Good health is something that we all take for granted – it is only when we fall sick that we understand the importance of being healthy at all times. When a person’s health takes a turn for the worse, this troubles them not only physically, but also financially. And this is where the importance of health insurance kicks in. It essentially provides a security net when someone requires high-dollar medical treatment.
Before deep-diving into the various aspects of medical insurance, let us understand a few terminologies that are commonly used:
- Out-of-pocket: The actual amount an insured must pay for medical care that isn’t covered by insurance. Examples include co-pays, deductibles, non-covered medical care, etc.
- Premium: The month-by-month cost for health insurance.
- Deductible: The amount of money paid out of pocket by the insured before an insurance provider will start to pay any expenses.
- Co-pay/Co-insurance: These are the costs the insured must pay after meeting the deductible. While a co-payment is a set dollar amount, a co-insurance is usually a percentage amount of the total medical cost.
- Subsidy: The amount of money paid by the federal government to help specific individuals pay for premiums, also known as “premium tax credit”.
- Explanation of Benefits (EOB): A complete breakdown of all the costs of the medical services, the covered amount, adjustments, and the out of pocket cost, sent by the insurance company to the insured.
Choosing a health insurance provider can be quite troublesome, especially for a student. Here is a list of the common ones that are out there.
- Parent’s Insurance
It is the health insurance that is owned by parents and covers dependents. Students can remain on this until the age of 26.
Pros: Even after turning 18, getting a job, moving out or getting married, students can remain on their parents’ plan. The cost is also usually cheaper than the child getting his/her own plan. If money is an issue, benefits like deductibles and premiums can be modified to the insured’s favour, during open enrolment.
Cons: Loss of coverage by the parent means the same for the child. Also, if the child moves far away from attending school, in-network medical care might be challenging to receive, which means the child can see a doctor only at home during vacations.
- Student Health Insurance Plan
It is the health insurance offered by the school to the students.
Pros: Enrolment is automatic in most cases. Students can visit on-campus health professionals or within the local area, and the price is relatively reasonable. Financial aid, if present, can be used by students to pay for it. Opting-out in case of having coverage elsewhere is easy as well.
Cons: Students might not be covered outside the school year, and seeing a doctor back home might be considered out-of-network and not fall under the plan.
- Through Work
It is the health insurance offered by workplaces to full-time employees (also part-time, depending on the employer).
Pros: Enrolment process is a simple form-filling procedure. Co-pays, deductibles and premiums can be automatically deducted from employees’ paychecks. This is usually the best coverage for the lowest price in the market.
Cons: Costly for working students to get continued coverage after losing their jobs. Better options are getting coverage through parents or spouse instead.
- Affordable Care Act/Healthcare Marketplace
It is a service operated by the federal/state government to help people shop for and enrol in health insurance.
Pros: Sometimes, federal subsidies are given to help pay for monthly premiums. Every plan provides minimum essential coverage. Offers different tiers like Bronze, Silver, Gold, Platinum with varying deductibles and out of pocket maximums.
Cons: May require additional paperwork to prove a student’s financial situation. A change in financial situation changes the subsidy amount as well.
- Short-Term Health Insurance
It is the health insurance providing coverage for shorter periods, with an option to renew after a year, in most cases.
Pros: Cheaper than plans that fall under the Affordable Care Act.
Cons: Most of these plans do not cover maternity care, prescription medications, substance-abuse treatment, or mental health care. The cost of premiums depends on the health status of an individual. Usually, not obtained by most people who apply for this, due to insurance companies having far fewer restrictions in which plans to include in short-term health insurance plans.
The above list is not exhaustive at all. The reality is, there are a lot of other types of insurance like Catastrophic Insurance, insurance plans provided by Medicaid, and as such, it is vital to keep certain things in mind. Here are some general guidelines for choosing an insurance provider, and what to do afterwards to ensure that medical costs are kept in check:
- In most cases, staying on a parent’s plan can be beneficial, especially when a student is still trying to figure everything out. This is important because of the ease of obtaining coverage and comparatively low premium costs. But on the other hand, health insurance provided by schools can be paid for if the students have a scholarship or grant.
- Finding in-network providers is essential, as this guarantees better coverage, even for the most expensive policies.
- Paying premiums on time is vital, as not doing this leads to loss of insurance coverage.
- Reading EOB letters thoroughly is very important, and any errors must be reported to the insurance company immediately.
- Pharmaceutical discount/savings cards are handy in most places as these save more than 50 per cent on certain medications.
- Urgent care clinics are a lot cheaper than emergency rooms for X-rays, so these can be considered for non-emergency cases like a sprain or a broken bone.
Obtaining health insurance isn’t as easy as it appears. Thus it’s a good idea to always talk with your parents, your friends or family and opt for the best health insurance provider that will be beneficial for you in the long run.