[With no national health insurance scheme, getting some sort of health insurance coverage is important. Even if a high deductible is chosen so as to lessen the premium cost, the health insurance coverage will at least protect against an unexpected catastrophic expense. Expensive medical things can happen to healthy people. - ed.]
Thinking About Health Insurance Choices
Which of these statements best describes your thoughts on health insurance?
"I get health insurance through my job. I have the coverage I need... I think"
Many employers offer a choice of plans. The information provided will help you figure out the plan that's best for you.
"I know I need health insurance, but I'm not sure how to get the best protection at the lowest cost."
You're not alone. Many people have questions about how to select a health insurance plan. The information provided will help you find some answers.
"I can't afford health insurance right now. I have too many bills to pay and other things I need to buy."
Health insurance is one of your most important needs. Without it, one serious illness or accident could wipe you out financially. The information provided will help you decide which is the best plan you can afford.
Why Do You Need Health Insurance?
Today, health care costs are high, and getting higher. Who will pay your bills if you have a serious accident or a major illness? You buy health insurance for the same reason you buy other kinds of insurance, to protect yourself financially. With health insurance, you protect yourself and your family in case you need medical care that could be very expensive. You can't predict what your medical bills will be. In a good year, your costs may be low. But if you become ill, your bills could be very high. If you have insurance, many of your costs are covered by a third-party payer, not by you. A third-party payer can be an insurance company or, in some cases, it can be your employer.
Where Do People Get Health Insurance Coverage?
Most Americans get health insurance through their jobs or are covered because a family member has insurance at work. This is called group insurance. Group insurance is generally the least expensive kind. In many cases, the employer pays part or all of the cost.
Some employers offer only one health insurance plan. Some offer a choice of plans: a fee-for-service plan, a health maintenance organization (HMO), or a preferred provider organization (PPO), for example. Explanations of fee-for-service plans, HMOs, and PPOs are provided in the section called Types of Insurance.
What happens if you or your family member leaves the job? You will lose your employer-supported group coverage. It may be possible to keep the same policy, but you will have to pay for it yourself. This will certainly cost you more than group coverage for the same, or less, protection.
A Federal law makes it possible for most people to continue their group health coverage for a period of time. Called COBRA (for the Consolidated Omnibus Budget Reconciliation Act of 1985), the law requires that if you work for a business of 20 or more employees and leave your job or are laid off, you can continue to get health coverage for at least 18 months. You will be charged a higher premium than when you were working.
[The premium for staying on the employer health insurance coverage is the same as what the employer pays, although a 2% administrative fee can be charged by the employer. It may seem to be a "higher premium" because the employer is no longer contributing to the premium payment. - ed.]
You also will be able to get insurance under COBRA if your spouse was covered but now you are widowed or divorced. If you were covered under your parents' group plan while you were in school, you also can continue in the plan for up to 18 months under COBRA until you find a job that offers you your own health insurance.
Not all employers offer health insurance. You might find this to be the case with your job, especially if you work for a small business or work part-time. If your employer does not offer health insurance, you might be able to get group insurance through membership in a labor union, professional association, club, or other organization. Many organizations offer health insurance plans to members.
[Very few organizations offer voluntary health insurance coverage to members because the ones with health problems join more than those without, so claims go too high, premiums go too high, and the plan goes out of business.
The major objection to buying health insurance coverage is simply its cost. When in good health, it is tempting to "save" the premium for health insurance coverage by postponing the decision. Unfortunately, life is uncertain. Every year, a percentage of healthy procrastinators end up wishing they had bought health insurance coverage because the unexpected caught up with them. - ed.]
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