Nobody plans to get sick or hurt, but life frequently ruins those plans. Healthcare costs are very high with a night in the hospital going for around $12,000. Health insurance covers the costs of medical care as well as provides a lot of other valuable benefits like preventative care.
Because our health is one of the most important things we have, and the costs can be astronomical, it’s really important to make good decisions about our health insurance.
It’s also important to take ownership of our healthcare and overall wellness.
As a society, we’ve become too reliant on others to take care of us. We’ve handed over too much of the responsibility to employers and the government. Western medicine alone isn’t enough. And we’re certainly not going to find solutions to the many health problems we’re facing in the form of a pill.
We need to get in control. We need to empower ourselves and become the CEO of our health.
Here’s what we’ll cover:
- What health insurance is
- What you pay
- How you get the care you need
- How to select the right plan for you
- Becoming the CEO of your health
Let’s get started.
What health insurance is
Health insurance covers the costs of medical care as well as provides a lot of other valuable benefits like preventative care. It’s a contract between you and the insurance company to provide certain coverages and benefits as long as you pay a premium.
It provides coverages for medical care, surgery, prescription drugs.
More than two-thirds of Americans get their health insurance from private insurers. More than half of all insurance coverage is employer-provided.
What you pay
There are a lot of moving parts and different costs associated with health insurance and medical care. When evaluating and eventually selecting your plan, make sure you’re taking everything into consideration.
Here are some key terms to be aware of:
Premium
This is the money you pay the insurance company in exchange for the coverage. If you are enrolled in an employer plan, the premium will probably be deducted from your paychecks. If you are looking at coverage outside of your work, you’ll pay the insurance company directly.
Deductible
This is the amount of money you will need to pay “out-of-pocket” each year before the insurance coverage kicks in.
For example, if your deductible is $1,000, you have to pay the first $1,000 of your medical costs yourself before the insurance starts paying.
It’s important to understand which charges go towards your deductible, and which charges do not. Be sure you understand what counts and what doesn’t to avoid frustration and confusion.
Copayment or Coinsurance
This is the money you need to pay to receive a service or get your prescription.
If it’s a set amount (for example, a $25 payment to the doctor), it is called a copayment or copay.
If the amount is a percentage of the cost of the service (for example, 25 percent), it’s called co-insurance.
Like your deductible, it’s important to understand which services or prescriptions will require a copay or coinsurance.
Out-of-Pocket Limit
This is a number that represents the total out-of-pocket amount you’ll be responsible for in a year. Once you reach that number, the insurance will cover all additional costs.
How to get the care you need
Have you ever heard the term “out of network?” It’s when you’ve received care (or attempted to receive care) from a provider that is not on your health insurance company’s list of providers.
Each insurance company and plan has rules around how and who you can obtain services from. It’s essential to understand these rules in order to protect yourself financially while still obtaining the care you need.
Provider Network
This is the term used to describe the medical professionals who have been approved to work with your insurance company. Each plan will have different rules around their provider network, as well as rules around how they’ll pay for care should you desire care from a provider outside of their network.
It’s important to understand the types of provider networks:
Preferred Provider Organizations (PPOs) and Point of Service (POS) plans
and
Health Maintenance Organizations (HMOs) and Exclusive Provider Organizations (EPOs)
Preferred Provider Organizations (PPOs) and Point of Service (POS) Plans
These plans have their approved list of providers, and commonly cover some of the cost of services obtained from outside providers. You may be required to pay higher copays and coinsurance to out-of-network providers.
Health Maintenance Organizations (HMOs) and Exclusive Provider Organizations (EPOs)
As it sounds, these plans usually require you to obtain care from in-network providers only. With these plans, you’ll select a “primary care” doctor who will be the point person for all your care. This primary care doctor will provide you referrals to other specialists for any care you may need.
Preauthorization
With the exception of emergencies, your plan may require you get advance approval before you receive care. Failure to get preauthorization may result in having to pay out-of-pocket for the care you receive.
How to select the right plan for you
Price is what you pay, value is what you get.
There is a lot more that goes into selecting your health insurance plan than the premium. It’s wise to consider as many factors as possible when making your decision.
In terms of premium, it’s commonly true that a lower premium means a higher deductible, and a higher premium means a lower deductible.
Unless you know you have upcoming medical procedures, it can be hard to estimate how much you’ll be spending on healthcare in any given year. It’s always smart to examine your recent history, how much care you’ve needed, and how much you’ve spent.
If you have an existing relationship with a doctor or provider, make sure the plans you’re looking at include them.
If you have a family, make sure all of your family member’s needs are taken into consideration.
Becoming the CEO of your health
No one should be more interested and investing in your health than you. You need to get in control of your healthcare and make good health insurance decisions.
We need to empower ourselves and become the CEO of your health by doing your own research when selecting your plan.
From there, when you need care, research as much as you can and try to get to the root cause of your health problems.
Don’t be afraid to ask questions of your medical professionals and doctors. If you feel like you’re not being heard, or not getting the answers you’re looking for, seek a second opinion.
As the consumer and patient, you have the right to demand great service and care from insurance companies and medical professionals.
You deserve to be happy and healthy.
If you’d like to dig deeper into this, check out our The Right Coverage course.
If you’re ready to take control of your financial life, check out our DIY Financial Plan course.
We’ve got three free courses as well: Our Goals Course, Values Course, and our Get Out of Debt course.
Connect with one of our Certified Partners to get any question answered.
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Here are some applicable episodes of the LifeBlood podcast
- Get Healthy Stay Healthy with Dr. John Kim
- Health for Life with Meghann Hempel
- Weight Loss and Health for Life with Paul Salter
- Health for Life with Dr. Darrell Misak
- Mental Health and Wealth with Melanie Lockert
- Your Mental Health with Alyssa Petersel
- Your Heart’s Health with Judy Feldhausen
- Your Health and Your Environment with Rebecca Clements
- Being Healthy with Peter Koshland
- Get Healthy, Stay Healthy with Nicole Renee
- Get Healthy, Stay Healthy with Peter Koshland
- Get Healthy Stay Healthy with Barton Scott
- Healthy Eating with Karen Mayo
- Get Healthy Stay Healthy with Stevyn Guinnip
- A Healthy Lifestyle with Drew Saenz