It can be difficult to understand how your health insurance works, especially is you’ve just become insured. Below find some basic information on health insurance in the United States:
Who pays for healthcare?
Health insurance in the United States functions as a third party payer system, meaning that the insurance company pays the healthcare provider for services rendered; the individual who uses the services doesn’t directly pay for those services.
There are two main types of health insurance: public and private insurance. Public insurance includes Medicaid, Medicare, and Tricare, where the government, at the state or federal level, serves as the insurer. Private insurance is when an individual or their employer pays a private health insurance that pays the provider for services rendered. Some example private health insurance companies are Blue Cross Blue Shield, Kaiser Permanente, and Aetna.
- Premium– a set amount paid to an insurance company for an insurance policy that is normally paid monthly
- Copay– short for copayment which is a payment made by a beneficiary of health services at the time of care, in addition to a payment made to the provider by the insurer
- Deductible– the amount you pay for covered healthcare services before your insurance plan starts to pay for services
- Cost- Sharing– the share of costs covered by your insurance that you pay out of pocket, which includes deductibles and copays
For example, Elyse pays $250 to her insurance company as her premium for her health insurance plan. This month, she went to the doctor for a sinus infection and payed a $25 copay at the time of service directly to her provider. Elyse’s doctor prescribed an antibiotic that costs $65 which she will have to pay out of pocket because she has not reached her $1,000 deductible yet. This partnership of Elyse and her insurance company both paying for services is an example of cost- sharing.
Public Health Insurance:
Medicare is the federal health insurance program for people who are 65 or older, certain younger people with disabilities, and people with end stage renal disease.
Medicaid provides health insurance for low income individuals of all ages and is administered by federal and state governments, but largely run at the state level. To learn more about the Maryland Medicaid Program visit our website on Maryland Medicaid and Abortion.
Tricare is coverage for those in the United States military or other armed forces, their families, and veterans.
Private Health Insurance:
Most private health insurance companies offer managed care plans where companies place limits on what types of healthcare they will pay for in an effort to cut healthcare costs. There are three main types of managed care plans.
- Health Maintenance Organization (HMOs)– a type of health plan that usually limits coverage to care from doctor who work for or contract with the HMO and will generally only cover out of network care in an emergency situation
- Point-of-service (POS)– a type of plan where you pay less if you use providers that belong to the plan’s network; this type of plan requires you to get a referral from your primary care doctor in order to see a specialist
- Preferred Provider Organizations (PPOs)– a type of health plan where you pay less if you use providers in the plan’s network; you can use providers outside of the network without a referral for an additional cost
What is Obamacare?
Obamacare is actually a nickname for the Patient Protection and Affordable Care Act (PPACA or ACA) that was put into place by former president Obama. The ACA requires insurance companies to expand coverage and provide coverage to more people in the United States, even if they have a preexisting condition. Medicaid coverage for low income individuals was expanded to continue reducing the number of people in the United States without health insurance. The ACA also required private plans to cover recommended preventative services for women like breast cancer screening, pap tests, and contraception.