If you don’t have access to health coverage through an employer or another group plan, private health insurance can be a great option for peace of mind. But selecting the right policy can be confusing – MoneyGeek will help match you with the perfect HMO, PPO or EPO plan that meets all your requirements.
Cost
Health insurance is an integral component of many people’s financial planning. It helps cover medical costs such as doctor visits, hospitalization and prescriptions.
The cost of private health insurance varies based on factors like where you live, your age and what services you need. When setting rates across different states, insurers take these elements into account.
In addition to premiums, you may also have to pay deductibles and copayments. Depending on your income level, you may qualify for government-sponsored premium subsidies as well.
Across the OECD, private health insurance accounts for around 10% of total healthcare spending. However, this figure conceals significant regional disparities.
Coverage
Health insurance is one of the most essential financial investments you can make, protecting you from expensive medical bills should you or a loved one ever become ill or injured. With some thoughtful planning, however, you can find private health insurance that meets both your individual needs and budget.
Most Americans have some form of health coverage, either through their employer or the federal government’s Medicare, Medicaid and Children’s Health Insurance Program (CHIP). But there are a variety of private health plans to choose from – each providing different advantages and varying levels of protection.
When selecting health coverage, there are a variety of factors to consider – plan features, providers and costs. Some plans offer multiple tiers with differing benefits and cost-savings options. Furthermore, keep an eye on open enrollment and special enrollment period deadlines in order to make sure you don’t miss out on the coverage that best meets your healthcare and financial requirements.
Taxes
Most people obtain private health insurance through their employer. The federal tax system helps subsidize this purchase by exempting from income and payroll taxes employer payments made for employee premiums.
Estimates place this treatment, estimated to cost more than $250 billion in 2016, at about 30% of the average premium for employment-based coverage. Furthermore, under the Affordable Care Act (ACA), tax credits are offered by the government for people who purchase nongroup coverage through health insurance exchanges.
The federal tax system also assists noninsurance costs associated with medical care by exempting from income and payroll taxes the contributions made by employers and employees to various accounts that permit employees to deduct certain health spending from their taxable wages or salaries. Examples include flexible spending arrangements (FSAs), health reimbursement arrangements (HRAs), and health savings accounts (HSAs).
Minimum requirements
Under the Affordable Care Act (ACA), private health insurance plans must meet certain minimum criteria to be certified by the federal Health Insurance Marketplace and pay federal limits on fees such as deductibles and copays.
If you don’t have minimum essential coverage, you could face a tax penalty of up to $695 per uninsured adult or 2.5% of your income depending on how much you make.
Minimum essential coverage as defined by the Affordable Care Act (ACA) includes Marketplace plans, job-based plans, Medicare/Medicaid and CHIP; additionally there are various national health plans offered by Indian tribes and health care sharing ministries that meet this definition.
Unfortunately, large employers often struggle to meet the ACA’s requirement that their employer-sponsored plans offer “minimum value” and be affordable. Some opt for inadequate coverage with the knowledge that they can avoid a larger employer mandate penalty by offering coverage which is considered subsidized on the exchange.
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