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Your Guide to Choosing Health Insurance Coverage

Your Guide to Choosing Health Insurance Coverage

Posted Jan 09, 2013 by Author

Individuals and families must purchase their own health insurance coverage for several reasons: being self-employed, working for an employer who does not offer benefits, being in between jobs with benefits and early retirement are just a few examples.

Though it may be tempting to go without health insurance coverage, especially when money is tight, securing medical insurance is important. Maintaining continuous health insurance coverage has been linked to staying on top of needed care, preventive care and prescriptions. Plus, health insurance helps provide financial security when an unexpected illness or accident occurs. Furthermore, as of Jan. 1, 2014, the Affordable Care Act requires that most Americans have health insurance that fulfills minimum essential coverage requirements; those who go without may owe a tax penalty known as the shared responsibility payment. Visit healthcare.gov/exemptions to learn more.

There are many plan options, which can make shopping for medical insurance intimidating. You want to find coverage you can trust and afford. Research these options thoroughly and discuss them with an insurance agent in order to make an informed decision.

Looking for an agent? Visit the National Association of Health Underwriters

This guide explains the main types of health insurance coverage available, as well as ancillary coverage such as dental, vision and life. It also offers starting points for comparing and narrowing down your plan options.

Individual and family

When you don’t have access to major medical insurance through an employer, association or another group, you can purchase affordable health insurance on an individual or family basis.

Before 2014, when many Affordable Care Act provisions took effect, the major difference between group and individual health insurance involved evidence of insurability—applicants would generally answer a health questionnaire and undergo a medical examination before being approved. Today, however, major medical health insurance applicants may no longer be denied coverage or charged more based on health history. You may simply shop for a health insurance plan, fill out an application, enroll and start making premium payments.

Individual and family health insurance must now meet minimum essential coverage requirements, including certain preventive services at no additional cost and health care services in 10 essential health benefits categories, to comply with the health care reform law—download the free ebook Your Guide to Understanding Obamacare: Health Plans for Individuals and Families to learn more about health insurance and the Affordable Care Act.

Health insurance plans purchased through the state-based and federally facilitated exchanges (aka the Health Insurance Marketplace) may qualify for income-based premium tax credits and cost-sharing subsidies. Use the healthedeals.com Health Care Reform Calculator to estimate your annual Obamacare health insurance premium and tax credit.

Where to buy: These ACA-compliant plans may be purchased on state-based and federally facilitated health insurance exchanges as well as in the private marketplace through a health insurance agent, carrier-specific website, or multi-carrier website such as healthedeals.com.

Critical illness

Critical illnesses can devastate more than your health; they can strain your finances. Critical illness insurance helps ease the burden by paying a lump sum benefit upon diagnosis of covered critical illnesses. Most plans cover six to 12 different critical conditions, which may include life-threatening cancer, kidney failure, heart attack, stroke, coma, cancer in situ, major organ transplant and severe burn.

Critical illness health insurance helps with related expenses beyond doctor and hospital bills, including childcare, travel and lodging. It can even help pay for experimental treatments, copays and deductibles, and providers your medical insurance doesn’t cover. This coverage is not comprehensive, however, and serves as a supplement to a major medical plan. Critical illness plans are not ACA-compliant and will not prevent you from owing the shared responsibility payment tax penalty.

Where to buy: Critical illness plans are not available through state-based and federally facilitated health insurance exchanges. They may be purchased in the private marketplace through a health insurance agent, carrier-specific website, or multi-carrier website such as healthedeals.com.

Temporary coverage

Temporary health insurance plans offer a short-term solution when a life transition leaves you uninsured. These plans, also known as short-term medical insurance plans, are easy to enroll for and usually involve answering a few health questions online. Approval takes place within minutes, and coverage begins as early as the next day.

Temporary health insurance is not intended to serve as a long-term health insurance solution. Coverage usually lasts for as few as 30 days or as many as 364 days. Policies are typically offered with a range of premium and deductible options. They are often advertised to be as much as 35 percent less than typically privately purchased plans.

Temporary health insurance plans offer a safeguard from unexpected major medical expenses during a gap in coverage. They usually cover a range of physician services, surgery, outpatient and inpatient care. In addition, policyholders can often choose their own doctor and hospital without restrictions, although there may be financial incentives for using in-network providers. Plans typically will not cover routine office visits, preventative care or preexisting conditions, so be sure to check the policy's list of exclusions.

These plans tend to be a good fit for healthy people who need short-term medical coverage—those who missed Obamacare open enrollment and are waiting for the next open-enrollment period to begin, recent college grads, recent divorcees, those between coverage due to job loss, or those waiting for coverage to begin under a new employer. Temporary health insurance plans are not ACA-compliant; having one will not prevent you from owing the shared responsibility payment tax penalty.

Where to buy: Temporary health insurance plans are not available through state-based and federally facilitated health insurance exchanges. They may be purchased in the private marketplace through a health insurance agent, carrier-specific website, or multi-carrier website such as healthedeals.com. 

Limited benefit medical

Limited benefit medical insurance plans can help fill the gap for those without major medical coverage. In general, they are suitable for those considered “uninsurable” due to preexisting conditions; those who can’t afford major medical insurance but need basic, non-catastrophic coverage; those who seek inexpensive, creditable coverage between jobs and those who have exhausted their 18-month COBRA benefits and have no other options.

Limited benefit medical plans pay stated benefit amounts. Guaranteed issue, simple and straightforward, they do not involve underwriting or health questions. While they are not designed for catastrophic coverage, limited benefit medical plans provide first-dollar benefits for physician office visits, preventative care, diagnostic work, emergency room visits and more.

Because of their limited nature, these plans are not right for everyone. They are not an alternative for those who qualify for major medical coverage. They are not an alternative for those who qualify for major medical coverage and are not ACA-compliant, which means they will not prevent you from owing the shared responsibility payment tax penalty.
Where to buy: Limited benefit medical plans are not available through state-based and federally facilitated health insurance exchanges. They may be purchased in the private marketplace through a health insurance agent, carrier-specific website, or multi-carrier website such as healthedeals.com.

Dental

Many health insurance plans provide coverage for non-cosmetic dental work necessary as the result of an accident. Some plans even include limited coverage for hospital room-and-board expenses related to dental procedures, such as removal of impacted wisdom teeth, performed in a hospital. Dental insurance helps cover oral health care costs such as cleanings and restorative work.

Dental services are generally divided into different coverage levels, and most plans cover at least diagnostic care including semiannual examinations, semiannual cleaning, X-rays and diagnosis. To promote preventive care, these “Level 1” services are often covered at higher reimbursement levels than “Level II” (basic services including fillings, crowns, jackets, crown repairs, extractions, root canals) and “Level III” services (major services including bridges, replacement bridges and dentures).

Under the Affordable Care Act, dental insurance is not required for adults or children. However, the pediatric dental and vision essential health benefit must be either embedded in or bundled with all health insurance coverage unless it is offered as standalone coverage through the state’s health insurance exchange. Some health insurance exchanges may also sell adult dental plans.

Where to buy: Adult dental insurance may or may not be available through state-based and federally facilitated health insurance exchanges. Dental plans may also purchased in the private marketplace through a health insurance agent, carrier-specific website, or multi-carrier website such as healthedeals.com.

Vision

Most health insurance plans provide coverage for medical care related to eye injury or disease, but do not cover the costs of periodic eye examinations or corrective lenses. Vision care is most often covered on a scheduled basis that pays a fixed dollar amount for examinations, lenses and frames. Vision care is almost universally noncontributory due to the potential for biased selection.

Vision insurance is not required under the Affordable Care Act, nor is it sold on the state-based and federally facilitated health insurance exchanges. Some vision benefits are available to children through the pediatric dental and vision essential health benefit, which must be either embedded in or bundled with all health insurance coverage unless it is offered as standalone coverage through the state’s health insurance exchange.

Where to buy: Vision insurance may be purchased in the private marketplace through a health insurance agent, carrier-specific website, or multi-carrier website such as ehealthinsurance.com.

Life

In the event of your death, life insurance pays a death benefit that helps care for your dependents. Choose a plan that suits your budget and your needs, and then feel the peace of mind that comes with knowing your family is taken care of should the worst occur. Life insurance is not required under the Affordable Care Act.

Where to buy: Life insurance may be purchased through an insurance agent or directly from life insurance companies.

Things to consider as you shop around

Premiums

What will you pay just to have health insurance or supplemental insurance coverage?

Coverage/benefits

How long do you need health insurance or supplemental insurance coverage? What do you use health insurance or supplemental insurance coverage for? What services does the plan include? How are benefits paid; do you have to submit a claim?

Access

Will you be able to choose your own doctors, hospitals and other providers, or is there a network of providers you must choose from? If there is a network, are the providers accessible to you? Will you have access to after hours and emergency care?

Out-of-pocket costs

What will you pay for coinsurance, copays and deductibles? Are prescription drugs covered?

Exclusions and limitations

Are things like preexisting conditions and pregnancy excluded? Are certain professions excluded? Does the coverage last for a limited time?

Get assistance

There are many plan options, which can make shopping for medical insurance intimidating. You want to find coverage you can trust and afford. Research these options thoroughly and discuss them with a health insurance agent or exchange-based assister in order to make an informed decision.

If you need help determining whether or not to buy health insurance on the private marketplace or through your state’s exchange, have questions about the Affordable Care Act, or want to learn more about your temporary health insurance and supplemental insurance plan options, contact a healthedeals.com health insurance agent at 888-839-7679.