Health insurance is a contract that requires the insurer to pay for some or all of a person’s medical expenses in exchange for a monthly premium. “It’s meant to save you financial ruin, should you run into an emergency,” says Molly Moore, co-founder and chief health planning officer at health insurance start-up Descent. “Some people get health insurance because they know they have ongoing health care issues that need attention, and some people get health insurance because they’re afraid of something that might happen. that they can’t plan,” she says.
Going without health insurance coverage risks both your ability to care for yourself and a major risk to your personal finances, explains Noah Lang, chief executive officer and co-founder of Stride Health, a for-profit platform for freelance workers. They say people who are uninsured (or underinsured) hesitate to seek care, which can put their health at risk.
People who have health insurance are more likely to go to the doctor often because they know what it will cost, says Katie Rodgers Turner, executive director of the Family Healthcare Foundation in Tampa Bay, Florida. They tend to follow their doctor’s flag of medical concerns, such as high blood pressure, before they turn into major problems, and they are more likely to obtain needed prescription drugs since they are available at a more affordable rate.
Health Insurance Coverage
All health insurance plans sold on the federal marketplace are compliant with the Affordable Care Act (ACA), meaning they cover a set of 10 categories of services. These essential benefits that must be covered include:
- Outpatient care
- Emergency services
- Hospitalization, such as for surgery and/or overnight stays
- Pregnancy, maternity and newborn care before and after birth
- Mental health care and substance use disorder services
- Prescription drugs
- Rehabilitative and habilitative services and devices for those with disabilities, injuries or chronic conditions
- Laboratory services
- Preventative and wellness services, including cervical cancer screening and HIV screening and counseling
- Pediatric services, including vision and dental care
Outside these essential benefits, what a plan covers will vary, which is why it’s important to read the fine print.
How Much Does Health Insurance Cost?
The cost of health insurance varies dramatically, but certain factors might increase or lower your costs. According to HealthCare.gov, the five things that can increase your monthly premium are:
- Your age. Premiums can be as much as three times higher for older people compared to younger enrollees.
- Your location. Where you live impacts your premium, depending on factors like cost of living and state rules.
- Tobacco use. People who use tobacco products can be charged up to 50% more compared to those who don’t.
- Whether you’re seeking coverage as an individual or for a family. If you’re signing up for a plan that will also cover dependents, expect to be charged more.
- Your plan category. There are four different “metal tiers” of plans you can choose from: bronze, silver, gold and platinum. These categories determine how you split your costs with your insurer. For example, bronze plans typically have lower monthly premiums and higher out-of-pocket costs than the other tiers, and platinum plans tend to have the highest premiums with the lowest out-of-pocket costs.
While health insurance is generally considered very expensive, Lang says, there are ways to get help paying for your coverage. A recent Stride survey found that 80% of uninsured gig workers who didn’t think they could afford health insurance didn’t know about tax credits that could help with low-cost coverage. were. He said the American Rescue Planning Act 2021 (also known as the COVID-19 Stimulus Package) has made insurance more affordable. Stride data shows that about 40% of gig workers enrolled in health insurance in 2021 were paying less than $1 a month.
The ACA provides financial assistance that reduces monthly premiums and out-of-pocket expenses to help make health insurance more affordable. For example, premium tax credits are based on household income. “You probably deserve help,” Lang says. With the American Rescue Planning Act 2021, Americans who previously qualified for subsidies are eligible for more money and those who previously weren’t able to qualify, he says.