Your Step-by-Step Guide to Buying Affordable Health Insurance

Looking for affordable health insurance? We understand why you might be overwhelmed. With all the options out in the Marketplace, it can be hard to know where to start.

To make your search for the best health insurance plan and provider stress-free, here’s a step-by-step guide to everything you need to know about buying affordable health insurance. You can also search for plans here.

Health insurance defined

Health insurance is an insurance product that covers some medical expenses of the insured individual.

This means that if you’re insured and need to undergo medical checks, surgeries, or purchase prescriptions and treatments, depending on your plan, then health insurance is what makes sure that your insurer can reimburse some of your expenses associated with illness or injury.

Terms to Know

Part of knowing which is the best health insurance plan for you is being familiar with common terms and phrases used in the industry. Get familiar with some of the most popular words you might hear when you’re shopping around for health insurance.

Covered service

This refers to a service that’s included in your policy. Your health insurance plan might cover doctors’ check-ups, for example, but not emergency surgery. Or, most doctors’ visits to treat illnesses might count as a covered service, but dental services would not be included.

Premiums

Premiums are the monthly fees associated with your health insurance plan. This is the amount of money you pay each month from the moment you sign up for your insurance policy until the renewal period (for Marketplace plans purchased during Open Enrollment, the coverage period starts January 1st.) Premiums may increase or decrease every year or upon each new renewal, but prices stay the same throughout the whole period.

Co-Pays

A co-payment, or co-pay, is money you pay when you get a covered service. If your policy states that you have a $15 copay for all doctor’s visits and $10 on prescription drugs, that means you shell out $15 after each doctor's visit and $10 for every prescription you fill. Depending on the policy, you can have different co-pays for different services.

Deductibles

Deductibles are the amount of money you pay each year to your insurer out of pocket before they begin to share the costs of your healthcare. A $4,000 deductible means you paying $4,000 for covered services, paid before your insurer has paid anything.

Many policies will cover preventive care before you meet your deductible. So for example, it’s possible to do a general check-up and not pay for anything. You may need to pay for treatments or prescriptions after said check-up if you hadn’t met your deductible yet.

Coinsurance

Coinsurance indicates how much of your medical bills you’re required to pay. For example, if your insurance company covers 80% of your bill, you would need to settle the remaining coinsurance of 20%.

Preventive care

Preventive care services are things you need to stay healthy but are not treatments for diseases. Examples include physical exams, cancer screenings, and vaccinations.

Out-of-pocket limit

Out-of-pocket limit refers to the maximum amount you’ll be paying out of pocket for covered health services in a year. If your out-of-pocket limit is $7,000 including deductibles and coinsurance costs but not including premiums, once you’ve paid $7,000 in these fees, you aren’t required to pay any more. 

Check with service providers if they have different policies regarding out-of-pocket limits for out-of-network care and in-network care.

In-network care

In-network care is care provided by  a medical health provider that is partnered with your insurance provider. When the medical health provider is in-network, rates have already been agreed-upon with your insurer, meaning you won’t have to pay more than any agreed-upon rate. Also, paying any amount for in-network care counts towards meeting your deductible. 

Out-of-network care

On the other hand, out-of-network care are services from a medical health provider that is not partnered with your insurer. Because they are not partnered with your insurance provider, costs associated with their services may be higher. This means you may pay more out-of-pocket for a particular service. 

If you have an HMO or EPO plan, your insurance company will not cover any non-emergency coverage you receive from an out of network provider. If you have a PPO or POS plan, your insurance company will cover some portion of the cost of care received out of network. You may have a separate, higher deductible for out-of-network care.   

Metal levels

All health insurance plans in the Marketplace are broken into four metal-level tiers: Platinum, Gold, Silver, and Bronze. These metal levels only reflect the differences in how costs for your healthcare are split between you and your insurance company. Generally speaking, bronze plans have lower monthly premiums and higher annual deductibles, and the higher metal-levels have higher premiums and lower annual deductibles. Depending on the amount of medical costs you end up with in a year, different metal levels will offer different kinds of value to you. The different metal tiers in no way reflect a difference in the level of care you receive. 

Types of health insurance

Individual

Individual plans may also be called single-payer plans, meaning you purchase your insurance plan independently from the insurance market. This means no employer or group is involved.

As an added note, individual insurance plans tend to be more expensive than the other type of health insurance: group insurance. This may also cover slightly more limited services. 

Scope of coverage

In the past, people who enrolled in individual healthcare plans often had to purchase extra “riders” to add coverages for specific conditions, such as pregnancy. Today, the Patient Protection and Affordable Care Act (ACA) has required insurers to make sure their healthcare plans all meet a minimum number of what is called essential benefits.

These are the 10 essential health benefits that all post-Obamacare insurance plans on the marketplace cover:

• Ambulatory patient services (outpatient care you get without being admitted to a hospital)
• Emergency services
• Hospitalization (like surgery and overnight stays)
• Pregnancy, maternity, and newborn care (both before and after birth)
• Mental health and substance use disorder services, including behavioral health treatment (this includes counseling and psychotherapy)
• Prescription drugs
• Rehabilitative and habilitative services and devices (services and devices to help people with injuries, disabilities, or chronic conditions gain or recover mental and physical skills)
• Laboratory services
• Preventive and wellness services and chronic disease management
• Pediatric services, including oral and vision care (but adult dental and vision coverage aren’t essential health benefits)

Additional benefits are also included, namely:

• Birth control coverage
• Breastfeeding coverage

Before the ACA was passed, health insurers were also able to deny individuals and families with preexisting medical conditions like cancer or hepatitis from buying new coverage outside high-risk pools. Today, however, everyone now has equal opportunities and access to the same insurance plans from insurers, regardless of existing medical conditions.

Group

Group plans are insurance plans provided by an employer, a government agency, or worker’s union. This is generally more affordable than an individual plan because the group provider covers most, if not all, the premiums involved in the plan. On average, an employee’s contribution to their group health plan premiums is just 18% of the total cost for self-only coverage, and 30% for family coverage.

If you’re part of a group insurance plan, chances are the covered services are more comprehensive. Small group plans (those offered by employers with fewer than 50 full time employees) are required to cover the same essential health benefits as individual health plans. This rule does not apply to large group plans, but historically large groups tend to offer comprehensive coverage. If you are covered by a large group plan, you will likely be offered coverage for essential services like maternity care, hospitalization, and prescription drug coverage.

The ACA does require both large group and small group health plans to cover free preventive care. However, some plans that existed before the ACA have been “grandfathered” or “grandmothered” in, meaning they don’t have to meet many of the ACA’s guidelines - for example, coverage for free preventive care and essential benefits. They still must not impose a lifetime limit for any essential benefits they do cover, and must let people keep their dependents on their plan until the age of 26. 

There are also two types of group plans, the self-funded group plans or the fully-insured group plans. 

Types of Group Plans

Self-funded 

In a self-funded group plan setup, employers or group providers assume full risk over its members and pays all covered medical costs.

Fully-insured

With fully-insured plans, the group provider partners with an insurance company and pays a premium to manage its members’ health care claims.

Because this amount isn’t kept in a reserve unlike with self-funded group insurance, this means the insurer carries the administrative and legal responsibilities that go with managing health claims.

Fully-insured group insurance plans are also covered by state laws, so if you ever need to appeal any claims, you can appeal straight to the insurance provider and not with your employer. 

Pros of Group Insurance Plans

• Cheaper for the individual in the long run because group providers often assume responsibility for most of the premiums
• If you have children under 26, they may be included in your employers’ group insurance plan
• Depending on the provider, group plans may be more comprehensive than individual plans, and gives you the freedom of choice, as many providers offer coverage options for each member
• You pay the same fees as everyone else in the same plan as the risk is distributed among a large group, and because a large entity handles payments, there is less risk of late or missed premium payments
• Because health insurance is a sought-out benefit by people in the job market, group insurance plans are making sure good companies can offer the best plans for their employees, thus improving the overall quality of the job market.

Why do you need health insurance?

One of the most common questions Americans ask about health insurance is: why do I need health insurance in the first place? 

There are several reasons, but some of the most compelling are the following:

Financial protection during medical emergencies

Even if you have no history of illness or are never sick, there’s no denying the huge possibility of medical emergencies.

Suddenly needing surgery or prolonged specialized care can bankrupt you in the long run, making health insurance a must-have. 

Most plans are required to have an annual out of pocket limit of at most $8,150 for self-only coverage and $16,300 for family plans in 2020. After you meet that limit, your insurance company will cover the full cost of your care, apart from monthly premiums. That means that even in the worst case scenario, there’s an upper limit to what you’ll have to pay in a calendar year. Paying for health insurance beats the alternative: going into medical debt. 

Even the most careful of individuals who takes good care of themselves or goes on regular checkups and appointments is at risk of regular, everyday accidents – slipping on stairs, getting into a car accident, getting an exercise-related injury. 

Let’s also not forget about other unforeseeable emergencies that even the most thorough preventive care can miss, like the need for a sudden appendectomy, being diagnosed with cancer, or having a stroke.

Care for these medical emergencies can cost thousands of dollars upfront, and thousands more if you require any kind of surgery or ongoing physical therapy.

The Affordable Care Act

The Affordable Care Act (ACA) made it a requirement to have health insurance. The act also aimed to streamline the way people can acquire health insurance by encouraging each state to create its own marketplace. The ACA implemented an individual mandate, meaning there were penalties on tax returns for the uninsured, but as of 2019, there’s no longer a nationwide requirementto pay a penalty on your tax return if you’re not insured. However, several states, including CA, DC, MA, NJ, and RI, have passed their own mandates, so if you live in one of those states, you may still have to pay a fine if you go without coverage. Even if your state doesn’t have an individual mandate, getting health insurance can still help secure your health and your finances. 

Preventive Care

Without health insurance, it’s easier to take preventive care like regular screenings and check-ups for granted.

This means you could be missing out on finding and diagnosing any minor issues that could potentially blow up into bigger ones in the future. 

The absence of health insurance also makes it easier to miss routine  treatments all in the name of saving money. Just imagine somebody who skips a blood pressure screening to save money, but ends up suffering from a heart attack because they failed to get early treatment.

Preventive care is the answer to avoiding expensive hospital stays or complications related to seemingly minor health issues. 

Besides, if you already know that your insurance covers preventive care measures, you’d be much more willing to get yourself checked to make the most of your insurance premiums.

Rising cost of medicines

There is no denying that the cost of medicines, especially the cost of prescription drugs in the United States, is costlier here than in other parts of the world – and it only continues to rise incrementally as time passes. 

Without health insurance, you might find that a medicine you need has an extremely high sticker price, even if it’s a common drug that’s been around for years.  If you’re insured, however, you can likely pay only a co-pay that’s a fraction of what you would have otherwise shelled out. 

Why do many Americans still go without health insurance?

Regardless of the many benefits of being insured, many Americans still do not have health insurance. As of 2017, there were reports that about 27.5 million Americans were uninsured.

Why are still so many Americans left without health insurance? Here are the three most common reasons that an American might still remain uncovered.

Cost of health insurance premiums

A 2018 survey shows that over half of Americans choose to delay medical care, either treatment or insurance, because they could not afford it.

Many American families who live paycheck to paycheck have to put money towards more immediately pressing expenses, such as rent or food for the month. Because health issues are not as regularly occurring as, say, electricity bills, many of low- to mid-income families defer medical care, including getting insured, because of financial issues.

The cost of health insurance premiums often can’t be justified for an American who can only afford to pay monthly fees on things they know they will use each month. 

Employment status

Many people living in the United States and are unemployed ask the question: how can I still get health insurance even if I don’t have a job?

Because many good jobs offer health insurance as employee benefits, some Americans would prefer to wait until any employer offers them a job with group insurance plans included.

The good news is, even if you don’t have a job or if your job doesn’t currently cover health insurance premiums, you may be eligible for different health insurance coverages.

• If you’re currently unemployed or underemployed, see if you can qualify for Medicaid.
• If you aren’t eligible for Medicaid because you earn more than the maximum income limit, you can shop the Marketplace and see which plans are most affordable to you. 
• If you’ve recently lost or left your job, you can see if COBRA plans work for you. This might be an expensive option because under COBRA, you have to pay the full premium for your group plan, including the part your employer used to cover for you. So it’s best to compare COBRA plans and ACA plans before deciding.

Migrant status

Migrant status also plays a part in whether or not someone is insured. You may a permanent resident, an international student, or a “lawfully present” immigrant.

To see different options for your migrant status, see some tips below:

• Check whether your migrant status allows you to enroll in a  Marketplace plan.
• If you are an international student studying in the United States, you have a few options to get health insurance from either your school or a private insurer.

The only time you can’t get any health insurance plan as an immigrant is if you are undocumented (except in California, where you can qualify for Medi-Cal up until the age of 26).

Factors that affect health insurance premiums

Five factors can affect a plan’s monthly premium: location, age, tobacco use, plan category, and whether the plan covers dependents. 

Previously, insurers were allowed to set your premium based on other factors like gender, profession, and body mass index, but that is no longer allowed. The Affordable Care Act mandates that your health, medical history, or gender can’t affect your premium.

When can I get Marketplace Health Insurance?

Open Enrollment Period

Generally speaking, if you are someone who buys their own health insurance — versus someone who gets their health insurance through their employer — you’ll be able to review your options and renew or purchase your plan for the upcoming year during the annual Open Enrollment Period (OEP). The Open Enrollment Period takes place each year from November 1 to January 15, in most states. If you’re out looking to purchase insurance for the first time or enroll in a new plan, this six-week period is your chance to sign up for the coverage you want for the upcoming calendar year. Miss this window to buy insurance, and in most cases, you’ll have to wait until the following year to pick, pay for, and get going on a health insurance plan.

Special Enrollment Period

There is one exception to the Open Enrollment Period, and that’s when a person experiences what’s known as a Qualifying Life Event (QLE). Qualifying Life Events fall into three general categories: A change in where you live (if a move would impact the kind of health insurance coverage you have), a change in your family unit (such as getting married or having or adopting a child), or losing the health insurance coverage you previously had (if your spouse loses their job, if you get a divorce from a spouse through whom you were insured, the death of a spouse or parent through whom you were insured, or if you turn 26 and age off your parents’ insurance coverage). All of these kinds of life changes qualify a person to enter into what’s known as a Special Enrollment Period (SEP). An SEP lets you shop on the Health Insurance Marketplace the same way you would during the annual Open Enrollment Period. However, your timeframe to shop and enroll in coverage is triggered by your Qualifying Life Event and not the general time constraints of Open Enrollment — and typically lasts 60 days.

How to Buy Affordable Health Insurance

You can find affordable health insurance plans no matter where you might be in your life.  Here is a step-by-step guide on how to get health insurance when you’re in the United States. 

1. Choose a health insurance plan

According to Healthcare.gov, these are the different kinds of insurance plans you can find in the Marketplace.

• Health Maintenance Organization (HMO): A type of health insurance plan that usually limits coverage to care from doctors who work for or contract with the HMO. It generally won't cover out-of-network care except in an emergency. An HMO may require you to live or work in its service area to be eligible for coverage. HMOs often provide integrated care and focus on prevention and wellness.
• Preferred Provider Organization (PPO): A type of health plan where you pay less if you use providers in the plan’s network. You can use doctors, hospitals, and providers outside of the network without a referral for an additional cost.
• Exclusive Provider Organization (EPO): A managed care plan where services are covered only if you use doctors, specialists, or hospitals in the plan’s network (except in an emergency).
• Point of Service (POS): A type of plan where you pay less if you use doctors, hospitals, and other health care providers that belong to the plan’s network. POS plans require you to get a referral from your primary care doctor in order to see a specialist.

There is also a special category of health plan called a High Deductible Health Plan (HDHP): A type of plan with a higher deductible than your typical health insurance plan that doesn’t cover any services but preventive care before you meet your deductible.. Monthly premiums for this kind of plan are usually lower, but you end up paying for more of your healthcare yourself before your insurer begins sharing in the costs. However, people enrolled in HDHPs are eligible to set up a special Health Savings Account, which allows you to pay for medical expenses pre-tax. 

You can compare available plans here.

2. Review the coverage for what you'll need

When choosing the best affordable health insurance plan for you, you’ll want to review your needs. Here are some good questions to ask yourself as you review your options:

• Will you require additional coverage for special needs or conditions? (Chronic diseases like diabetes; plans to have a baby, etc.)
• Will you need to see out-of-network providers? (If so, consider a PPO that has the largest coverage for out-of-network care.)
• Can you put aside money to cover cost for health care yourself? (If you choose a HDHP, you will need to have thousands of dollars set aside to cover emergencies and care yourself. This is why most people opt to pay higher premiums per month instead of budget for unforeseen emergencies that could be costlier.)

3. Compare the different plans

You’ll want to consider a number of factors before you decide on the best affordable health insurance plan for you. Some additional things to weigh:

• Coverage: Find out what kind of care you will want covered and compare plans from there. For example, some plans will not include dental or vision care, but other plans will. Note that the better the coverage, the more likely you pay higher premiums.
• Benefits: Your insurance plan will come with an Explanation of Benefits (EOB) that tells you exactly what your coinsurance, copays, and deductibles are.
• Premiums: Frankly, every insurance plan will have trade-offs, as no one plan can completely meet all your needs with your budget and circumstances. For example, if you want low coinsurance cost, nopays, and deductibles, you will pay higher premiums. Inversely, if you want low premiums, you will have higher coinsurance cost, copays, and deductibles.
• Provider network: Lastly, you want to see which medical providers are within the network of your insurer or plan. If you have a hospital or doctor you like, look for plans where they’re included. Also note any specialized needs you have that may require long-term care, then note different providers who may be able to provide care for those needs. 

If you’re really unsure how to compare plans and move forward, consider enlisting a health insurance broke for help. While a health insurance broker isn’t a requirement to buy affordable health insurance, one of the pros is that they’re far more experienced with the different plans and providers in the Marketplace and will be able to give you recommendations.

4. Shop around

Make sure to look at multiple insurance companies and multiple plans to make sure you’re getting the best one for your needs. Insurance products have what is called an Open Enrollment Period. This is the time when you’re able to purchase a plan or policy, so you will need to keep your eyes open and shop around.Generally, open enrollment for Marketplace plans takes place once a year and runs from November 1 to January 15. Some states have extended open enrollment periods.

To see available health insurance plans and prices, enter your zip code below.

Reducing the Cost of your Medical Bills

Negotiate costs and check for discounts

It’s possible to get discounts and lower cost for certain medical procedures. The trick is to plan ahead of time. Some things you can try as early as now:

• Ask if there are discounts or rebates if you make payments for medical costs in cash.
• Speak to your doctor individually; they may understand that you need financial assistance and offer a small discount.
• Negotiate with providers for discounts if you make payments in advance.

Invest in accounts to pay for health insurance premiums

If you want to try lessening the cost of healthcare services, there are these different ways to get tax breaks you can employ:

• Healthcare reimbursement accounts (HRA): HRAs are maintained by employers who put in money for the account that you can use for eligible healthcare expenses. Depending on your employer’s policies, the remaining amount in your HRA may roll over year after year, making it easier to handle medical bills in the future.
• Health savings accounts (HSA): You can open an HSA if your high deductible health plan fits the criteria with your bank or broker. Your employer may also offer HSAs. These accounts let you invest money with pre-tax funds then later on withdraw it without paying taxes to cover healthcare expenses. Once you turn 65, HSA dollars can be withdrawn penalty free for non-healthcare expenses (though you’ll still have to pay taxes on the withdrawal.) That means HSAs in some ways function like an investment account.
• Flexible savings accounts (FSA): FSAs are similar to HSAs . Generally, however, if you don’t use up the money in your FSA, it may not roll over to the next year.

Key Takeaways

Getting health insurance for yourself and your family doesn’t need to be something you delay any longer. Because of the risk of medical emergencies and increasing cost of even everyday medicines, the pros of getting health insurance far outweigh the cons.

Buying your own health insurance plan doesn’t need to be difficult either. Shop for the best health insurance plans online, or contact the HealthSherpa Consumer Advocate Team at (872) 228-2549 to see your best options.