When choosing the right health insurance plan for your specific needs and budget, it’s important to consider all the options available to you. However, we understand that this is easier said than done, and that there are a lot of confusing factors to keep in mind.

Whether you’re trying to find the best type of plan to choose through your employer-sponsored coverage, or you’re just beginning to look into your individual health insurance options, this guide aims to breakdown the basics and provide you with additional resources to supplement your insurance journey.

Why health insurance matters

Health insurance is crucial as it provides financial protection against high medical costs, ensuring access to necessary healthcare services without the burden of unmanageable expenses. It covers essential health benefits, including preventive care, which can detect health issues early and lead to better health outcomes. Health insurance also offers peace of mind, knowing that you and your family are protected in case of unexpected illnesses or accidents. In many cases, it enables access to a broader network of healthcare providers and specialists, ensuring timely and quality medical care. Essentially, health insurance is a key factor in maintaining overall health and well-being, while safeguarding against the financial risks associated with healthcare.

How health insurance works

Health insurance works by having you pay a monthly premium to maintain your coverage. In return, the insurance company helps cover the costs of your medical care. You’re also responsible for paying up to a certain deductible, which is the amount you pay for covered healthcare services before your insurance plan starts to pay. After you’ve met your deductible, your insurance typically begins to share the cost of services. This basic structure allows you to access necessary medical treatments and services at a more manageable cost, protecting you from the full financial burden of healthcare expenses.

Types of health insurance plans

There are several different types of insurance plans you can buy to get coverage for health and other care like routine vision or dental.

Here is an overview of the different types of coverage you can buy:

• Employer-sponsored: This health insurance coverage is also called group or small group coverage. This is the type of health insurance you usually get through work. Group health insurance allows you to split the cost of your monthly premium with your employer, and you’ll pay other cost-sharing payments.
• Individual and Family Plans: This health insurance is coverage you enroll in by yourself. These plans, also called Affordable Care Act (ACA) plans or Obamacare plans, are available to everyone. You can either buy them through your state or federal marketplace, health insurance companies, or brokers like eHealth.
• Other: In addition to these most common types of health insurance, there are some other types of health insurance that either require special circumstances to qualify for or only cover specific needs (accident insurance, Medicaid, CHIP, etc.). Check out eHealth’s resource center to find out more about all health insurance plan types or contact a licensed agent with eHealth if you’re not finding what you’re looking for.

Plan Type	Snapshot	Do you have to stay in-network to get coverage?	Do procedures & specialists require a referral?
HMO: health maintenance organization	This is a type of health insurance plan that emphasizes preventive care and offers healthcare services through a network of designated doctors and hospitals. When you enroll in an HMO, you typically select a primary care physician (PCP) who becomes your main healthcare provider. However, the trade-off is less flexibility in choosing healthcare providers outside of the HMO network.	HMOs generally require you to seek care within their network, except in emergencies, and are known for offering lower premiums and minimal copayments.	Your PCP coordinates most of your healthcare needs, including referrals to specialists within the HMO network.
PPO: preferred provider organization	While PPOs generally have higher premiums and deductibles than HMOs, they provide broader access to healthcare providers, both in and out of network. For more details on the differences between HMOs and PPOs, it’s helpful to consider factors like network size and cost.	This plan type offers greater flexibility in choosing healthcare providers.	This plan type usually doesn’t require referrals to see specialists.
Medicare	Medicare is a federal health insurance program that insures seniors aged 65+. Beneficiaries can choose to get their coverage through a private insurance company with a Medicare Advantage plan, also called Medicare Part C, or through the government. If they stick with Original Medicare, they can get extra coverage with a Medicare Supplement Insurance plan and prescription drug coverage through Medicare Part C. If you qualify for Medicare, you can find more information or shop for Medicare plans with eHealth.	With Original Medicare, you can typically see any doctor who accepts Medicare without network restrictions; however, Medicare Advantage plans often require you to stay within a network of approved providers for covered care.	No, typically a referral is needed for specialists with Original Medicare, but many Medicare Advantage plans, particularly HMOs, may require referrals for specialists and certain procedures.
Short-term	Enrolling in short-term, or temporary, health insurance plans can help bridge any gaps in coverage you may have for short periods of time (This is a temporary form of coverage, only for up to 3 months).	N/A   Doesn’t have to meet Federal standards for comprehensive health coverage	N/A Might not cover things like prescription drugs, preventive screenings, maternity care, emergency services, hospitalization, pediatric care, physical therapy & more
Dental	Most medical insurance does not cover routine dental care. In order to get insurance for things like cleanings or root-canals you’ll need to enroll in a separate dental insurance plan.	For dental insurance, staying in-network generally ensures coverage and lower out-of-pocket costs, though some plans may offer partial coverage for out-of-network providers.	Many dental insurance plans do not require referrals for specialists like orthodontists or oral surgeons, but it’s best to check your specific plan details as policies can vary.
Vision	Most medical insurance does not cover routine vision care. In order to get insurance for things like eye exams, glasses, and contacts you’ll need to enroll in a separate vision plan.	For vision insurance, using in-network providers typically maximizes your benefits and minimizes out-of-pocket expenses, although some plans might offer limited coverage for out-of-network services.	Referrals are generally not required for seeing specialists with vision insurance, allowing you to directly schedule appointments with providers like ophthalmologists or optometrists as needed.

HSAs, HRAs and FSAs

You may have seen these other acronyms when shopping for health insurance or looking through your benefits package through your job.

HSAs and HRAs both help you pay qualified medical expenses, such as:

• Most medical care
• Most dental care
• Most vision care
• And Over-the-counter drugs

While they both help you pay for medical expenses, they are very different:

• HSAs, or Health Savings Account, is a tax-advantaged account owned by an individual with a high deductible health insurance plan. Both the person on the account and their employer can contribute a certain amount of money to the account each year.
• HRAs, or Health Reimbursement Arrangements, are employer-funded plans where employees can be reimbursed by their employer for qualified medical expenses and insurance premiums. These are not bank accounts, they are an agreement between employee and employer.
• Another notable difference between HSAs and HRAs is that because HSAs are owned by the employee, they stay with them even if they chose to leave their job. You can learn more about the differences between HRAs and HSAs in our more detailed article.

A Flexible Spending Account (FSA) is an employer-sponsored benefit that allows employees to set aside pre-tax dollars from their paycheck to pay for eligible healthcare expenses. Here’s a detailed overview of FSAs:

1. Pre-Tax Benefit: Contributions to an FSA are made with pre-tax dollars, reducing taxable income. This results in potential tax savings for the employee.
2. Eligible Expenses: FSAs can be used for various out-of-pocket healthcare costs, including deductibles, copayments, prescriptions, and certain medical equipment. Some FSAs also cover vision and dental expenses.
3. Annual Contribution Limits: The Internal Revenue Service (IRS) sets annual contribution limits for FSAs. For 2023, the limit is $2,850 per year, but this may change annually.
4. Employer Connection: FSAs are employer-established and tied to the employer. They are typically offered as part of a benefits package, and not all employers offer them.
5. Use-It-Or-Lose-It Policy: One key aspect of FSAs is the “use-it-or-lose-it” rule. Funds not used by the end of the plan year (or grace period, if provided by the employer) are forfeited, unlike HSAs where funds roll over.
6. Portability: FSAs are not portable, meaning if you change jobs, you generally cannot take the FSA with you. This contrasts with HSAs, which are owned by the individual and remain with them regardless of employment changes.
7. Availability: FSAs are only available to employees whose employers offer them as part of their benefits package.

Comparatively, FSAs and HSAs/HRAs have some similarities but also key differences. Both FSAs and HSAs offer tax advantages on contributions used for eligible healthcare expenses. However, HSAs are available only to individuals with high-deductible health plans (HDHPs) and are portable and rollover year to year, whereas FSAs are tied to the employer and have a use-it-or-lose-it policy. HRAs, like FSAs, are employer-funded, but the employer controls the HRA funds, and they can decide whether the funds roll over each year. In contrast, the employee controls FSA funds, within the limits set by the employer and IRS regulations.

When to enroll in health insurance

Depending on the type of health insurance you are looking for and other relevant circumstances in your life, you may be able to buy health insurance at any point in the year, or you may have to wait until the Open Enrollment Period, which is the annual period when you can enroll in ACA major medical health insurance plans. Open enrollment periods may vary by state, so check out the full list of Open Enrollment Periods by state to see when you’ll be able to find an ACA plan.

That being said, if you experienced a qualifying life event (loss of employer-sponsored health insurance, divorce, relocation to a new coverage area, etc.) you may be eligible for a Special Enrollment Period, which would allow you to sign up for an ACA plan outside of OEP.

Additionally, Medicare has a separate Annual Election Period, and many other types of insurance plans, like short term health insurance plans, can be purchased year round. If you have specific questions on when you can sign up for specific health insurance plans, the eHealth team can help you figure out when you can purchase the right plan for you.

Choosing the right health insurance plan

Choosing the right health insurance plan involves several key considerations to ensure it aligns with your individual needs and circumstances:

1. Availability: If your employer does not offer health insurance, you’ll need to explore alternative options such as purchasing individual coverage through the Health Insurance Marketplace, where you may qualify for subsidies based on your income, or investigating state-specific programs and private insurance providers to find a plan that meets your healthcare needs and budget.
2. Cost: Evaluate the plan’s premiums, deductibles, copayments, and out-of-pocket maximums. Balancing the monthly premium cost with potential out-of-pocket expenses is crucial to ensure affordability.
3. Family Needs: If you’re selecting a plan for your family, consider each member’s health needs. Plans with broader coverage might be more suitable for families with children or with varied health requirements.
4. Healthcare Needs: Consider your personal healthcare needs, including the frequency of doctor visits, any ongoing treatments, and potential future healthcare requirements.
5. Prescription Coverage: If you regularly require prescription medications, check the plan’s coverage for prescriptions, including any specific medications you need.
6. Provider Network: Look at the plan’s network of doctors, hospitals, and clinics. Ensure your preferred healthcare providers and facilities are in-network to avoid higher out-of-pocket costs.
7. Additional Benefits: Some plans offer extra benefits like dental, vision, or wellness programs. Consider if these additional services are important for your overall health and well-being.

Making an informed decision involves weighing these factors against your budget and health priorities to find a plan that offers the best value and coverage for your specific needs.

Health insurance for different life stages

Health insurance is a vital consideration at every stage of life, as healthcare needs and financial situations evolve over time. Each life stage brings unique health challenges and priorities, making it important to choose a plan that aligns with your specific circumstances:

1. Young Adults: In early adulthood, you might prioritize affordability and basic coverage, especially if you’re generally healthy. Plans with lower premiums and higher deductibles could be suitable.
2. Family Planning: If you’re considering starting a family, look for plans that cover prenatal care, childbirth, and pediatric care.
3. Mid-Life: As you age, you may require more regular healthcare services. Plans with comprehensive coverage and lower deductibles can be more beneficial.
4. Seniors: With retirement, you might transition to Medicare. At this stage, focus on plans that cover chronic conditions, long-term care, and higher frequency of medical visits.

Understanding how your health insurance needs change at each life stage ensures continuous and adequate healthcare coverage, contributing to overall well-being and financial security.

Common health insurance terms and definitions

There is plenty of confusing health insurance industry jargon that you’re bound to encounter when you’re shopping for coverage. Let’s define some of these key terms:

• Premium: Your premium is the amount of money you pay to your health insurance company each month to stay enrolled in your plan and keep your coverage.
• Deductible: This is the amount of money you must pay out-of-pocket before your health insurance starts paying for health care services.
• Copay: Copays are types of cost sharing payments you may have to make out-of-pocket when you receive certain health care services or medications. They’re typically a flat rate; for example, $10 per doctor’s visit or $15 for certain medications.
• Coinsurance: Coinsurances are another type of cost sharing payment you may have to make out-of-pocket when receiving certain health care services or Medications. These are usually in the form of a percentage. For instance, let’s say you have a 10% coinsurance for a doctor’s visit that costs $100. You will pay $10 for every $100 your insurance pays for a doctor’s visit.
• Out-of-pocket maximum: This is a cap on how much you’ll have to pay out of pocket for health care in one year. After you reach this amount your insurer will pay for your covered care in full for the rest of the year. For example, if you have a $44,000 out-of-pocket limit and you’ve met your $4,000 deductible and paid $40,000 in other cost-sharing payments (like copays or coinsurances), you’ve met your limit and your insurance company will pay for any covered care for the rest of the year. Affordable Care Act compliant plans require all major medical health insurance plans to have an annual out-of-pocket maximum for each beneficiary.

MMR 1976 2024