Insurance Basics

Your essential guide to navigating health insurance

We’re here to guide you through the complexities of health insurance. Understanding your coverage is crucial for managing healthcare costs and ensuring you receive the care you need. Learn the essential information about health insurance, including basic definitions and other helpful tips.

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What is health insurance?

Health insurance is a contract between you and an insurance company that helps cover the cost of your medical expenses. It can protect you from high healthcare costs by paying for a portion of your medical bills.

Types of health insurance plans

HMO (Health Maintenance Organization):

Requires you to use a network of doctors and hospitals. You need a referral from your primary care doctor to see a specialist.

PPO (Preferred Provider Organization):

Offers more flexibility in choosing healthcare providers. You can see specialists without a referral and use out-of-network providers at a higher cost.

EPO (Exclusive Provider Organization):

Similar to an HMO but does not require referrals. You must use in-network providers except in emergencies.

POS (Point of Service):

Combines features of HMO and PPO plans. You need a referral to see a specialist, but you can use out-of-network providers at a higher cost.

Key terms and definitions

Premium: The amount you pay for your health insurance every month.
Deductible: The amount you pay out-of-pocket for healthcare services before your insurance starts to pay.
Copayment (copay): A fixed amount you pay for a covered healthcare service, usually at the time of service.
Coinsurance: Your share of the costs of a covered healthcare service, calculated as a percentage of the allowed amount for the service.
Out-of-pocket maximum: The most you have to pay for covered services in a plan year. After you spend this amount, your insurance pays 100% for covered services.

How health insurance works

1. Enrolling in a plan

Open enrollment: This is the time each year when you can sign up for health insurance.

Special enrollment: If you have a major life event like getting married, having a baby or losing coverage, you can sign up outside of the open enrollment period.

2. Using your insurance

Finding doctors: Use your insurance company’s directory to find doctors and hospitals that are in-network (covered by your plan).

Getting Referrals: Some plans require you to get a referral from your primary care doctor before seeing a specialist.

3. Understanding claims

Submitting claims: Usually, your doctor or hospital will send the bill to your insurance company. If you need to do it yourself, follow the instructions from your insurer.

Processing claims: Your insurance company reviews the bill and decides how much they will pay based on your coverage.

Special situations

Medicare and Medicaid

Medicare: Federal health insurance for people 65 and older, and some younger people with disabilities.

Medicaid: State and federal program that provides health coverage for low-income individuals and families.

Health insurance for children

CHIP (Children’s Health Insurance Program): Provides low-cost health coverage for children in families that earn too much to qualify for Medicaid.

Health insurance for students

Student health plans: Health insurance plans offered by colleges and universities.

Common myths about health insurance

Myth: Health insurance is too expensive.

Fact: While health insurance can be costly, there are many affordable options available, including government programs like Medicaid and subsidies through the Health Insurance Marketplace.

Myth: I don't need health insurance because I'm healthy.

Fact: Health insurance is important even if you're healthy. It provides financial protection in case of unexpected medical emergencies or accidents.

Myth: All health insurance plans are the same.

Fact: Health insurance plans vary widely in terms of coverage, costs, and provider networks. It's important to compare plans to find one that meets your needs.

Myth: I can only get health insurance through my employer.

Fact: There are many ways to get health insurance, including through the Health Insurance Marketplace, private insurers and government programs like Medicare and Medicaid.

Myth: Health insurance covers everything.

Fact: Not all services are covered by health insurance. It's important to understand your plan's coverage and any exclusions or limitations.

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Disclaimer: The information provided on this page is for educational purposes only and may not apply to your specific situation. Always consult your insurance provider to understand the details of your coverage.