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Beginner’s Guide to Health Insurance

April 14, 2017 9:20 pm


How much money do you have in savings right now? If your answer was less than $10,000 then you’d be in big trouble if you or a family member broke a bone tomorrow…

According to, surgical treatment for a broken arm typically costs $16,000 or more. If you don’t have health insurance then 100 percent of that cost would be billed to you personally, meaning you’d have to take out a hefty loan or risk going into deep debt due to an unavoidable injury. To put this into perspective, a Harvard study concluded that 62 percent of all personal bankruptcies in the U.S. in 2007 were caused by health problems.

Although an estimated 20 million people have gained coverage through the health care reform, 29 million Americans still live their daily lives without health insurance. While finding affordable health care can prove difficult, having even a minimal coverage policy is better than having nothing at all when a visit to the ER can range from $985 to $2,696.

Even if you’re young, fit and healthy, injuries and illnesses are unpredictable and you could need medical attention when you least expect it. Rather than paying high ER costs as a last resort, shop around for a health insurance quote that is in line with your lifestyle and works with your finances.


We’ve teamed up with Certified Credit Union Financial Counselor (CCUFC)  Karen Smith. She has compiled a few helpful tips for you to get started on your search for the right health insurance policy.

Who needs health insurance?

Everyone! Your health and wellbeing is important, no matter your age or circumstance.

The Affordable Care Act mandates that most Americans purchase health insurance, although some people – especially those who are young or healthy – are questioning why they need coverage at all.

Like other insurance, you are paying for something you hope you will never need. It is there for the unplanned, unexpected situations that come up in people’s lives. Although most consumers want and value health insurance, many still can’t afford the coverage.  Consider this, without coverage:

  • You may need to pay a penalty
  • You risk financial ruin
  • You won’t have access to preventative care and primary care
  • You may have trouble getting follow-up care
  • You may miss out on options to offset coverage costs
  • You may need to wait to get coverage

Things to take into account when searching for a health insurance policy

Call or visit multiple insurance companies and figure out who you feel comfortable with. Speak to an agent about your needs and how their offerings match up, then get quotes from each company before deciding. Choosing an insurance company is as important as your choice in hairdresser or mechanic. They must be someone you trust and a company you are happy to revisit as your life and insurance needs change.

There is no ‘one size fits all’ policy. The offerings can be tailored to you, so if you can only afford a small deductible, or take an ongoing medication then your agent can work with you to find a suitable policy.

You do not need to pay an insurance agent for a consultation and their fees, should you decide to go with them, are paid through your policy so there will be no extra costs for you.

Although agents will earn a commission on some products, you are not obligated to purchase everything they offer you and you are entitled to ask whether a certain product or add-on is sold on a commission basis.

Types of health coverage

There are different types of Marketplace health insurance plans designed to meet different needs. Some types of plans restrict your provider choices or encourage you to get care from the plan’s network of doctors, hospitals, pharmacies, and other medical service providers. Others pay a greater share of costs for providers outside the plan’s network.

  • Health Maintenance Organizations (HMO) plans: With this plan, an entire network of health care providers agrees to offer you its services. You typically have to select a primary care provider (PCP) who coordinates all of your health services and care. HMOs usually offer coverage for most types of preventive care, including specialist visits, but specialist visits are only covered when your PCP makes a referral.
  • Preferred Provider Organization (PPO) Plans: Under a PPO plan, both you and your family can see any health care provider in the insurance company’s network, including specialists, without a referral. In most cases, you are not required to choose a primary care physician or to get referrals to see specialists. You will typically have copayments for any non-preventive medical care you receive, and you may have an annual deductible.
  • Exclusive Provider Organization (EPO) Plans: With an EPO plan, you have access to all of the health care providers within the EPO network, including specialists. Whereas PPO plans may offer you some coverage outside of your network, EPO plans typically will not (except for emergencies).
  • Point of Service (POS) Plans: POS plans are a hybrid of HMOs and PPOs. With a POS plan you will typically have to designate a primary care physician for regular check-ups and referrals. But you can also use out-of-network providers if you’re willing to pay more out of pocket; you’ll usually have a copayment and deductible as well. This type of plan is versatile, and can be right for people who are willing to pay a bit more for extra flexibility.
  • HDHP Plan: High-deductible plans cross categories. Some are PPO plans while others may be EPO or HMO plans. This type of health insurance has a high deductible that you have to meet before your health insurance coverage takes effect.

Can you be denied for a pre-existing condition?

Health insurers can no longer charge more or deny coverage to you or your child because of a pre-existing health condition like asthma, diabetes, or cancer. They cannot limit benefits for that condition either. Once you have insurance, they can’t refuse to cover treatment for your pre-existing condition.

How much of my medical expenses will health insurance pay?

Your premium + your deductible + any coinsurance you must pay (up to your out-of-pocket maximum) + any copayments = the most you will pay for healthcare each year (for covered services).

Once you reach the out-of-pocket maximum, insurance pays for 100 percent of your medical care (for covered services). How you reach that out-of-pocket maximum is based on how much you pay for your medical care up front, which depends on your deductible and coinsurance percentage.  The higher your deductible, the lower your monthly premiums will be because you are willing to pay for some of your care up front.

It is important to understand that premiums are costs that you pay regardless of whether you use medical services. Deductibles only become expenses once they are incurred.


Here are six basic questions to ask your insurance agent before buying or renewing a homeowners insurance policy:

  • How does this policy fit my individual needs?
  • What does the policy cover?
  • What is my deductible?
  • Does my current primary care physician participate?
  • Can my family be included on the plan?
  • Will I be denied for a pre-existing condition?
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