Why should I have health coverage?
No one plans to get sick or hurt, but most people need medical care at some point. Health insurance covers these costs and protects you from very high expenses.
Health coverage when you need care
Health insurance is a contract between you and your insurance company. You buy a plan, and the company agrees to pay part of your medical costs when you get sick or hurt.
There are other important benefits of health insurance. Plans available in the Marketplace (and most other plans) provide free preventive care, like vaccines, screenings, and check-ups. They also cover some costs for prescription drugs.
Health insurance protects you from high, unexpected costs
Did you know the average cost of a 3-day hospital stay is $30,000? Or that fixing a broken leg can cost up to $7500? Having health coverage can help protect you from high, unexpected costs like these.
How health insurance coverage works
When you have insurance, you pay some costs and your insurance plan pays some others. Here are some of the ways that the payments break down:
- Premium A premium is a fixed amount you pay to your insurance plan, usually every month. You pay this even if you don't use medical care that month.
- Deductible If you need medical care, a deductible is the amount you pay for care before the insurance company starts to pay its share. Once you meet your deductible, your insurance company begins to cover some costs of your care. Some plans have lower deductibles, like $250. Some have higher deductibles, like $2000. Many plans provide preventive services, and sometimes other care, before you've met your deductible.
- Copayment A copayment is a fixed amount you'll pay for a medical service after you've met your deductible. For example, after meeting your deductible you may pay $25 for a visit to the doctor's office that would cost $150 if you didn't have coverage. The health plan pays the rest.
- Coinsurance Coinsurance is similar to copayment, except it's a percentage of costs you pay. For instance, you may pay 20% of the cost of a $100 medical bill. So you would pay $20 and the health plan would pay the rest.
How insurance protects you
Insurance coverage protects you from high medical costs 2 ways:
- Out-of-pocket maximum This is the total amount you'll have to pay if you get sick. For example, if your plan has a $3000 out-of-pocket maximum, once you pay $3000 in deductibles, coinsurance, and copayments the plan will pay for any covered care above that amount for the rest of the year.
- No yearly or lifetime limits Health plans in the Marketplace can't put dollar limits on how much they’ll spend each year or over your lifetime to cover essential health benefits. After you've reached your out-of-pocket maximum, your insurance company must pay for all of your covered medical care with no limit.
People without health coverage are exposed to these costs. This can sometimes lead people without coverage into deep debt or even into bankruptcy.
What if I don’t get health coverage?
If you don't have health coverage at all, you have to pay the full cost of all of your medical expenses. You also have no protection from very high bills. This can mean costs of $50 for a flu shot, or $30,000 for a 3-day hospitalization, or hundreds of thousands of dollars for comprehensive cancer care.
In addition, if you don't have health coverage in 2014 and beyond, you may have to pay a fee.