In the past few years, no formerly benign concept has become as politically charged as that of health insurance. The merits of the Affordable Care Act, the difficulties with the program’s rollout, and other ideas of how to reform the American healthcare system continue to be widely debated on cable news, talk radio, and even Facebook. It is so easy to get caught up in the debate surrounding health insurance that young people can lose sight of basic information that might be helpful in choosing a plan that works for you. If your employer does not provide health insurance and you choose to purchase it for yourself, there are some basic core concepts of which you should be aware. First, the two basic types of health insurance are fee for service insurance, and managed care. In a fee for service plan, the patient is free to see the doctor of his or her choice, and either the patient or the provider will file a claim for payment with the insurance company.These types of plans presume that the provider will be paid for services rendered. A common criticism of fee for service plans is that they incentivize quantity of care, rather than quality. A second type of insurance is the managed care plan. Health maintenance organizations, preferred partner organizations, and point of service plans are all types of managed care plans.These types of plans typically provide incentives for selecting healthcare providers with the plan. Managed care plans usually emphasize preventive care, such as screening exams. Occasionally, managed care plans require patients to see a primary care physician first before being referred to a specialist. Consulting with an insurance agent and requesting a quote can help you choose between these two types of insurance to find a plan that meets your needs.
Something to take into consideration when choosing a policy is your overall health. Fortunately, young people by and large have fewer chronic health problems than their older counterparts. For many, a high deductible plan with a health savings account can be a good option. In a high deductible plan, you are responsible for your medical expenses until you meet your deductible. When your deductible is met, insurance takes over your bills. Your deductible might be met incrementally, through payments here and there to providers for routine checkups and an occasional prescription medication. Alternatively, the deductible could be met rather quickly in the event of an unexpected accident or illness.The advantage of a health savings account is that you can defer some of your income into a savings account and use it to pay medical qualified medical expenses, including doctor’s visits and prescription medications, toward your deductible. Money invested in a health savings account is not subject to federal income tax.
Selecting a health insurance plan is a personal decision. Your relative health, income and tax liabilities should be considered in choosing a proper plan. An insurance agent can help make sense of the new laws and help find a plan that is right for you and your family.