Factors to Consider When Choosing Health Insurance

It is important that you obtain health insurance for yourself and your immediate family. Insurance protects you from high health care costs, especially those related to chronic medical conditions or the need for hospital treatment.

You should buy health insurance for the same reason you have car or home insurance: to protect your savings and income. But you also need health insurance to make sure you get high-cost health care when you need it. For hospitals that accept Medicare (which are most hospitals), federal law requires them to evaluate and stabilize anyone who shows up in emergency departments, including women in active labor.

 But aside from evaluation and stabilization in the emergency department, there is no requirement that hospitals provide care for people who cannot afford it. Therefore, the lack of health insurance can end up being a great barrier to receiving care.

How do you get health insurance?

Depending on your age, employment status, and financial situation, there are several ways to obtain health insurance, including:

• Health insurance provided by the employer. Large companies in the United States must provide affordable health insurance such as employee benefits (or face a penalty), and many small employers also offer coverage for their workers. You may have to pay part of the monthly premium or the cost of health insurance, especially if you add your family to your plan. But most employers that provide health coverage tend to pay the most premiums.
• Health insurance that you buy yourself. If you are self-employed or for a small business that does not offer health insurance, you will need to purchase it yourself. You can get it through your state's health insurance exchange, or directly from the insurance company, but premium support (to reduce the amount you have to pay for your coverage) and cost-sharing subsidies (to reduce the amount you must pay when you need health care) are only available if you got your coverage through an exchange. (Note that in most areas, there are also plans available that do not comply with the Affordable Care Act, such as short-term health insurance, fixed compensation plans, ministerial plans for sharing health care, direct plans of primary health care, etc. But generally these are never adequate to serve as standalone coverage for an extended period of time).
• Government-provided health insurance. If you are 65 or older, have a disability, or have low or no income, you may qualify for health insurance provided by the government, such as Medicare or Medicaid. Children, and in some states, pregnant women, qualify for CHIP with family incomes that can extend to the middle class.
• Depending on the coverage and your circumstances, you may or may not have to pay monthly premiums for government-sponsored health coverage.

However, there are some exceptions. Some are caused by design flaws in ACA, including family dysfunction and the fact that premium benefits are set at 400% of the poverty level, resulting in unaffordable coverage for some people with incomes just above that threshold. But some are the result of ACA regulations, court decisions and resistance, including the Medicaid coverage gap that exists in 13 states that have refused to accept federal funding to expand Medicaid (note that two of those states, Oklahoma and Missouri will expand Medicaid in mid-2021, closing gaps. Coverage). 

How to Choose a Health Plan

There are many factors to consider when choosing health insurance. These factors may differ if you choose one of several employer health plan options or purchase your own health insurance.

Do your homework before buying any health insurance! Make sure you know what your health insurance plan will pay ... and what it won't.