enough to go without insurance can do so. Those with pre-existing medical conditions stay on plans and pay higher health insurance premiums.
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On the Tax Penalty: Was it Cheaper?
When the ACA was first announced, it may have been the cheaper option to just pay the tax penalty of not having insurance. But that penalty has gone up since then. In 2015, it was $325 per person or 2 percent of your household income, whichever amount was higher. In 2016, the penalty was $695 or 2.5 percent of your income, whichever was higher.
The Affordable Care Act has been the subject of controversy for years, partially due to the required fee. While you no longer have to pay a penalty in 2019, policies could change in the future. And although it may be easier to save money without having health insurance, the risks to your future and long-term care can be substantial. Sure, you may be young and perfectly healthy right now, but an accident or unforeseen illness could easily leave you with a six-figure medical debt, ruining your entire financial future.
Here’s our point: with or without a tax mandate, going without health insurance is a huge risk. You’re not just investing in health insurance, but also wealth insurance. Whether your medical expenses would make a serious dent in your bank account or create unpayable debt, a healthcare plan is there to ensure you can recover both physically and financially from an illness or accident.
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Costs and Dangers of Going Uninsured
Generally speaking, investing in a health insurance company can be pretty expensive. But before deciding to opt out, make sure you are aware of all the risks you’re taking on (beyond just in terms of your health).
There’s a 1 in 5 chance of you landing in the ER at some point between the ages of 25 and 44. That trip that would likely cost you at least $1,450, on average. If you need surgery to get a broken arm fixed, that could cost you over $16,000 without a health insurance provider.
You might decide to instead put aside an allotted amount of money in your savings account each month in case you need to make an unexpected run to the doctor. That may work out for you for a while, but let’s go back to our earlier scenario: say you break a bone. The standard cost to fix a broken bone is $7,500 according to HealthCare.gov. If you end up staying at the hospital for a few days, you may rack up a bill of over $30,000.
When to Enroll in a New Health Insurance Plan
Think it’s time for you to enroll in a new plan? The “open enrollment” duration during which anyone can sign-up for or change health insurance plans runs from November 1st to January 31st. If you’re lucky enough to get your healthcare sponsored by your employer, take advantage of this open enrollment period to make any necessary changes to your healthcare plan.
If you change your job, get married or divorced, have a baby or experience another qualifying life event, you can make changes to your insurance plan outside of the above-mentioned open enrollment window.
Health insurance can be provided by your employer, your parents’ plan, COBRA, Medicaid or the VA, or by a policy you sign up for on your own.
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