Health Care 101 for the Uninsured

As a recent college graduate struggling to find a job, health care has become an unavoidable onus that constantly weighs on my shoulders. The coverage I received under my parents for the past 22 years of my life has run out and I'm left uninsured if, God forbid, something terrible happens. I have little knowledge of health care, little money to buy health care, and most importantly, little choice in the matter. So what do I do?

The first thing I am trying to do is to get educated on the subject. I used www.ehealthinsurance.com to find free quotes for health insurance without having to fill in home address or email forms. The selection might be limited on the ehealthinsurance website, but it gives a good frame of reference when determining healthcare costs. If you're like me and know nothing about health care terminology, then you are struggling to understand all the words being tossed around when looking up rates. From everything that I have read so far, here are some of the main topics to understand before considering health care:

Deductible

In short, the deductible is what you pay before health insurance kicks in for the rest. A higher deductible for the most part means a lower monthly cost. For example, a $1,000 deductible means you pay an annual $1,000 to the health care provider before it pays any of your bills. Typically, higher deductibles mean lower monthly rates. Be wary that the deductible is a lump sum amount that the insurance company requires you to pay before it compensates you for bills; make sure to add that to your budget when considering what kind of insurance you need.

Co-pays

When making an office visit or filling a prescription, you will most likely have a co-pay. A co-pay is your out-pocket-expense before the insurance provider covers the rest. In essence, it is like a mini-deductible on things like office visits and prescription fills. Office visits may range from a standard $15 up to $35 or more. Some health care options provide for no-charge office visits after the deductible is paid. Prescriptions usually have a co-pay based on what drug or what brand is being purchased. Brand name drugs will almost always have higher co-pays or may be subject to coinsurance rates. Generic medications will usually have a co-pay ranging from $15 up to $60 or more depending on the drug. Make sure to check what type of coverage is offered in an insurance plan before purchasing as you may end up paying more than you bargained for after your first check-up.

Coinsurance

These rates tell you what percentage of a hospital bill you will have to pay. Typically they range from 0%-35%. A 0% coinsurance rate means the insurance company will pay the entire bill (usually after you have already paid the deductible), while a 20% rate, for instance, means you will have to pay $20 for every $100 of the bill. Keep in mind that coinsurance rates apply after the deductible and any co-pays have been paid. That means that on top of your chosen deductible you will pay the coinsurance rate for the remaining balance on the bill.

Network

Each insurance company has a network of doctors and specialists. When purchasing health care, you will be allowed to visit these in-network doctors and specialists at the rates provided by your plan. In the event you have to visit a doctor outside of the network, expect to receive little or no compensation from your health insurance company. Make sure you know what doctors are in your network before paying them a visit.

HMO vs. PPO vs. POS

HMOs (Health Maintenance Organizations) are a type of insurance that requires you to choose a PCP (Primary Care Physician) from inside their network of chosen doctors. Once you have chosen this PCP, he will issue referrals for you to see specialists regarding your condition. HMOs typically give you a wide range of services with low deductibles and possible no co-pays, but a referral from your PCP is necessary.

PPOs (Preferred Provider Organizations) give discounts to its members when using doctors in their network. While you don't have to pick a PCP, you will have to pay a deductible as well as any co-pays or coinsurance costs. Once again, out-of-network coverage will be limited and you should expect to pay higher rates on services rendered from doctors outside of the coverage network.

POS (Point Of Service) plans combine the features of HMOs and PPOs. POS plans do require you to pick a PCP and will offer little to no deductible for services rendered within the provider network. For out-of-network services, you will most likely have to pay the bill upfront. In addition, coverage may be limited for non-network doctors and you will have to pay the bill upfront before submitting it to your insurance company.

Health care is not an easy thing to comprehend and I'm still trying to understand it myself. It is difficult enough for me to find a job, pay for rent, buy food and groceries, and cover all my necessary costs without having to purchase health care on top of it all. In America, we have little competition between health care providers, which allows them to set the price. It's sad that we have to make decisions on how much coverage we can afford, but that is the reality we face today. Being educated on the subject is one of the best ways to control your costs and allows you to pick the coverage that is right for you.