Health insurance is a type of protection that pays for some or all of your medical costs when you need care because of illness or injury. It also helps pay for preventive health services. Health insurance is available through private companies, the government (as in Medicare), and some employers. Each type has its own rules and benefits.
You pay for health insurance with a monthly payment, known as a premium. You may also have to pay cost-sharing, such as deductibles, copayments, or coinsurance, when you get health care services. These costs are usually capped once you reach your plan’s out-of-pocket maximum. Health insurance generally pays for a portion of your care and most of the costs associated with hospitalization and surgery. Some plans also offer wellness benefits, which are extra no-cost programs that can help you live a healthier life.
The type of coverage you choose depends on your needs and financial situation. Consider how much you can afford to spend each month on premiums and cost-sharing, as well as what services you use most often. You can find information on the cost of different health plans by visiting a comparison website or by talking to an independent insurance agent.
Some types of health insurance are regulated by state laws, while others are regulated at the federal level. For example, a self-insured employer group health plan is subject to state regulations but Medicare and supplemental insurance, such as Medigap, are governed at the federal level.
If you work for a large company, you may have the option to enroll in the health insurance offered by that employer. If you don’t, you can purchase individual health insurance directly from a private insurer or through the Health Insurance Marketplace. If you change jobs, you can keep your health insurance by using a special enrollment period triggered by a qualifying event or applying for COBRA continuation coverage.
All health insurance plans must cover certain essential health benefits, such as doctor visits and prescriptions. Additionally, most policies are required to cover preventive health services without charging you a copay or coinsurance. These requirements are set by the Affordable Care Act.
Some people are able to manage without health insurance, but for most, the costs of an unexpected illness or accident can be overwhelming. Having health insurance gives you peace of mind that your medical bills will be covered, and it allows you to focus on getting better. If you’re not sure whether to get health insurance, remember that you can apply for a subsidy or other public assistance to help lower your costs. It’s also important to think about what would happen if you lose your job and can no longer afford the cost of your health insurance. You’ll need to make other arrangements as soon as possible to avoid a gap in coverage.