Health Insurance
The Sick History Of Health Insurance
In the mid-19th century, just before the American Civil War, private organizations began offering “accident insurance.” Most long-distance travel – at least in the north and northeast – was by dangerous steamboat. For a few cents, you could purchase a promise that if something happened to you on the river, you (or your survivors) would be compensated. What we think of as “health insurance” in the early 21st century, however, is a concept that’s less than a hundred years old. “Medical coverage” sprang out of labor reforms during the Second Industrial Revolution.
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Workers were regularly injured at work. As the laws gradually evolved to provide a degree of protection in such circumstances, employers were required to help pay expenses associated with treatment. The Great Depression of the 1930s increased the idea that the government should play some role in regulating the economy and provide basic “safety nets” for citizens facing hard times through no fault of their own.
Medicare and Medicaid were created in the 1960s to make health care more accessible to older Americans or those who are for some reason unable to provide for themselves. Gradually, health care became more accessible to a wider number of people and involved more and more government regulations. The system became more comprehensive, but also more complex and difficult to fully understand.
Employers tried different ideas to keep coverage cost effective. By the 1980s, the concept of “managed care” was introduced. By emphasizing preventative care and organizing what we’d today call “networks” of participating physicians and facilities, managed care systems offered an exchange of sorts.
We’ll direct everyone covered by our program to your doctors and hospitals, and in exchange you’ll follow our rules and pricing structures to make sure we’re not paying more than necessary.
The Affordable Care Act (“Obamacare”) was passed in 2010 and has been a point of contention ever since. For many, it doesn’t offer affordable health care to enough people. For others, it’s “federal health insurance” and thus too much government overreach to begin with. As of 2020, the party in charge is doing everything they can to get rid of what’s left of Affordable Care.
In the meantime, no one quite knows what procedures are necessary and which are optional, which are essential and which are just profitable. We’re never quite sure if what we’re prescribed is our doctor’s first choice or simply the closest thing actually covered by our plan so it will have to do. It can be a bit overwhelming, not to mention discouraging.
It’s not all bad news. First, if you’re confused by health insurance and health care options in general, you’re in good company. It’s not just you – it really is a mess. The second bit of good news is that most medical professionals are hard-working, amazingly capable individuals whose primary goal is helping you get better no matter what hoops they have to jump through to do so. The third is that thanks to the wonders of the internet and modern information-crunching technology, you don’t have to figure it all out alone.
Making Sense Of Your Health Insurance Options
It’s not hard to find the average monthly health insurance cost for your age and gender in your ZIP code. Thanks to the wonders of the 21st century and a little healthy competition (see what we did there?), it’s not even that difficult to get quotes for the cheapest family health insurance in your area or do a quick online search for average health insurance monthly cost for you individually.
What’s trickier is figuring out what sort of coverage makes the most sense for you and your family, and how it actually works. Your employer may have a standard plan you can take or leave, or a half-dozen options from which to choose. There are private options available as well, and a government website that’s supposed to help you figure it all out but doesn’t always work. There are copays and deductibles and co-insurance and something called a “donut hole” that’s bad but… goes away eventually? There are networks and preventative care and too many acronyms to keep straight – PPO, HMO, PCP, HSA, COBRA, and EMO? (Like the Muppet? Or was it EPO?)
Take a slow, deep breath. You don’t have to figure it all out at once. And you don’t have to sort through it all alone. One of our primary convictions here at Insurry, and across the Goalry family, is that most people are perfectly capable of taking more effective control of their personal finances if provided with the right information in plain, simple English.
We all deserve the sorts of tools, connections, and opportunities as those with more resources who start with more advantages. Our blogs are filled with information and insight to help “normal” folks sort through the lingo and paperwork and other headaches. We’ll never try to make your decisions for you, but we can help connect you to a quality, affordable options based on your specific information and circumstances.
Imagine being able to make the process as simple as you choose or take as much control over the details as you wish, as easily as you pull up movie times or directions to the nearest hardware store. Imagine being armed with knowledge and numbers in real-time whenever there are major choices to be made. Imagine feeling prepared and informed so you can ask better questions and make better decisions. Knowledge is power, and we believe that knowledge should be readily available to anyone who’s interested.
Your Health Insurance Overview: Types Of Health Insurance
Before you can compare health plans or choose between health insurance companies, it’s important to have a general understanding of the basic types of health insurance you’re likely to encounter along the way.
Keep in mind that every policy is different and the field is constantly evolving – always pay attention to the details. In general, however, here are some terms you may encounter and what they mean.
+ Individual Plans vs. Family Plans
If you’re choosing between plans offered by an employer, or sometimes even with private insurance, you’ll often be offered two or three options as a starting point. Individual health insurance, as the name suggests, covers you and only you. Obviously, it’s usually the least expensive option and the one some employers will help pay for.
The alternative is a family insurance plan. It usually doesn’t matter how many dependents you have under this option – they’re all covered in the same way. Whether you have one child or seven, your monthly premium is the same.
Some plans have a middle option for you and a spouse but no kids. But that’s just the beginning.
+ Dental and Vision Care
These are rarely covered under standard health insurance plans. They’re almost always separate plans. Don’t let this reality, or the fact that they may not cover much, let you think they’re not important. It’s worth paying attention to what they do or don’t cover.
It’s not always easy to know how one company’s options for dental insurance compare to another’s. If you already have a preferred dentist, ask what coverage they accept ahead of time.
+ Prescription Coverage
If health care pricing and insurance is a Pandora’s Box of bewildering minutia, prescriptions are a box within that box that doesn’t make things any clearer. Because you rarely know in advance what prescriptions you might one day need, it’s difficult to plan ahead on this one. Pay attention to what each plan says about prescriptions, however. Some plans have pretty decent pricing if you use their preferred mail order sources or accept generics when available. Others cover some drugs and not others, so your doctor has to choose from what’s available unless you want to pay out of pocket.
You know those discount cards you see advertised on TV? Surprisingly, sometimes those are a reasonable option. If you find yourself unable to pay for a specific prescription or unhappy with the price available to you, it’s worth at least looking to see what these plans can do – even if it means going to a different pharmacy from time to time.
+ Compare Healthcare Plans: HMO and PPO
You may remember a reference to “managed care” above. An HMO is a “Health Maintenance Organization,” which is one of the most popular varieties of managed care health insurance options. Simply put, an HMO offers you lower costs by limiting the pool of physicians from which you can choose, and by requiring most of your medical care to be coordinated through your Primary Care Physician (PCP).
The insuring organization partners with a specific system of medical providers. These approved providers are “in network” – they’re on the “approved” list for your coverage. If you go “out of network,” you may have to pay those costs yourself. The medical providers get a sort of “exclusive” on a large pool of patients, and in exchange the insuring company secures lower rates from the providers. In turn, this means a lower average monthly health insurance cost for you as well.
Requiring your PCP to authorize “referrals” to any necessary specialists or approve various medical procedures is intended to control costs as well. There’s a presumed efficiency to all of your care being centralized this way, and it makes it less likely you’ll receive duplicate services or unnecessary procedures. HMOs can be inconvenient, or even frustrating, but they’re often one of the most affordable health care options available while still allowing access to quality care.
A PPO is a “Preferred Provider Organization.” This is another of the most popular varieties of managed care health insurance options. It’s similar to an HMO, but generally offers reduced coverage for out-of-network providers. In other words, you pay the least if you use in-network physicians and facilities. You’ll receive partial help paying for out-of-network physicians and facilities, however. You also don’t usually have to coordinate everything through your PCP (primary care physician).
When you compare health insurance plans, you’ll generally find that you’ll pay a bit more for a PPO than an HMO, both monthly and in terms of deductibles or copayments. The benefit is that you have greater flexibility. Only you can decide which is more important to you.
These aren’t the only types of health insurance structures out there. Most have variations within variations. Some institutions have found it beneficial to simply set up their own clinics for employees and their families. These work as primary care physicians or simply handle routine vaccinations or “urgent care” needs, depending on the employees. They’re sort of a concentrated form of HMO who serve a specific group exclusively. Keep reading the Insurry blogs for more explanations of various plans and programs.
Common Health Insurance Terminology
It’s difficult to compare health insurance companies or compare health insurance plans unless you’re clear on the terminology commonly used. Here are a few terms you’re likely to encounter and what they usually mean.
+ Premium
Your premium is the monthly amount you pay or have deducted from your check in exchange for coverage. When you compare healthcare plans, this is the number you probably see first and the easiest to compare.
+ Deductible
Most plans have a deductible. This is the amount you have to pay each year before your benefits kick in. If you have vehicle insurance, you’re already familiar with the idea. The higher the deductible, the lower your premium. If you can afford to cover many normal medical expenses out-of-pocket and see insurance primarily as a safety net for severe conditions or accidents, a high deductible might be appropriate. If your resources are limited, it may be worth it to you to pay more monthly to protect yourself from even medium-sized unexpected expenses
+ Copay
This is a token amount you’re expected to pay for many normal doctor’s visits. If you’re going in for lab work or a checkup, your deductible might be $20, $50, or higher. Visits to urgent care or emergency rooms tend to have higher copays. The idea is partially to offset the cost of normal visits in order to keep your premium low, but it’s also a way to discourage patients from simply going to the doctor over every little thing because they have insurance.
+ Preventative Services
Some health insurance companies have begun to take the approach that the best way to reduce health insurance monthly cost is to encourage clients to stay healthier in the first place. It’s difficult to penalize you for eating poorly or not getting enough exercise, even though those things increase health care costs for everyone. What they can do, however, is offer discounts or rewards for participating in healthy activities or programs, losing weight, or otherwise making better health decisions. Many will also offer zero copays or other out-of-pocket expenses for checkups or other efforts to head off medical problems rather than waiting until you’re ill or injured.
JUST THE BEGINNING
It’s probably no surprise that medical coverage for yourself or your family can get complicated quickly. Even comparing individual health insurance plans can open up a whole new lexicon of terminology and issues. We haven’t even talked about out-of-pocket maximums, COBRA, open enrollment periods, dual coverage, co-insurance, or health savings accounts.
But we’re also not going anywhere. Keep reading our blogs and watching our videos. If you don’t see something covered there, it probably will be soon. Keep watching for that next generation tech we mentioned above to make comparing insurance options easier and more complete than ever before. And of course, if you’re ready to talk specifics, we can help you find a reputable insurer based on your specific circumstances and needs.
In the meantime, know that you can handle this. If terms or plans come up that you don’t understand, ask. It’s their job to explain it. If they’re not able to give you a clear, reasonable answer, you probably shouldn’t be buying health insurance from them anyway. Trust yourself to make the best decision possible. There are things you can control and know and consider, but just like with our health, there are also many unknowns and things we simply have to deal with as they arise. And you can. You will.
Take some time and look around. Then, let us know how we can help.
