Why Should You Have Health Coverage?

A stethoscope sitting on top of three hundred dollar bills beside a hypodermic needleHealth insurance is a contract between you and your insurance company. You buy a plan, and the company agrees to pay part of your medical costs when you get sick or hurt.

There are other important benefits of health insurance. Plans available in the Marketplace(and most other plans) provide free preventive care, like vaccines, screenings, and check-ups. They also cover some costs for prescription drugs.

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Health insurance protects you from high, unexpected costs

Did you know the average cost of a 3-day hospital stay is $30,000? Or that fixing a broken leg can cost up to $7500? Having health coverage can help protect you from high, unexpected costs like these.

How health insurance coverage works

When you have insurance, you pay some costs and your insurance plan pays some:

• Premium. A premium is a fixed amount you pay to your insurance plan, usually every month. You pay this even if you don’t use medical care that month.

• Deductible. If you need medical care, a deductible is the amount you pay for care before the insurance company starts to pay its share. Once you meet your deductible, your insurance company begins to cover some costs of your care. Some plans have lower deductibles, like $250. Some have higher deductibles, like $2000. Many plans provide preventive services, and sometimes other care, before you’ve met your deductible.

• Copayment. A copayment is a fixed amount you’ll pay for a medical service after you’ve met your deductible. For example, after meeting your deductible you may pay $25 for a visit to the doctor’s office that would cost $150 if you didn’t have coverage. The health plan pays the rest.

• Coinsurance. Coinsurance is similar to copayment, except it’s a percentage of costs you pay. For instance, you may pay 20% of the cost of a $100 medical bill. So you would pay $20 and the health plan would pay the rest.

How insurance protects you

Insurance coverage protects you from high medical costs 2 ways:

• Out-of-pocket maximum. This is the total amount you’ll have to pay if you get sick. For example, if your plan has a $3000 out-of-pocket maximum, once you pay $3000 in deductibles, coinsurance, and copayments the plan will pay for any covered care above that amount for the rest of the year.

• No yearly or lifetime limits. Health plans in the Marketplace can’t put dollar limits on how much they will spend each year or over your lifetime to cover essential health benefits. After you’ve reached your out-of-pocket maximum, your insurance company must pay for all of your covered medical care with no limit.

People without health coverage are exposed to these costs. This can sometimes lead people without coverage into deep debt or even into bankruptcy.

For more information, visit HealthCare.gov.

Many Young People Lack Health Coverage

The good news? The number of young adults without health care coverage in the United States has declined significantly over the past few years, according to a new government report released Tuesday.

Not-so-good are the findings that: 45.5 million people, 14.7 percent of the American population, still don’t have health care coverage, and 4.9 million kids under the age of 18 also lack health insurance.

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The U.S. Centers for Disease Control and Prevention’s National Center for Health Statistics used data on 108,131 people contacted for the 2012 National Health Interview Survey to compile the latest profile on health insurance coverage.

Of immediate interest was the apparent impact of the Affordable Care Act, President Obama’s landmark health reform law passed in 2010.

The new report found that 27 percent of young adults between the ages of 19 and 25 had no health care coverage in 2012, down from more than 35 percent in 2010, according to report co-author Robin Cohen, a CDC health statistician.

At the same time, the number of young adults covered by a private health plan increased, from 49 percent in 2010 to 58 percent in 2012.

Health policy experts said the increase is most likely due to a provision in the Affordable Care Act (ACA) that allows young adults to remain on their parents’ health insurance plan up to age 26.

By comparison, the number of uninsured adults aged 26 to 35 remained the same at 27 percent between 2010 and 2012. There also was no big difference in private coverage for this age group, which was about 59 percent in both 2010 and 2012.

The effectiveness of this single provision of the Affordable Care Act should give hope to the 45.5 million Americans still without health insurance in 2012, said Sara Collins, vice president for affordable health insurance at the Commonwealth Fund, a health policy think tank.

That’s because most of the major provisions of the ACA take effect in 2014, including the opening of the health insurance exchanges and a major expansion of Medicaid.

The continuing need for health reform is reflected in another part of the CDC report, which found that enrollment in high-deductible health plans increased from 29 percent in 2011 to 31.1 percent in 2012.

In addition, the report found, more than 50 percent of those who had private health insurance not offered through employment were enrolled in a high-deductible plan.

The Affordable Care Act includes protection against high deductibles and copayments, particularly for low-income families. One of the policies ACA addresses is to make sure that people don’t get hit with higher and higher out-of-pocket costs.

The report also showed:

  • While there were 45.5 million people uninsured at the time of the interviews in 2012, 57.7 million (18.6 percent) had been uninsured for at least part of the year prior to interview, and 34.1 million (11.1 percent) had been uninsured for more than a year at the time of interview.
  • Hispanics were more likely than whites, blacks or Asian Americans to be uninsured. More than one-quarter of Hispanics who were interviewed were uninsured at the time, and one-third had been uninsured for at least part of the year before that.
  • Among the 43 states included in this report, the percentage of uninsured individuals ranged from 4.8 percent in Massachusetts to 20.9 percent in Oklahoma, South Carolina and Texas.