Health insurance is one of the most crucial financial products that can protect both you and your family against unexpected medical costs, yet many individuals harbor misconceptions about its operation, coverage, and costs often leading to confusion, frustration, and disappointment when you need medical treatment most urgently.
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In this blog post, we’ll dispel some of the most widespread myths and misconceptions about health insurance in America and provide accurate and trustworthy information that will allow you to make more informed choices when selecting health coverage options. We will also offer some tips for how you can avoid falling for these myths while selecting an optimal plan to meet both your needs and budget requirements.
Myth 1: I don’t need health insurance because I’m young and healthy
It is one of the most pernicious myths affecting both your health and finances as everyone, no matter their age or health status can get sick or injured and require healthcare services yet many do not realize the value in investing in health insurance as this helps cover unexpected medical bills that quickly pile up to create financial strain.
According to research by the Kaiser Family Foundation, one-quarter of Americans reported difficulty paying their medical bills within the past year and more than half had exhausted most or all of their savings on health care costs medical debt is the leading cause of personal bankruptcy in America.
Even when healthy and young, we never know when health services might become necessary, including preventive care, prescription drugs, emergency room visits, hospitalization, surgery, or rehabilitation. Without health insurance, you could end up paying out-of-pocket or turning to charity programs which might not cover all your needs.
Decide upon and invest in an ideal health insurance plan tailored specifically to your needs and budget, whether that means consulting healthCare.gov or going through an agent or broker. Furthermore, subsidies or tax credits could lower premiums or out-of-pocket expenses further.
Myth 2: I can only get health insurance during the open enrollment period
This myth may be partially accurate the open enrollment period refers to when individuals can enroll in health plans through either the Health Insurance Marketplace or through their employer if available its 2023 open enrollment period runs from November 1, 2022, to December 15, 2023.
However, you may be able to enroll in a health insurance plan outside the open enrollment period if you experience a qualifying life event that changes your eligibility or coverage needs. Some examples of qualifying life events are:
- Getting married or divorced
- Having a baby or adopting a child
- Losing your job or changing your income
- Moving to a new state or zip code
- Becoming a U.S. citizen or gaining lawful immigration status
- Losing your existing health coverage due to expiration, termination, or cancellation
If a qualifying life event happens to you, you will have 60 days from its occurrence to either sign up for or change an existing health plan known as a special enrollment period by providing evidence of it when applying. When making this application you will also need to present proof of what led up to it.
If you miss the open enrollment period and do not have a qualifying life event, you may still be able to get health insurance through other sources such as:
Medicaid: Medicaid is a public program offering health coverage at no or low cost for low-income people, pregnant women, children, senior citizens, and people living with disabilities. Eligibility varies by state. You can apply at any point throughout the year through your state Medicaid agency.
Children’s Health Insurance Program (CHIP): CHIP (Child Health Insurance Plan) is another public program offering free or low-cost health coverage to children under 19 who do not qualify for Medicaid but cannot afford private health plans. Eligibility requirements differ according to each state you can submit an application any time during the year through your state CHIP agency.
Short-term health plans: Short-term health plans (STHPs) provide short-term coverage lasting for 12 months (or longer in certain states). They tend to be cheaper than their full coverage counterparts but offer limited benefits, not covering preexisting conditions, essential health services like preventive care or mental health treatment, prescription drugs, or subsidies from the Affordable Care Act or tax credits. You can purchase STHPs throughout the year through an agent, broker, or online marketplace.
Health sharing ministries: Health sharing ministries are religious organizations that offer an alternative way of sharing medical expenses among their members. Although not insurance policies, health-sharing ministries do provide members with an avenue for spreading medical expenses among themselves if needed and may qualify for subsidies and tax credits under ACA rules and regulations. You may join one anytime during the year if their beliefs and practices align with yours.
Myth 3: All health insurance plans are the same
This myth is far from the truth. Health insurance plans vary widely in terms of benefits, costs, networks, and quality. You should not assume that all plans offer the same coverage or that the cheapest plan is the best option for you.
Some of the factors that you should consider when comparing health insurance plans are:
Benefits: Your plan covers many health services and items that could include doctor visits, hospital stays, prescription drugs, preventive care services such as preventive visits for mental illness or dental/vision issues as well as dental/vision care coverage. Be sure to review each plan’s summary of benefits and coverage (SBC) document to understand what’s included or limited also take note of what essential health benefits (EHB) the Affordable Care Act mandates that many plans must include as required coverage under EHB requirements.
Costs: The amount of money that you have to pay for your health insurance plan and for your health care services. The main costs that you should be aware of are:
1. Premium: Your health plan premium is the monthly fee charged when enrolling in one. Your premium could differ depending on factors like your age, location, income level, family size, and tobacco use as well as plan type. Furthermore, purchasing plans through the Health Insurance Marketplace could enable you to qualify for subsidies or tax credits to lower premium costs.
2. Deductible: Your health plan requires you to pay out-of-pocket for health care services covered under its plan before it will pay its share of payments for example, if the deductible for all covered health services is $1,000 then before any payments from them begin, that amount must come out of your own pocket first before their share begins being distributed some plans may even offer separate deductibles depending on which services or providers they cover.
3. Copayment: Copayments are fixed amounts that you are expected to pay when receiving health care services that fall under Medicare coverage, for instance, doctor visits require you to pay $20 when visiting. Copayment amounts may differ depending on your particular service provider or plan type and may change every time you see someone for an appointment.
4. Coinsurance: Coinsurance (or co-pay), after meeting your deductible, refers to a percentage of a healthcare service cost you must cover after satisfying it; for instance if it applies to hospital stays (20% in this instance). Co-insurance amounts vary based on provider types or services rendered – please check before selecting or paying a hospital stay plan provider or service.
5. Out-of-pocket maximum: Your out-of-pocket maximum is the annual cap you have to spend for covered healthcare services; once this limit has been reached, your plan pays 100% of its costs in subsequent years. Your plan’s out-of-pocket maximum may include deductibles, copayments, and coinsurance – not premiums or non-covered services.
Networks: Groups of doctors, hospitals, pharmacies, and other healthcare providers who have contracts with your health plan to offer discounted services at discounted rates. It’s advisable to refer to the provider directory of each plan to see which providers fall into either of those two categories and which do not. You could pay extra or receive no coverage altogether by opting for out-of-network providers.
Quality: Quality rating systems evaluate how health plans provide care and services to their members. You should review each health plan’s quality ratings to assess its performance on various indicators like customer service satisfaction, preventive healthcare provision, and chronic condition management, among others.
Myth 4: I can’t afford health insurance
This myth often stems from an assumption that health insurance is too costly and unattainable for most. While this might be true in general terms, there are ways you and your family can make health coverage more cost-effective and accessible than ever.
Some of the options that you can explore are:
Subsidies or tax credits: These plans may help lower monthly premiums or out-of-pocket expenses if purchased through the Health Insurance Marketplace and meet specific income criteria. You could even claim tax credits when filing your federal income tax return if eligible.
Medicaid or CHIP: Tax credits may help lower monthly premiums or out-of-pocket expenses when purchasing health plans through the Health Insurance Marketplace and meeting certain income criteria. You could claim one on your federal income tax return as well if eligible. Medicaid/CHIIP programs provide free or low-cost health coverage to low-income people, pregnant women, children, seniors, and those living with disabilities in each state based on eligibility and benefits offered you can apply at any point during the year through your state agency for Medicaid/CHIP coverage.
Employer-sponsored health plans: Employer-sponsored health plans (ESHPs) may be provided as part of your compensation package by either yourself, your spouse’s employer, or both employers, typically offering lower premiums and better benefits than individual plans. You can enroll during open enrollment periods when starting a new job or experiencing qualifying life events.
Family or group health plans: Family or group health plans provide coverage to multiple members in a family unit for instance, your spouse, children, parents, siblings, or any other close relatives. Their premiums tend to be less and their benefits more extensive compared to individual plans; you can enroll through either the Health Insurance Marketplace, your employer, or even directly with private insurers.
High-deductible health plans (HDHPs) with health savings accounts (HSAs): Health savings accounts (HSAs) offer health plans with lower premiums but higher deductibles compared to standard plans, designed to cover major medical expenses while helping you to save for future costs in tax-advantaged accounts like an HSA. You can use funds stored within an HSA to pay qualified expenses like deductibles, copayments, coinsurance premiums prescription drugs dental care vision care, etc.
Myth 5: I can’t change my health insurance plan once I enroll
This myth stems from the belief that your health insurance plan must remain static throughout its term you have no ability to switch or cancel it until the open enrollment period opens back up again. While this may sometimes be the case, in other cases there may be opportunities to change or terminate it earlier than scheduled.
Some of the scenarios where you can change your health insurance plan are:
• As soon as a qualifying life event changes your eligibility or coverage needs such as marriage or divorce, having a baby, adopting one, losing your job or shifting income sources, moving states or zip codes, becoming U.S. Citizens or lawful immigration status holders, expiration, termination, cancellation of existing health plan coverage, etc then 60 days must pass from when this happened before enrolling into new health plans or changing current ones during a special enrollment period.
• If you enroll in a health plan through the Health Insurance Marketplace and later discover that you qualify for different subsidies or tax credits than originally provided due to changes in income, family size, or tax filing status healthcare.gov offers tools that make updating information simple so you can see if different plans or lower premiums might be eligible to you.
• Are You Enrolled in an Employer-Provided Health Plan and Your Plan Is Changed or Canceled Contributions Stop Contributing? There may be options to switch plans available through Your employer as well as through Health Insurance Marketplace and Private Insurers.
• If your health plan with a private insurer changes or discontinues, or raises premiums significantly, either accept the changes or seek alternative plans through the Health Insurance Marketplace or another private insurer.
Some of the scenarios where you can cancel your health insurance plan are:
• If your needs for health coverage have changed due to becoming eligible for Medicare, Medicaid, CHIP, Tricare or VA benefits then at any point your plan can be canceled simply by notifying either your insurer or the Health Insurance Marketplace.
• If you want to cancel your health plan because it no longer suits your budget or no longer makes sense for any reason, contact either your insurer or the Health Insurance Marketplace and cancel immediately. However, be mindful of any repercussions such as medical debt accumulation, tax penalties (if applicable), and possible risks to both health and well-being that come from not having health coverage.
Conclusion
Health insurance can be an overwhelming and complex subject that often generates multiple myths and misconceptions among consumers. By conducting your own research and gathering accurate, reliable information you can sidestep these fallacies and make smart choices about your coverage based on current conditions and costs. A licensed agent or broker may be helpful as you compare plans and prices until you find what suits your family best.
We hope that this blog post has helped you to understand some of the common myths and misconceptions about health insurance and how to avoid them. If you have any questions or comments, please feel free to leave them below. Thank you for reading!