Frequently Asked Questions
How does Health Insurance work?
Network
When you sign up for a health insurance program, you are purchasing a membership typically to either an HMO or a PPO network. By having a membership to a network, you get a discount on the services provided by the doctors who are in the network, due to previously negotiated rates.
Deductible and Max out of Pocket
Most plans will have an annual deductible. If you hit your deductible, that’s when coinsurance kicks in. Most of the time you will see either 80/20, or 70/30. Let’s say you selected the 80/20 option. This means after hitting your deductible, your in network discount will still be applied, but then on top of that your insurance will cover 80%, and you cover the remaining 20%. If you hit the ‘max out of pocket’ limit, the insurance company pays the rest going forward.
*Tip: Don’t forget to open an HSA account! This is an account you can load up with pretax dollars for any medical expense, equating to about 30% savings since these dollars aren’t reduced by taxes or social security.
What is the difference between an HMO and a PPO?
HMOs are typically the lower cost option, whereas PPOs will be slightly more, but get you access to a much larger network including specialists, and with stronger pricing agreements. Additionally, in a PPO network you can usually see a specialist without a referral. Lastly, HMO plans will only be in state, whereas PPOs are nationwide, including the US territories.
What is the ACA/marketplace/Obamacare?
These are health insurance plans that anyone can purchase, no application needed, via the government’s exchange website. These plans have a limited window for sign up called open enrollment which is usually Nov 1 - Jan 15. While these plans can only be purchased during this window, they can be cancelled at any time.
What is a private health care plan?
Insurance companies are starting to realize that the ACA does not work well for everyone and are now offering private options. These plans require an application with good health and can be signed up for at any time.
How do marketplace plans compare to private health insurance?
Most marketplace plans only offer an HMO network whereas private health insurance plans offer a PPO network. Additionally, because marketplace plans don’t require an application (ie everyone is accepted) this creates a large pool of people that you’re helping to insure and cover their medical expenses, as well as the subsidies that the government gives to low income earners. (The more you earn, the higher the rate you get charged on a publicly available plan). In a private plan where application is required, you are now in a much smaller, healthier pool of people, which allows for lower monthly payments.
Why do I need health insurance? I rarely go to the doctor.
Medical costs are the leading cause for bankruptcy in the US (source). Everyone is always healthy until they are not. Medical debt and/or brankruptcy due to unexpected healthcare expenses is avoidable by making sure you have quality coverage in place before a medical event or accident occurs.
This is a significant expense. Is there anything I can do?
Yes. If you are low income you can go on healthcare.gov and likely qualify for a subsidy. If not, private major medical plans, upon qualification, on average cost 20% less than publicly available plans. All of our private plans are tax deductible meaning you can reduce your taxable income by subtracting the monthly premium. Lastly, I strongly recommend for people to open an HSA account, which works as a debit card for medical expenses with untaxed dollars. You can use this on things such as: cold medicine at your local pharmacy, prescriptions, Amazon now accepts HSA, alot of massage, accupuncture, and chiropractors now accept HSA. If you get botox or facials from a medical facility, you can use your HSA. The list goes on!
I haven’t met Theresa, how do I know this is a good idea?
As a licensed agent, I am governed by HIPPA privacy policy; my NIPR license number is 824850. You’re welcome to ask me any questions. I’m here to serve our community.