Health Insurance 101

Understanding your health insurance options can be very confusing and overwhelming. Open enrollment, COBRA, HMO, PPO, medically underwritten, Obamacare, ACA – Affordable Care Act. What do all these acronyms and terms mean to you? My main objective is to help my clients understand their options so they can make the best decision based on their circumstances and budget.

Types of Health Insurance

There are three primary types of health plans in today’s individual health market.

1.) ACA Major Medical – Affordable Care Act (Obamacare) major medical plans are characterized as having very high monthly premiums, high deductibles, very restrictive HMO networks and comprehensive coverage for major illnesses. Underwriting approval is no longer required… and pre-existing health conditions are required to be covered without any waiting periods. Most carriers have left the ACA market in Texas except for Blue Cross, Molina and Ambetter. This is the only type of plan that is sold through the Health Insurance Marketplace and qualifies for premium subsidies.

2.) Fixed Benefit (Indemnity) PPO – Fixed benefit or indemnity plans are our best-selling plans because of their characteristics that include low premiums, low or zero deductibles, easy underwriting and good coverage for both minor and major medical expenses. These plans are available year-round. These plans pay benefits to ANY doctor or hospital, without any network restrictions. We sell fixed benefit PPO plans from several different carriers. The rates are 40-60% lower than ACA plans because the fixed benefit plans are medically underwritten.

3.) Short Term Medical – These plans give the client major medical level PPO network discounts and access to doctors and facilities. With most STM plans, all expenses are subject to the annual deductible. They last for a fixed period of time (6 or 12 months) and then the client would need to renew their plan periodically. They don’t cover pre-existing conditions or provide wellness coverage at 100% like ACA major medical plans. The rates are 20-30% lower than ACA plans because the STM plans are medically underwritten.

Prescription medication is one of the most over-priced areas of healthcare. There are many options when it comes to prescription coverage. Most plans come with a prescription discount plan, but there’s also several free options. Goodrx.com is always a great option and it’s free. If you’re able to order prescriptions in advance, Northwest Pharmacy is good option. Also, many pharmacies like Walmart, HEB, Walgreens, etc. have prescription programs you can sign up for. Some are free and others have an affordable annual or monthly fee. And always, always, always ask your doctor or pharmacist for the generic.