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Types of Health Insurance

Posted by in Uncategorized on December 11, 2014

Types of Health Insurance

There are four major types of health insurance coverage that can be purchased.  The first and most common is Group Health Insurance, Under 65 On or Off Exchange Policies, Temporary Policies and Over 65 Medicare Policies.

Group Health Insurance

Is purchased by an employer that actively work for the company and can include both under 65 or over 65 active or retired employees.  The employer typically pays for a portion of the monthly premium.

Under 65 On or Off Exchange Policies

In the under 65 private market your employer CANNOT purchase a policy on your behalf and you must pay after tax dollars for the premium unless you run your own business.

Off-exchange or non-marketplace policies are health insurance polices that are purchased in the private market that are not subsidized by the Federal government.

On-exchange or marketplace place policies are those subsidized by the federal government.  They include things like cost-sharing that reduces your deductible and advanced premium tax credits that help pay for your monthly premiums.

Long-Term insurance which can be purchased both on or off-exchange typically called comprehensive major medical coverage is a permanent insurance policy that has services like:

  • Guaranteed for 12 months or longer
  • Guaranteed renewable
  • Meets the Affordable Care Act requirements, therefore, you would not have to pay a penalty.
  • Essential Health Benefits include:
    • Emergency Services
    • Hospitalization
    • Preventive Services
    • Mental Health and Substance Abuse
    • Prescription Drugs
    • Labratory services
    • Pediatric dental

Short-term insurance which cannot be purchased on-exchange and must be purchased off-exchange can protect you or your family against unexpected medical cost that could result from accidents or illnesses.

  • Can be purchases for 1 – 11 months
  • Not guaranteed renewable
  • Does not meet Affordable Care Act requirements, therefore, you may have to pay a penalty.

Over 65 Medicare

Medicare is a federal health insurance program for people age 65 or older, or people under 65 with certain disabilities.  Medicare has four basic parts that include services like hospitalization, physician services, prescription drugs and more.  There are two main ways to get Medicare coverage through Original Medicare and Medicare Advantage Plans.

Parts of Medicare:

  • Part A: Hospitals
  • Part B: Doctos
  • Part C: Replaces A&B with private insurance
  • Part D: Prescription Drugs

The first way Original Medicare:

Part A:  Pays for things like hospitalization services, inpatient care, skilled nursing facility, or hospice care.  It is typically free.

Part B:  Pays for things like doctor visits and other health care providers, outpatient care, durable medical equipment, home health care, and some preventive services.  There is typically a cost, for 2015 it will cost most people $104.90.

The second way Medicare Advantage:

Part C: Commonly referred to as Medicare Advantage policy is a type of health plan offered by a private insurance company that contracts with Medicare to provide both Part A & Part B benefits.

Part D Drug Coverage:

There are two ways to get prescription drug coverage under Medicare either by adding a Medicare Prescription Drug Plan (Part D) or getting a Medicare Advantage Plan (Part C) such as an HMO, POS or PPO that offers Medicare prescription drug coverage.

Additional Medicare Links:

Additional Ways to Get Insurance:

Medicaid, a social health care program,  for people with low income in the United States.   More information can be found here.  In the state of Illinois there is also a Medicaid program called Illinois All Kids.