Health insurance

“You shouldn’t need a master’s degree to understand your health insurance options,”  says expert Nicholas Newsad, MHSA, co-founder of Healthcare Transaction Advisors and author of The Medical Bill Survival Guide. Unfortunately, finding an affordable health care plan can be harder than passing the GRE. Before you go with the cheapest option you’re offered, or decide to opt for a diet that’s high in vitamin C instead, take a look at what we learned from Nicholas during our interview about the best options for quarterlife health insurance.

A few keywords for understanding your health insurance options:

HMO: A health insurance plan that covers a very limited group of medical providers (but is less expensive).

PPO: A health insurance plan that covers a large network of medical providers (but is more expensive).

Premium: The amount of money you pay per month to your health insurance provider for access to their insurance coverage and rates.

Deductible: The amount of money that you are responsible for paying toward your medical expenses before your insurance provider starts to cover them. This amount is set per year, though you are not required to spend that entire amount per year.

Co-pay: A fixed amount, paid by the patient directly to the medical provider for each physician office visit and each prescription filled. You might pay something like $30 for a primary care visit, $50 for a specialist physician office visit, and $15 for each time you fill a prescription. A co-pay is the patient’s portion of the amount that is due — the rest of the payment is paid by the insurance company.

Co-insurance: The same concept as a co-pay, except it is usually a percentage. So for outpatient x-rays, surgery, or an inpatient hospital stay, the insurance may say that you have to pay 20% of the total cost of care, while the insurance company pays 80%.

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If you’re 26+ and unemployed:

The federal poverty level for a single person is an income of about $11,000-$12,000 per year.  If you make that amount or less, that means the government will pay 100% of your health insurance premium. However, you’re not able to choose your own provider, and will only be covered by Medicaid.

If you’re 26+ and underemployed:

If you’re a single person making slightly more than the federal poverty level (about $12,000 to $15,000 per year), you’re eligible to purchase commercial health insurance (health insurance other than Medicaid) which will only cost you 2% of your annual income. As your income increases, the amount of your annual income per year that you’re expected to pay increases based on a sliding income scale.

If you’re a single person making less than $46,000per year, you’re eligible to have a percentage of your health insurance premium covered by the government through the insurance exchanges, which were established under the Affordable Care Act. Go to see if your state operates its own insurance exchange, or if you have to use the federal exchange.

To find out how much you qualify for, use the Subsidy Calculator. The insurance exchanges also cover preventative doctors visits, like a yearly physical or gyno exam. Open enrollment happens only in March and November for the program, but you can still buy on the exchange if you have had a life qualifying event during the last 60 days that caused you to lose your prior coverage (ex: turning 26, losing your job, etc).

If you’re 26+ and employed:

Most employers offer insurance plans through their company, and pay for all, or part of your monthly premium, leaving you to cover the rest of your premium (which gets deducted directly from your paycheck) as well as any co-pays, co-insurance, and medical expenses incurred before your deductible is reached — which varies per insurance plan.

If you choose not to go through your employer:

The reality is, if you’re employed, don’t qualify for the Insurance Exchange program, and choose to find health insurance coverage on your own rather than through your employer, you’re looking at a payment of, at the very least, $170 dollars per month.

The reason that health insurance providers are willing to offer you a price that low (yes, this is considered low for health insurance) is because these plans always come with a high deductible. Meaning that, unless you’re incurring more than $5,000 per year in medical bills, your insurance provider isn’t covering any of your medical expenses.

So then, why are you paying them $170 dollars a month?

Because, if you’re covered by a health insurance provider, you’re getting access to their rates — meaning that a doctor’s visit that would have cost you $300 dollars without coverage is only (only?!) costing you $120.

If you’re able to spend a bit more per month on your premium ($200-$300) you’ll have access to a plan with co-pays, meaning that doctors visits would cost something more manageable — around $25-$50 per visit.

Many insurance providers also cover preventative doctors visits — meaning a once a year physical exam by your primary care doctor, as well as a yearly visit for things like a colonoscopy or gyno exam. You can find out what each plan covers by looking at the provider’s “benefit summary page” — a 1-2 page document that lists everything that is included in each insurance plan offered.

If you decide to put that money toward a year’s supply of orange juice and hope for the best:

It’s still going to cost you a penalty fee. As of 2014, you’re forking over $95 dollars, or if you’re married, 1% of your annual household income per year.

By: Danielle Page

This article was originally published on This Is Quarterlife.

This Is Quarterlife
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