Health Insurance 101: Everything You Need To Know To Understand How It Works

Health insurance is an essential coverage that helps to protect you and your family financially by helping you pay for medical and health care expenses. My name is Dr. Andrew Schneider and I'm a podiatrist in Houston, Texas. Health insurance can include coverage for preventative care such as annual physicals, vaccines and checkups, treatments for existing illnesses or injuries, hospitalization, and emergency care if needed. It also covers prescription drugs. In today's video, I'm going to discuss what you need to know to best understand your health insurance coverage. Before I do, let others know about these videos. Please like, comment, hit the subscribe button, and share on social media. This will help others find this information. Generally, health insurance is a contract between you and an insurance company that That you will pay premiums in exchange for coverage of your medical costs. You typically pay a monthly or yearly premium to the health insurance company, which then agrees to cover your risk of monetary losses in case of a covered accident, injury, or illness. There are several types of health insurance plans available, including PPO's preferred provider organization, HMO's health maintenance organizations, high deductible health plans with health savings accounts, HSAs, and point of service plans, POS plans. They also have exclusive provider organizations, EPOs. Each have their benefits and issues. For instance, a PPO allows you greater flexibility in the doctors you can see, but carries a higher premium, copay, and deductible. An HMO is more restrictive and requires you to access specialists through your primary care doctor who serves as a gatekeeper. Typically, HMOs have lower premiums. They have lower deductibles and copays. You need to select the right type of insurance for your unique circumstances. Anyone can purchase private health insurance through their employer's benefit program or on the open market as an individual consumer. Those who are unable to purchase coverage through employers or the marketplace due to income restrictions may qualify for public programs such as Medicaid or CHIP, children's health insurance program. Let's talk about the important pieces of health insurance. First is the insurance premium. The health insurance premium is the amount of money that you pay to your health insurance company on a regular basis in exchange for coverage. This payment is usually made monthly or annually and can vary depending on the type of plan you've chosen. The premium helps to cover the cost of medical care, treatment, hospitalization, and other services covered by your health insurance policy. It's important to note that just because you pay your premium, it does not mean you're covered 100% for healthcare. There are other payments that will be required as you seek care for your healthcare needs. A health insurance deductible is the amount of money that you must pay out of pocket before your health insurance company will start to cover the cost of your medical care. This means if you have a $1,000 deductible, you must pay the first $1,000 in medical costs. Before your health insurance company will start to cover the remaining costs. The purpose of having a deductible is to help keep premiums lower by having individuals pay for some of their own health care expenses. Paying a deductible can also help encourage people to be more mindful about their health care decisions and make sure they're getting the necessary treatments and services. In some cases, the deductible is only applied to tests and procedures. If you go in for an office visit, you'll need to pay your copay, but the rest of the visit would be covered. In other cases, the deductible applies to office visits too, and you'll be responsible for paying everything until you reach your deductible. This is determined by the insurance plan you choose. A health insurance copay is a fixed amount of money that you must pay for each doctor's visit. The payment is usually due at the time of service and is in addition to any deductible or premium payments that you have already made. Copays used to be $10, but now we're seeing copays as high as $75 or more. Generally speaking, the higher the copay amount, the lower the premium. In most plans, once you hit your deductible, there's more comprehensive coverage from the health insurance company. In most cases, however, you're still going to pay 10% to 20% of the total amount. This is usually in the form of a co-payment or co-insurance. Co-payments still need to be paid at every visit, even after you met your deductible. In most cases, individuals will still need to pay 10 to 20 percent of their costs even after you met your deductible. This is called co-insurance. Do the payments ever end? Yes. That happens when you meet your maximum out-of-pocket. The health insurance maximum out-of-pocket is the total amount of money that you're responsible for paying for your health care costs in a given year. Once you reach this limit, your health insurance company will cover all remaining costs for the remainder of the year. That means you will not have to pay any additional co-pays or co-insurance payments and will be able to receive care without the additional financial burden. This limit can vary depending on the type of plan you've chosen, but is typically set at an amount that it's affordable for most people. So, let's talk strategy. If you know you're going to need an elective or routine procedure, such as a colonoscopy, try to schedule it at the beginning of the year. This will make sure you've met your deductible and are close to reaching your maximum out-of-pocket. This way, you can take advantage of the comprehensive coverage from your health insurance company once you hit your deductible. This will allow you to have the majority of the year with full coverage. In my practice, I see people hitting their deductible in December, which leaves no time to schedule other visits or procedures before the deductible resets on January 1st. January 1st is accurate for most plans. They typically run in a calendar year. Some employer-sponsored health insurance has a different cycle and the deductible turns over at a different date. It's important to know when that date is. Other than that, the same strategy applies. Try to schedule the known expenses and visits in the early part of the insurance year. Thanks for taking the time to watch this video. Please take a moment to like, comment, and share on social media. Be sure to hit subscribe so you won't miss another video. I hope this video was helpful in explaining the different components of health insurance. If you have any questions, our team is always available to help answer them. Or you can always ask when you're in the office for an appointment. The link to request an appointment is in the description. Thanks so much for watching and have a great day.