So, you’ve decided it’s time to cut ties with your health insurance plan, but can you cancel your policy? The answer is both yes and no. You can cancel your health insurance, but if you do it at the wrong time or without a backup plan ready to go you could face fines or massive coverage gaps.
When To Cancel Your Health Plan
It’s best to cancel your health insurance policy once you have a replacement ready to take its place. If you don’t, you will have coverage gaps, leaving you vulnerable in the event of a health emergency. If you are looking to make the switch,Open Enrollment Period (OEP) is the best time to look into a different health insurance plan. The only time you can switch to a new health insurance plan outside of the OEP is if you qualify for a Special Enrollment Period (SEP). You qualify for an SEP if:
You just got married
Filed for divorce
Just had a baby
You or your spouse got a new job, losing your group health insurance coverage
You’re moving outside of your coverage area
Your current plan is no longer offering coverage in your area
Your current health insurance company is out of business
The Right Way To Cancel Your Private Health Plan
It’s important to cancel your health insurance plan properly so that there is no confusion or loose ends. Below are the steps you can take to cancel your plan the right way.
Call your health insurance company
If you have health insurance through the Marketplace, you can login to your account and terminate the plan’s coverage. If you need help canceling your plan online, you call their customer service line. When you’re canceling a private health insurance plan, you can contact your insurance company directly. Your health insurance company’s phone number is printed right on your policy, health insurance card, and premium bills. Your health insurance provider may let you cancel over the phone. Occasionally, they may request that you fax or mail them additional documentation such as a confirmation letter.
Follow Your Plan’s Cancellation Process
Every health insurance provider has a cancellation procedure you must adhere to, such as ensuring your policy end dates are accurate to avoid a lapse in coverage. During your online or phone cancellation, an insurance agent will confirm the steps you have to take to successfully cancel your health insurance plan. Note the name of the representative and any cancellation confirmation numbers. This is important in the event that there are any procedure errors during the cancellation you’ll be able to quickly prove when the policy was ended.
Ask About Premium Refunds and Check Your Bank
If you paid your plan in full for the year and want to cancel it before it expires, ask your health insurance company if it will reimburse you for the months you’ve already paid for but have not used yet. Many insurers will issue a refund for the remaining time on your policy. Check your bank statements after your new health insurance coverage begins to ensure that the canceled plan is no longer in effect and charging your account. You’ll also want to make sure that the new policy is active and has taken the first payment if you have one.
Check Your Active Health Coverage
Don’t cancel your old policy until you’ve gotten a new one and reviewed the coverage start date. Make sure the active coverage periods don’t overlap, as it’s illegal to submit claims to two separate major medical policies. You’ll also want to check your monthly health allowance if your employer reimburses you for your insurance premium or other out-of-pocket medical expenses through a health reimbursement arrangement (HRA) or health insurance stipend. This amount may affect your desired premium payment and the types of medical expenses you may get. Additionally, check the type of HRA your company offers. Integrated HRAs supplement employer-sponsored health insurance plans by helping to pay for deductibles, copayments, medical services, and other out-of-pocket costs, but cannot reimburse health insurance premiums.
Know Your Rights
Every state has consumer protection laws and insurance regulators who can help you with questions or complaints regarding your individual coverage. Your state laws may address health coverage requirements, prompt payment of claims, access to specific specialists, and certain treatment coverage. These protection laws apply to all plans, whether individual coverage or employer-provided health insurance, in order to safeguard your access to health services. If you submit false information on your health insurance application, your policy could be canceled. However, they cannot terminate your coverage if you made an honest error on your application. If you have unpaid premiums, your provider can terminate your coverage. In the majority of instances, your health insurance provider must give you at least 30 days notice before canceling your coverage due to missed monthly payments. This notice affords you the opportunity to appeal the decision or find a more cost-effective alternative.
How To Cancel Your Group Health Plan
You may need to cancel your employer-sponsored health insurance plan, even if you remain employed with the company. For example, your spouse or domestic partner’s employer may offer a more affordable plan option. Canceling an employer-sponsored plan is fairly easy if you follow these steps:
Contact HR – Your company’s human resources department will be able to answer your questions and will be your primary contact through the entire cancellation process
Ask about dates – Make sure you know the cancellation date, and make sure your new coverage will begin on or right after that date. You don’t want your plans to overlap.
Complete the paperwork – If you’re opting out of your group plan early, there will likely be a bunch of paperwork that comes with it. Make sure you complete, sign, and submit these forms on time
Cancellation Penalties
In most instances, there is no fee for canceling a health insurance policy. However, some insurance providers do charge a cancellation fee. This would be specified in your plan’s terms and conditions, so you are aware of this policy before you buy it. While the federal government no longer imposes a tax penalty for not having health insurance, some states do. The District of Columbia, California, Massachusetts, New Jersey, and Rhode Island have penalties for not having health insurance. Each state has its own system of fees. Check your state’s regulations before you cancel your health insurance, as you may qualify for an exemption from the tax penalties.
When Can’t I Cancel My Health Plan?
There are very few circumstances where you’re not able to cancel a health plan early. Some employer group health plans are paid for out of your paycheck prior to taxes being taken out. These plans are called Section 125 plans. They can be an excellent way to save money on insurance and taxes. If you have one of these plans, however, you can only change or cancel it during the Open Enrollment Period, or if you have a qualifying life event. Your HR department will be able to let you know if that’s the case with your group plan.
Additionally, if you are under 30 and have a short-term or catastrophic insurance plan, you may not be able to cancel your coverage early. Many of these plans are bought for a specific period of time and can’t be canceled early. Make sure you understand the terms and conditions of these plans before enrolling.
Why You Need Health Insurance
So far we’ve talked about how to switch health insurance plans, but we haven’t mentioned people canceling health insurance with no plans to get another plan. We know that sometimes when money is tight you start cutting expenses and health insurance is one of the first things to go. Especially if you’re healthy you think “well, I don’t use it, I don’t need to pay for it”, but that way of thinking can be detrimental. While being healthy is great, the objective here is to maintain that health throughout one’s life. Unfortunately, neither disease nor accidents can be predicted. Without health insurance, you are responsible for all of your medical expenses. Which poses a substantial threat to your financial and medical stability.
Health Benefits Of Health Insurance
The greatest benefit of health insurance is access to necessary medical care. Health insurance provides access to a comprehensive network of physicians, specialists, hospitals, and laboratories. This network collaborates with you and each other to help you prioritize wellness and prevention. In fact, the majority of healthcare plans include free preventative services, such as immunizations and screenings, to help you stay healthy and avoid illness and its consequences.
Additionally, the Affordable Care Act requires Marketplace plans to cover pre-existing conditions. This means that even if you already have a chronic illness, you will not be denied coverage or charged more for your pre-existing condition. Since you’ll have regular access to the necessary doctors and specialists, your healthcare plan will also assist you in managing the care for any chronic illnesses you may be living with.
Your health insurance provides you with the most effective means of maintaining your health. Having access to this type of continuous care can ultimately result in a longer and healthier life. In fact the mortality rate of adults between 17-64 without health insurance is 40% higher than those without insurance, according to the National Library of Medicine.
Financial Benefits of Health Insurance
Health insurance protects not only your health but also your finances. With an insurance plan, you will have less out-of-pocket healthcare costs, as your insurance will cover your medical services for a monthly premium. You will also be healthier, which will lower your out-of-pocket costs. Consider how much you would pay out of pocket for an unexpected medical emergency Which could easily cost you thousands of dollars.
Working With An EZ Agent
It can be frustrating to organize your own health insurance because there are so many variables to take into account. Why not let a professional do all the hard work for you, for free? A licensed EZ insurance agent can describe the advantages and disadvantages of each plan, and help you choose the best plan for your needs. EZ agents can save you hundreds annually on health insurance premiums. This is accomplished by our ability to search both on and off market for the most cost-effective plans. We can also locate and apply any discounts you may be eligible for. And we don’t stop at finding you a plan; we also assist with plan maintenance after the fact! We can assist you in filing claims with your insurance company and renewing your policy when the time comes. To begin, enter your zip code in the box below or call one of our licensed agents at 877-670-3575.
Has shopping for health insurance left you confused and frustrated? Don’t worry, we’ve got you. Shopping for health insurance can feel about as easy as getting home during rush hour traffic, but understanding your options and how to choose plans is important. To help we’ve put together a list of questions for you to ask while choosing a plan. These questions can help you sift through the various plan details and help you decide which ones are best for you, your family, your health, and your budget. Think of it as your health insurance cheat sheet.
With these questions in your pocket, you’ll be able to confidently compare health plans. Whether you’re selecting a plan for the first time, or if you’re thinking about changing your current plan, these questions are important to keep in mind.
How Much Does the Plan Cost?
You’ll want to carefully look over plan prices, not just the premium, you’ll want to know how much the other out-of-pocket costs will be as well. Premiums, deductibles, copays and other costs of health insurance all vary from plan to plan and state to state. So, comparing is key here to make sure you get a plan that fits within your budget. We’ve gone into a little more detail about each of the costs you’ll want to research below.
Your Premium
This is the monthly fee you pay for your insurance company to provide you and your family with coverage. The cost of your premium will vary depending on a few factors. First, the majority of insurance companies will underwrite you before they insure you. Meaning they will collect all of your health data and use them to determine your “risk factor”. Other variables include your age, your lifestyle, and sometimes even where you live.
Your Deductible
Before your plan will cover your medical expenses, you have to first meet your deductible. For example, say your plan carries a $1,500 deductible and you need a surgery that costs $3,500. You will have to pay $1,500 and then your company should cover the remaining $2,000. Keep in mind, your premium will not count towards your deductible. The things that will count towards it are any bills you pay for hospital stays, surgeries, lab tests, anesthesia, doctor visits that aren’t covered with a copay, and medical devices such as pacemakers.
Your Copay or Coinsurance
When you visit the doctor or fill a prescription, you’ll pay a copay upfront. It’s a flat fee, typically between $10-$30. Each part of your health services may have different copays such as $30 per doctor visit or $20 per prescription, but each of those services will always have that same copay. For instance, if you injure your back and visit the doctor, or if your child’s asthma medication needs to be refilled, the copay amount – for that visit or medication will remain the same.
Coinsurance is the portion of medical expenses you are responsible for after your deductible has been met. Coinsurance is a way of saying that you and your insurance company each pay a portion of the eligible costs that total 100%. For instance, if your coinsurance is 20%, you are responsible for 20% of the cost of your covered medical expenses. Your health insurance will cover the remaining 80 percent.
What Kind Of Coverage Do I Need?
After deciding your budget, the next question is about coverage. Do you have health conditions? Do you know you see the doctor often? Are you healthy? There’s a large variety of plans that will give you more coverage if you aren’t healthy, or less coverage if you are healthy. That way you don’t pay for coverage you don’t need, and you know the things you do need will be taken care of.
Health Maintenance Organizations (HMOs) provide access to doctors within their network, whereas Preferred Provider Organizations (PPOs) provide access to a larger network at a higher cost. There are also 4 plan tiers available: Bronze, Silver, Gold, and Platinum. Each tier has varying prices with varying coverage. If you want a low monthly premium and are healthy, a Bronze or Silver plan is your best option. While Gold and Platinum plans have higher premiums but lower deductibles. Making them ideal for anyone with medical conditions that need more care.
Is My Current Doctor In The Plan’s Network?
One of the most common concerns while searching for health insurance is whether or not you can keep seeing the doctors you already have. If you have ongoing medical conditions, or simply just like your current doctor, the last thing you want to have to do is switch doctors. It means having to explain your entire medical history and probably retake tests you’ve already had done. It can also bring up an issue if your new doctor doesn’t agree with your old doctor’s diagnosis or treatments. Your doctor is definitely one of those situations where familiarity is important. When you’re shopping for health insurance, find out what the plan’s network looks like. The network isn’t just primary doctors either, it’s also hospitals, facilities, and specialists as well. You don’t want to find out too late that the hospital closest to you doesn’t accept your insurance.
Are There Extra Benefits or Perks?
This may seem small, but it can be the selling point between one plan over another. Some plans will offer things like dental and vision discounts, telehealth, gym memberships, etc. You’ll want to decide if you want the bells and whistles or if you don’t really care for them. These perks can be offered as “free”, but keep in mind the more benefits a plan has the more expensive your plan is likely to be.
Will My Plan Travel with Me?
If you travel frequently, whether for work or leisure, you should make sure your plan has the freedom and flexibility you’ll need, regardless of where you are when you need it. You’ll want to look at the network again, and the budget. Will you pay more for out-of-network facilities and doctors? If you do pay more, can you be reimbursed? If it’s Christmas and you’re four states away visiting family and you need the emergency room the last thing you want to do is worry about a giant medical bill.
Is My Medication Covered?
Two-thirds of adults in the U.S. use prescription medications, so there’s a good chance you will too, if you don’t already. It’s not uncommon for you to get caught up in the other details of your health plan and forget to look at the prescription drug coverage. These costs can rack up quickly, so be sure to look at the plan’s drug formulary before you enroll. The formulary is a list of prescription drugs that are covered as well as their associated costs. That way you can better budget for any medications you currently take, as well as any antibiotics you might need in the future.
Will This Plan Cover Alternative Therapies?
If you’re interested in alternative therapies (alternative medicine) you’ll want to make sure those will be covered as well. Some alternative medicine would be a chiropractor, having a home birth, or getting acupuncture. Different health plans handle these types of services differently. In some circumstances they can be covered similarly to your other health care. On the other hand, some plans might have minimal or no coverage for alternative therapies. If this type of care is important to you, make sure to look closely at the plan’s benefits in detail.
Who Can I Call With Questions?
Most people agree that, when it comes to health insurance companies, the worst part is the lengthy phone calls. There is typically a customer service line, but you’ll most likely deal with a lot of transfers or possibly be placed on hold for long periods of time. Some have direct numbers for agents to speak to you directly or chat services where you can virtually ask your questions. Most will even have a discussion forum where you can find the answers to some of your questions. The worst systems are the automated phone systems, where you have to listen to several menus and hope what you need is on the list. There’s a way to avoid all of that hassle and uncertainty though: giving one of EZs agents a call.
EZ.Insure provides highly trained agents in your region who can answer all of the above questions and then some. You get to speak with a real person, -skip the automated line, and get all of -the information quickly. The best part? It’s free! We will assign you to your own personal agent who will search and compare all available plans in your area at no – cost. We make sure to find you plans that fit within your budget without sacrificing coverage needs. To get your instant free quotes today simply enter your zip code in the box below or give us a call at 877-670-3557 to speak to an agent directly.
If you’re looking for a health insurance plan, you probably feel like you’ve had a lot of terminology to learn. Especially when it comes to the out-of-pocket costs that you’ll be responsible for with your plan. It’s true that there’s much more to plans than just monthly premiums. You’ll most likely have to think about copayments, coinsurance, and annual deductibles, as well. And it’s this last expense that we’re going to look at here. Your annual deductible is the amount that you will have to spend on covered medical expenses before your health insurance plan begins to pay its share.
And when it comes to deductibles, you actually have choices. You can choose a high-deductible health plan (HDHP) or a low-deductible health plan (LDHP). But what’s the difference between these types of plans? This article will guide you through the specifics of HDHPs and LDHPs. As well as how to determine which type of plan will serve your needs most effectively based on your needs.
High Deductible Health Plans
A high deductible health plan (also known as a HDHP). As the name implies, is a type of health insurance policy that has a higher annual deductible than other types of healthcare plans. This difference can even be in the four-figure range. Meaning that you will most likely have to pay thousands of dollars out-of-pocket for medical care before your plan will begin to cover any expenses.
With that being said, monthly premiums for these plans tend to be lower than for other plans. And you will still have routine preventive care covered in full before you meet your deductible. As with any ACA-approved plan. The actual deductible you will have if you choose a HDHP will vary depending on your plan and insurance company, but there is a minimum deductible amount for a plan to be considered a HDHP, which changes each year. For 2023, the minimum annual deductible for individuals is $1,500, while the minimum for families is $3,000.
Advantages of HDHPs
As mentioned above, if you choose a HDHP, you will have a plan with a high deductible. But lower monthly premiums. This means that if you know that you will most likely only use the plan for preventive care rather than more extensive medical treatment. You could save money by going with a HDHP.
Other than lower monthly premiums, there is one other big advantage to HDHPs. You can open a health savings account (HSA) in conjunction with a HDHP; in fact, in order to have an HSA, you must have a HDHP. HSAs can be a great way to help pay for your out-of-pocket medical expenses. They are tax-advantaged accounts that can be used to pay for qualified medical expenses that your plan doesn’t pay for. Such as acupuncture and dental expenses. Your contributions to your health savings account are not subject to income tax. And they can be used to reduce the overall cost of your high deductible.
Disadvantages of HDHPs
The high cost associated with these plans is the most significant and obvious disadvantage of HDHPs. If you have a higher deductible, it means that you are responsible for paying a greater portion of your healthcare costs out-of-pocket before your plan begins to contribute. This may put a significant dent in your financial resources. Particularly if you are forced to deal with unanticipated problems relating to your health.
Low Deductible Health Plans
One of the most significant differences between a HDHP and a LDHP is that a low deductible plan typically has a lower deductible. But a higher monthly premium payment.
Because of their lower deductibles, this type of plan is typically chosen by people who see their doctor more regularly. And who need more medical care. If this is the case for you, you might find that the higher amount you’re paying in monthly premiums is balanced out by the low deductible, since once you meet this lower amount, your insurance company will take care of your remaining costs. That could mean you’ll actually end up paying less out-of-pocket. In addition, LDHPs do not qualify for a health savings account (HSA), which is another difference between the two types of plans.
Advantages of LDHPs
Having a plan with a low deductible means you’ll have less to pay out-of-pocket if you need to access healthcare services more frequently, or if you have a true emergency or a catastrophic illness or injury, both of which can be very expensive. People who are older or who have a medical history that includes chronic conditions or illnesses may find that selecting a plan with a low deductible is the better option for them. Others who might benefit from this type of plan include:
Women who are pregnant or who have the intention of becoming pregnant
People who undergo a variety of specialized treatments or need expensive medications, such as those with cancer or on dialysis
Any individual who is contemplating undergoing a surgical procedure within the next year
Disadvantages of LDHPs
Plans with low deductibles tend to have higher monthly premiums, since insurance companies will only cover a greater percentage of your care if you pay a higher premium. These premiums can feel like a burden each month, and if you don’t end up using your plan as often as you thought you might, you could start to feel like you’re wasting money.
Who Should Choose a High Deductible Health Plan?
As we pointed out above, a HDHP might be a good choice for you if you are healthy and anticipate having few to no healthcare expenses. In these circumstances, the lower monthly premiums that you would be paying for your “just in case” plan (which will also cover your preventive care), would save you money over a more expensive plan.
In addition, if you can’t afford a low deductible health insurance plan, you can still get yourself at least some level of coverage with a HDHP. And it’s important to have a plan, even if it has a high deductible, because health insurers negotiate rates with providers. This means you will pay less overall for products and services related to your health if you have health insurance than if you do not have health insurance.
In addition, your high-deductible health plan (HDHP) will pay for necessary medical care, such as preventive services, if you purchase the plan on the individual market. But even if you have enough money to pay for a low deductible health plan, it may be worthwhile to consider a high deductible health insurance plan. Remember that if you have a high deductible health plan (HDHP), you can help to offset your out-of-pocket expenses with a health savings account (HSA).
Who Should Choose a Low Deductible Health Plan?
Again, a health insurance policy with a low deductible is likely to be beneficial to you if you are an older person, if you are not in good health, if you have a chronic condition. If you are planning to start a family, or if you simply make frequent use of your health benefits.
If you have costly health issues, purchasing a LDHP could save you money over the course of the year. Even with the higher premiums. If you switched to a HDHP, the amount you would save in premiums would be a much smaller fraction of the total amount you would pay in deductibles with your HDHP. And, frankly, many individuals find that it is simpler to pay a slightly higher amount on a monthly basis as opposed to a much larger sum all at once. Getting a low deductible health insurance plan might be the best choice for you if you don’t want to deal with the stress of potentially expensive medical care.
How to Choose
It is difficult to make a direct recommendation for a plan without knowing your unique financial situation and your health status. But we can offer the following advice to help you make a decision. Your best bet, though, is to speak to an EZ agent. Who can take your specific circumstances into account and find the best plan for you.
1.Look for discounts
You might be eligible for assistance with your monthly premiums or cost-sharing expenses, depending on your income. So, before you write off a type of plan as too expensive. Ask an EZ agent if you qualify for subsidies or tax rebates.
2.Narrow down your choices
Think about the maximum amount of money you are willing to spend each month on your premium and go from there.
3.Look at additional features
When it comes to shopping for health insurance, deductibles are just one of many factors to take into account. Consideration should also be given to the size of the plan’s network, out-of-pocket maximums, and the structure of the plan. As well as the types of costs that are covered. After you have made a comparison of your expected medical costs for the year with the coverage options available to you. Look more closely at the plans you are considering. Ensuring that they provide the appropriate type of coverage for the amount of money you anticipate spending on healthcare.
4.Set your priorities
Your choice between a high deductible plan and a low deductible plan may come down to what you value more. The ability to save money on premiums if you are fortunate enough to not have many medical expenses. Or the peace of mind that comes from knowing that you won’t have to pay a deductible if you do end up needing more medical care. Doing some number crunching before making your decision might make things simpler for you.
Let EZ Help You
Do you need assistance comparing different plans and choosing the one that is best for your budget and healthcare needs? EZ.Insure is here to help! We will connect you with one of our dedicated, highly trained agents. Who will discuss all of your options with you and assist you in selecting the insurance policy that meets your needs, all at no cost to you. That’s right, there are no hidden fees associated with any of our services. EZ.Insure makes the entire process simple, easy, and quick. To get started, simply enter your zip code in the bar below. Or you can speak to an agent by calling 877-670-3557.
Health insurance can seem like a big expense, but the cost of a plan is nothing compared to the cost of a significant medical issue. That means it’s important to have at least some sort of coverage – but what if you’re struggling to find a plan that you can afford?
In this case, you might want to look into catastrophic health insurance plans, which are designed to provide basic coverage for “just in case” scenarios, and which have affordable premiums. It’s important to note that these plans are not available to everyone, though. In order to purchase a catastrophic health plan, you must be under the age of 30 or meet the requirements for a “hardship” exemption.
Catastrophic plans are really only designed as last resort coverage, but they are a good option if you can’t afford another type of plan, because they will help you avoid a scenario in which you’re hit with a medical bill for thousands of dollars. The monthly premiums for these plans tend to be relatively low, but you will typically be required to pay for all of your healthcare expenses out-of-pocket until you reach the plan’s high annual deductible, which is typically at least a couple of thousand dollars.
Below is an explanation of how catastrophic coverage works, along with its benefits and associated costs, as well as a look at whether this type of plan might be right for you. Once you’ve read through the following, contact an EZ agent with any questions you might have, and to get quotes on the right plan for you.
What Do Catastrophic Health Plans Cover?
Catastrophic plans are like a financial safety net in case you end up incurring large medical bills that would be impossible to pay on your own. They also include coverage for the same preventive care benefits that all ACA-compliant plans offer. This includes coverage for the ACA’s 10 essential health benefits:
Ambulatory patient services
Emergency services
Hospitalization
Laboratory services
Mental health and substance use services
Pregnancy, maternity, and newborn care
Prescription medications
Preventative and wellness services and chronic disease management
Pediatric services
Rehabilitative and habilitative services
WIth a catastrophic plan, you will get most preventive care and up to three doctor visits a year fully covered. You will pay for most other covered services, like lab work and minor surgeries, out-of-pocket until you meet your plan’s high annual deductible. Once you meet your deductible, your catastrophic plan will pay for the rest of your essential health benefits for the rest of the year.
A catastrophic health plan has a deductible that is so high that most people don’t meet it in a given year. These plan’s deductibles are the same as the federally mandated out-of-pocket maximums for healthcare plans, which for 2023 is $9,100.
The good thing is, though, with a catastrophic health plan, as with all health insurance plans, the amount you pay out-of-pocket for medical services will actually be less than if you didn’t have an insurance plan. This is because insurance companies typically negotiate reduced rates with healthcare providers. So, it’s always better to have a plan – even one with a high deductible – than no plan at all.
What Isn’t Covered?
Because catastrophic plans have such high deductibles, they will most not likely not end up covering smaller medical expenses. Costs associated with medical services like treating a broken bone or minor illness, or seeing a specialist, will probably not meet your deductible, so your catastrophic plan will not begin covering your costs.
Who Are Catastrophic Plans For?
As mentioned above, these plans are only available to two categories of people. The first is young adults under 30 who don’t have other coverage options (such as through an employer or spouse). If you are in this category, you might consider getting one of these plans if you:
Are unlikely to need medical care throughout the year
Want to satisfy the legal requirements in your state for health insurance (if your state has a health insurance mandate) but don’t want to buy a more expensive plan
Want to have basic coverage in the event that something terrible does occur
Second, individuals 30 and over who qualify for what is known as “economic hardship,” and who don’t have access to healthcare through an employer or spouse, can also purchase catastrophic health plans. You may qualify for a hardship exemption if you:
Have experienced homelessness within the past three years
Were determined to be ineligible for Medicaid
Have experienced eviction
Have been the victim of domestic violence
Are filing for bankruptcy
If you believe that your current economic situation makes it difficult for you to pay for health insurance and are interested in a catastrophic plan, you’ll have to submit an application for a hardship exemption through the Health Insurance Marketplace.
It is important to keep in mind that even if your income puts you in a position to receive reduced healthcare costs, also known as a subsidy, you will not be able to put those savings toward a catastrophic health plan. This includes tax credits for premiums, as well as subsidies for cost-sharing. That means that no matter your income, your monthly premiums for your catastrophic insurance plan will remain the same.
The Cost
A catastrophic health plan is essentially the same thing as a high deductible health plan but with a different name, and with restrictions on who can purchase them, as already discussed. Because they have such high deductibles, they can be quite expensive if you have a number of health problems.
As of 2023, the annual deductible for individual catastrophic health plans is $9,100; for families, this doubles to $18,200. This means that you will most likely have to pay out-of-pocket for most smaller medical expenses, including lab work, minor surgery, or anything else other than preventive care.
The one good thing price-wise about these plans is that plans with high deductibles generally have relatively low premiums. So if you are healthy and don’t often see the doctor, the monthly cost might be worth it as coverage in case of an emergency, since a major medical event can be extremely expensive.
Pros of Catastrophic Health Plans
The following are some of the benefits of having a catastrophic health insurance plan:
In comparison to those of other types of health insurance, the monthly premiums are typically much more affordable.
Your coverage acts as a financial buffer, protecting you from the potentially catastrophic effects of a major illness or medical emergency.
If you are generally healthy and don’t require many medical services, you might find that your overall insurance and care costs are lower than they would be with either another plan or no plan at all.
Insurance companies typically negotiate lower rates for services with healthcare providers, so your out-of-pocket costs for care could be lower with a plan than they would be without one.
When determining whether or not a catastrophic plan is the best option for you, your current state of health is an important factor. If you are generally healthy, a catastrophic plan may be a good option. This is especially true if you have an emergency fund that can pay for any medical care you require up to the amount of your plan’s deductible.
Cons Of Catastrophic Health Plans
It’s important to note that catastrophic health insurance plans come with a number of significant drawbacks, including the following:
Because you will only be covered for preventative care, a limited number of visits to primary care providers, and the most expensive type of care, the benefits of your medical coverage will be severely limited.
Because your deductible will be very high, you will need to come up with a significant amount of money in the event that you require medical services, which can be a problem for a lot of people.
You will not be eligible for premium assistance through the Affordable Care Act (ACA).
You will not be able to open a health savings account (HSA), as you would be able to do with other qualified high-deductible health plans. With a health savings account (HSA), you can set aside money before it is taxed to use for medical expenses.
A catastrophic plan is not the best option for you if you are planning to have a baby or otherwise anticipate needing a significant amount of medical care during the course of the year.
Are Catastrophic Health Plans Worth It?
A catastrophic health insurance policy could be beneficial to have if you cannot obtain health insurance from another source. In this case, one of these plans will typically be the most cost-effective option, and it may be significantly less expensive than other available choices, such as COBRA coverage. A lot of people use this type of plan as a short-term solution for their emergency insurance needs.
It is most likely worthwhile to purchase a catastrophic insurance policy, since they have low premiums. Having one will protect you from incurring potentially bankrupting medical expenses in the event of an emergency or illness.
Working With EZ
If you find yourself in a bind, EZ.Insure is here to assist you. Our agents are incredibly knowledgeable. They can comb through all of the health insurance plans available in your area to find the right one for you. As quickly as possible and with no hassle to you. A personal agent will assist you in navigating the numerous coverage tiers and plan options available, and answer all of your questions. And the best part is that everything we do is totally free! To get your free quotes, simply enter your zip code into the space below. Or give us a call at 877-670-3557.
When it comes to health insurance, most people don’t even think about getting it until they need it. This is because most people are fixated on how expensive health insurance can be. Choosing to wait until you need it rather than getting it while you’re healthy and being prepared can have some serious consequences. What if you get into an accident and don’t have health insurance? If you need surgeries or medical care then you’re stuck footing a pretty massive bill entirely out of pocket. Large medical bills can even bankrupt you! This is just one of many reasons you need to get health insurance sooner rather than later. Below we’re going to look at all the benefits of being prepared for unexpected medical emergencies with health insurance.
Free Services
Let’s start simple, health insurance doesn’t just help you pay for medical bills. It also comes with free benefits built into your plan that help keep you healthy and can help prevent some of those medical emergencies. Typically, your health insurance plan will offer free services such as:
Annual physical exams
Routine blood work
Cancer screenings
Blood glucose tests
Vaccines
Blood pressure monitoring
Blood cholesterol monitoring
These services might seem unnecessary when you’re healthy, but if you’d like to stay that way they’re important. These free services help catch diseases and medical conditions before they’re critical (or fatal). The earlier you catch health complications the easier it is to get treated and back to normal. If you hold off on health insurance you could end up sick without care and unnecessarily have to suffer through symptoms when a quick trip to the doctor could have either prevented it or given you symptom relief immediately.
Health Insurance Saves You Money
Health insurance doesn’t just protect your health but it also actually protects your bank account. We know what you’re thinking, “How would it save me money when I’m paying so much money for a premium?”. By having an insurance plan you’ll actually have less out-of-pocket healthcare costs, since your plan will cover significant portions of your medical costs. Not to mention, staying healthy keeps your healthcare cheaper. Consider for a moment how much you would have to pay out of pocket for an unexpected medical emergency. Medical bills can easily cost hundreds to thousands of dollars.
Take a broken arm for example, a simple fracture that doesn’t need surgery can cost about $2,500 without insurance,but with surgery that fracture goes up to around $16,000. That’s a lot of money for just one medical emergency. Not to mention health insurance itself is actually cheaper to buy when you’re healthy because you’re not as much of a risk to insure.
Staying On Top Of Medical Conditions
Unfortunately, many Americans suffer from a disease like diabetes, hypertension, high cholesterol, COPD, or even cancer. Even the healthiest person can suddenly develop a disease, especially if it’s hereditary. You need healthcare in order to control or prevent them from getting worse. Some diseases if left untreated can also start to cause you to develop other illnesses or compromise your immune system, making it harder for you to fight off even the slightest illness like the common cold. Without health insurance, prescriptions, treatments, doctor visits, and hospital stays that are linked to a medical condition can cost tens of thousands of dollars. Your health insurance makes sure that you don’t go broke while trying to care for these health problems.
In addition, the Affordable Care Act requires Marketplace plans to cover pre-existing conditions. This means that even if you already have a diagnosis, you can’t be denied coverage or charged extra just because you have a condition. Since you’ll have access to all the care you need, your health insurance plan helps manage your care for any chronic illnesses you have.
Family Planning
If you plan to start a family, even if it’s not anytime soon, health insurance is a must. Having health insurance before starting a family gives you access to maternity appointments, vaccinations and hospitalizations you’ll need throughout yours or your spouse’s pregnancy. Medical costs linked to pregnancy can easily reach $10,000 and higher. Not to mention, it’s so much easier to simply add your newborn to your existing health plan. Your new baby will immediately have health insurance and you’ll never have to worry about pediatrician bills. Plus as children age they tend to need a lot of healthcare, they can get hurt or sick easily while their immune systems develop, especially once they hit school age. Trust us, flu season is no joke for kindergarteners, you don’t want to be caught without health insurance when it hits.
Protects You Between Jobs
If you get health insurance through your employer, then unexpectedly losing or having to leave your job can be difficult. When you stop working there, you lose all those health benefits as well. Nonetheless, it doesn’t have to be hard. If you lose your job you may actually qualify for a Special Enrollment Period, so you won’t have to wait for the annual Open Enrollment Period to enroll. This ensures you don’t have to go months without coverage.
Another option for small gaps in coverage are short-term health plans. Instead of enrolling in a year-long plan, short-term health plans give you access to health insurance for a few months to make sure you’re always covered, even if you only need it for a little while. They are inexpensive and provide all the essential health benefits during the policy. However, it’s important to note every state handles short term health plans differently. State’s have their own guidelines about how long you can have a short term health plan, and some state’s don’t even allow them to be sold. To learn more about how short term health plans work in your state check out our state by state health insurance guides here
Which Plan Is Best For You?
Let’s take a look at your options for health insurance plans. There are so many options you’re sure to find one that works for you and within your budget. With health insurance there are two main decisions you need to make, which plan type and which metal tier you want.
Plan Types
HMOs, PPOs, EPOs, and POS plans are your main types of health insurance. Don’t worry we’ll explain the alphabet soup below. The type of plan you select will determine what your out-of-pocket costs are as well as what your provider options are.
This type of health plan typically restricts your coverage to care from their in-network providers. It will only cover out-of-network care during an emergency. They also usually require you to live within their service area. Don’t worry too much about the service area, there’s plenty of companies to go around, no matter where you live you’ll find a plan. With an HMO you select a primary care provider (PCP) who will coordinate all of your care and provide referrals to specialists when you need them.
Just like HMOs, PPOs have a group of contracted doctors and providers that make up their network. However, with PPOs you do also get some coverage for out-of-network care as well. Although, seeing in-network providers saves you more money since your plan will cover more of these services. PPOs don’t require you to choose a PCP the way HMOs do and you don’t need referrals to see specialists. So, you’ll be in charge of coordinating all of your own care with this plan.
Exclusive Provider Organizations (EPOs)
EPOs also provide you with access to a network of participating providers, with the exception of emergency situations, the majority of EPO plans do not cover out-of-network care. You may or may not be required to choose a PCP, based on your plan. In either case, you do not need a referral from your PCP to see a specialist within the plan’s network.
Point-Of-Service (POS)
POS plans combine PPO and HMO characteristics. Similar to an HMO, the provider network for a POS plan is typically smaller than that of a PPO plan, and similar to a PPO plan, in-network care expenses are typically less expensive. In POS plans, you must choose a primary care physician (PCP) from the network of physicians and other primary care specialists. If you have a POS, you must obtain a referral to see a specialist. However, similar to PPO plans, you have the option of seeing either in-network or out-of-network specialists. However, if you visit an out-of-network provider, your portion of the costs will be higher, and you will be responsible for submitting claims.
Metal Tiers
Since The Affordable Care Act went into effect in 2010, traditional health insurance plans are generally purchased through the Marketplace. When you buy a plan through the Marketplace they are separated into 4 categories: Bronze, Silver, Gold, and Platinum. The plans in these tiers are categorized based on their price and how much of your health care you are responsible for vs. how much your health plan pays for.
Bronze
Bronze plans have the cheapest monthly premiums but the highest deductibles and out-of-pocket costs. With a Bronze plan your insurer covers 60% of your medical expenses and you’re responsible for the remaining 40%. Bronze plans are a good option if you don’t use medical services frequently but need a low-cost plan to protect yourself against severe illness and injury. Since the deductible and cost-sharing percentage are both relatively high, you’ll be responsible for the majority of your care.
Silver
Plans at the Silver tier have moderate monthly premiums and out-of-pocket costs. These plans cover 70% of your medical expenses, while you are responsible for the remaining 30%. These plans are an excellent option for those who are willing to pay a bit more to have more of their routine care covered.
Gold
Although Gold plans have high premiums, the out-of-pocket cost of care is lower than that of higher-tier plans. These plans have low deductibles, and your plan will cover 80% of your care while you pay 20%. If you require extensive medical care, a Gold plan may be a suitable option, as it will cover more of your expenses.
Platinum
The Platinum tier has the highest monthly premiums of all the tiers. However, despite the high premiums, your out-of-pocket expenses will be the lowest of any plan type, and your insurer will pay more of your expenses throughout the year due to the extremely low deductibles. Due to the fact that these plans cover 90% of your medical expenses, they can be a good deal for those in need of numerous medical services.
Get Insured Today With EZ
Although health insurance may appear expensive, it is important to evaluate a plan’s value and how much you will save over time. When comparing the overall cost of health insurance versus the cost of a medical emergency without coverage, it pays to have protection. In the event of a medical emergency, the last thing you want to worry about is finances. Knowing that your loved ones are protected and can seek care, rather than attempting to “ride it out” due to lack of insurance, is priceless. Speaking of priceless, EZ.Insure can help you compare every plan available to you and make sure you stay within your budget, and we do it all for free! To start, simply enter your zip code into the bar below to get your free instant quotes or give one of our licensed agents a call at 877-670-3557.
Health insurance can be confusing. With all the terms like deductibles, premiums, copayments, and coinsurance, some of which people often mistake for each. Those last two – copayments (or copays) and coinsurance – can be particularly problematic when it comes to confusion. Not only that, but many people are not sure when they will be required to pay them, or how they add to their out-of-pocket costs. But simply being aware of the difference between the two, and knowing how they work in your plan, can save time and energy. As well as money that would otherwise be wasted.
What Are Copays?
A copay is a predetermined amount of money you must pay when you use a medical service at the point of service. Health insurance policies typically specify copayment amounts in advance, and the amount will be different for each type of service. Examples of services that might require copayments include visits to your primary care physician, appointments with a specialist, prescriptions drugs, and emergency room visits. You might, for instance, have to pay $20 each time you see your primary care physician.
After you pay your copayment for a covered service, the insurance company will often pay for the rest. Especially for preventive care. For example, your annual check-up is a service your plan covers. So, you will only be responsible for your copay in this case. You should always check your plan’s benefits summary for specifics. But in general, copays are not included in the calculation of your maximum out-of-pocket costs.
What Is Coinsurance?
Most health insurance plans require that you pay coinsurance, or a percentage of the cost of care. With most plans, you’ll first have to meet your annual deductible. Then your insurance company will begin to cover your care, but you will have to split the cost. Your coinsurance share will depend on your plan, but you might have to pay 20% of each bill, for example.
In addition, the coinsurance percentage you’ll have to pay may vary depending on the type of medical treatment you receive. For example, you might have to pay a different amount of coinsurance for things like office visits, tests, and medications.
And, if you have a preferred provider organization (PPO) plan, you’ll most likely have to pay different amounts of coinsurance. Depending on whether or not the healthcare provider you see is in your plan’s network. For example, coinsurance for a primary care physician in your network could be 20%, while coinsurance for a primary care physician outside of your network could be 75%. That means you can lower your out-of-pocket expenses by trying to get care from in-network providers whenever possible.
How Much Should You Expect to Pay in Coinsurance?
You won’t know exactly how much you’ll end up paying in coinsurance each year, but you can estimate your out-of-pocket costs by thinking about how much care you anticipate needing. The coinsurance you pay on that care will be a chunk of your out-of-pocket expenses, in addition to your monthly premium and your annual deductible.
Your share of your medical costs will be determined by the type of plan you choose. You can choose from Bronze, Silver, Gold, or Platinum plans, each of which will require that you pay a different percentage of your medical costs:
Bronze – 40/60, You pay 40% while your insurer pays the remaining 60%
Silver – 30/70, 30% is your responsibility while your insurer pays 70%
Gold – 20/80, you pay 20% and your insurer covers 80%
Platinum – 10/90, your insurer pays 90% while you cover only 10%
How Copayments and Copays Work
As pointed out above, a copay is a predetermined amount that you have to pay for a covered service at the point of service, but coinsurance is the percentage of the total bill that you are responsible for. Both are some of the out-of-pocket costs of health insurance, but they function very differently. The difference between a copay and coinsurance can be broken down as follows:
Copayments are a set price you pay for services. You are responsible for the copays before and after you’ve met your deductible
Coinsurance is a percentage of your medical bills you have. Coinsurance is only charged after you’ve met your deductible for the year.
What this means is that a $20 copay will always be $20. But your 20% coinsurance fee will vary with the price of the service. And these costs, as always, will vary depending on the plan you choose. In general, though, your copayments and coinsurance will be lower if you choose a plan with higher premiums.
Copay and Coinsurance Example
To make things a little clearer, here’s a further example of how copays and coinsurance work: Let’s say your health insurance plan has a $3,000 deductible, $50 copays for specialists, 80/20 coinsurance, and a $6,000 out-of-pocket maximum on an individual plan (and you have no dependents covered by your plan). This $6,000 maximum means that once you pay that amount in covered medical expenses in a given year, your insurance company will begin to cover everything, and you will no longer have to pay coinsurance.
Now let’s say you go in for your free annual checkup (a preventative service) and bring up the fact that your shoulder has been bothering you lately. Your primary care physician refers you to an orthopedic surgeon for further evaluation. When you see this specialist, you will pay your $50 copay at the point of service.
The consulted specialist suggests an MRI to evaluate your shoulder pain. The price of the MRI is $1,500, and since you haven’t met your deductible for the year, you will have to pay the whole bill for this test. The MRI finds that you have torn your rotator cuff and will require surgery to repair it. The price tag for this operation is $7,000. After spending $1,500 on the MRI, you will have to pay $1,500 more in order to meet your $3,000 deductible before your insurance will cover any of the surgical costs. That leaves $5,500 to pay for the surgery, and since you have an 80/20 plan, your 20% coinsurance payment would be $1,100.
With meeting your deductible and paying your coinsurance and copayment, the total cost of repairing your torn rotator cuff would be $4,150. But remember, in this scenario, your plan has a $6,000 out-of-pocket maximum, which you would be close to meeting after this surgery.
What Should You Look for in a Plan?
Since everyone’s financial situations and requirements for health insurance vary, there is no one plan that will work for everyone. But when shopping for a plan, there are some considerations that can help narrow down your options.
For example, if you’re looking at a plan with lower monthly premiums, you’re most likely going to have a higher coinsurance percentage. Take two health care plans with different monthly premiums of $200 and $450 as an illustration. These two plans may have 30% and 20% coinsurance for ER visits, respectively. So, when looking at plans with lower premiums, you should always consider that your out-of-pocket expenses, including your coinsurance payments, might be higher.
And when it comes to the copayments included in the plans that you are looking at, keep in mind that copayments are typically not applied toward meeting deductibles. You should look into plans with lower copays if you anticipate spending a lot of money on prescription drugs. Or making multiple trips to the doctor each year.
In-Network vs Out-Of-Network
As mentioned above, some plans have different deductibles, copayments, and maximum out-of-pocket expenses if you see an in-network healthcare provider than if you see out-of-network providers. This is because doctors and hospitals that are part of your plan’s network have agreed to provide you with care at reduced costs.
These reduced costs mean that it’s important to seek care from a provider who is part of your insurance’s network if at all possible. And when looking at plans, make sure your preferred doctors and hospitals are included in the plan’s network. If you find that you are frequently seeing out-of-network providers with the plan you have. You might want to make a change to your plan during the next Open Enrollment Period. Speak to an EZ agent about your options.
FAQs
Does coinsurance apply before I meet my deductible?
No, it doesn’t. If you have a 20% coinsurance, they will only begin to cover their 80% after you’ve met your deductible.
Do all health insurance plans have copays and coinsurance?
No. You may not be required to pay a copayment for certain medical services with some plans. These plans, however, typically have higher monthly premiums. And there are also catastrophic health plans, for example, with very high deductibles and no coinsurance at all.
Are copays and coinsurance tax deductible?
If your out-of-pocket medical expenses exceed 7.5% of your AGI, you may be able to claim a tax deduction for all of your medical expenses. Including your copays and coinsurance. The excess of your healthcare costs over 7.5% of your adjusted gross income is tax deductible.
Do copayments and coinsurance count toward out-of-pocket maximums?
Your out-of-pocket maximum includes not only your deductible, but also any copays or coinsurance payments you may have made. Your regular premium payments don’t count toward your maximum.
Is it better to have a higher or lower coinsurance percentage included in your plan?
A lower coinsurance percentage means you’ll have to pay less out-of-pocket for covered medical services. But if you have a lower coinsurance percentage, you might have a higher deductible and premiums.
Conclusion
When you are searching for a health insurance plan, the plan descriptions will always include the premiums (the amount you pay on a monthly basis to maintain the plan), deductibles, copays, coinsurance, and out-of-pocket maximums. Pay close attention to all of these costs, not just the plan’s premiums. So you can get a feel for the true amount you’ll be paying for your healthcare.
If you are generally healthy, a cheaper plan that has higher deductibles could work for you. However, if you expect to have significant healthcare costs, it may be worth it to pay higher monthly premiums for a plan that will cover more of those costs.
EZ Can Help
If you need help finding the right plan for you, EZ.Insure is here to help. We can quickly evaluate all of the health insurance plans in your area. Your personal agent will help you sort through the various plans available to you. And explain all of the costs that come with each one. And the best part is that all of our services are completely free! To get your free quotes, simply enter your zip code in the box below, or give us a call at 877-670-3557.
