Shopping for some things is easy, right? Say you need a new pair of shoes. Do you like the style? Do they fit? Boom, you’re done! But shopping for other things isn’t quite as simple, whether it’s a new car, a computer, or even a new place to live.
Health insurance is no different. There are lots of terms you may be unfamiliar with.Take Tom, here. He’s heard something about healthcare reform, but isn’t sure what it is.
Let’s follow the road signs with Tom and figure it all out. “Healthcare Reform” is a good place to start.
Healthcare Reform refers to the Affordable Care Act that was signed into law a couple of years ago. Lots of Americans – about 50 million – don’t have health insurance. One of the goals of the new law is to make insurance accessible to everyone. That way people can get checkups to stay healthy. And they can see a doctor right away when they get sick.
But – hold onto your hat! – the law includes something called an Individual Mandate which goes into effect in January, 2014. Tom’s wondering, What’s that?! A “mandate” simply means that you’re required to do something specific. In this case, it means that most everyone will be required to have health insurance. In other words, everyone in your family – spouse, partner, kids – has to be covered by an insurance plan. Tom is single and doesn’t have insurance, so he’ll need to get his own plan.
The law has a provision to help some people purchase insurance. Online Health Insurance Marketplaces are being set up. A virtual mall is one way to look at it. You can shop and compare policies from different insurance companies, including Humana, in one place online. Or you can go to an insurer’s website and buy from them directly, or purchase from an insurance agent.
The law also wants to make sure insurers offer certain standard benefits. Every plan is required to include at least 10 Essential Health Benefits. These include covering the cost of stuff like prescription drugs, hospitalization, annual check-ups, and maternity and newborn care.
So how does all this stuff get paid for? That’s where Tom and the rest of us come in. When you sign up for a plan, you pay a Premium -- it’s kind of like belonging to a gym. You pay a set amount each month or quarter to become a member of the plan. There are some other member costs, too called Cost-Sharing. These include a deductible, doctor visit co-payments, and coinsurance, which refers to medical expenses that are shared by you and your insurer. This may sound like a lot of money coming out of your pocket, but it’s a heck of a lot cheaper than if you had to pay all your medical bills yourself.
Still, there are ways Tom can control these costs. Insurers contract with a network of doctors, hospitals, and other healthcare providers to offer services at lower rates. When Tom goes to doctors in the network, he pays less for covered expenses than if he used doctors outside the Network.
The law has another way to help people pay their share of healthcare costs. Some folks, who buy their insurance through the Online Health Insurance Marketplaces, will qualify for government Subsidies, based on their income and family size. That could be an Advance Tax Credit to put toward their premium. For others, deductibles and co-pays will be lowered.
This may seem overwhelming, and there’s a lot more to learn. But if you follow the signs on the road and understand these basic terms, you’re well on your way to finding health insurance coverage that best meets your needs, at a price you can afford.
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This information is only a high-level summary of certain provisions of the health care law. This information does NOT attempt to summarize all provisions of the health care reform law. This information is not and should NOT be used as legal or tax advice; it should not be used as a basis for decisions regarding how the health care reform law will affect you and/or your business. Should you have any questions on how the health care reform law (including the high level summary of certain provisions of health care reform) will affect you and/or your business, you should seek professional advice from attorneys or other advisors.
Insured by Humana Insurance Company, Humana Health Plan, Inc., Humana Health Insurance Company of Florida, Inc., or Humana Health Benefit Plan of Louisiana, Inc. or offered by Humana Medical Plan Inc., Humana Employers Health Plan of Georgia, Inc., or Humana Health Plan of Texas, Inc.
For Arizona residents: Insured by Humana Insurance Company. For Texas residents: Insured by Humana Insurance Company or offered by Humana Health Plan of Texas, Inc.
Our health benefit plans have exclusions and limitations and terms under which the coverage may be continued in force or discontinued. For costs and complete details of the coverage, call or write your Humana insurance agent or broker.