Depending on your budget and medical needs, you likely have some kind of health insurance plan. And while plans vary, most offer the following essential health benefits:
- Outpatient services
- Emergency services
- Maternity and newborn care
- Pediatric services
- Mental health and substance use disorder services, including behavioral health treatment
- Prescription drugs
- Rehabilitative and habilitative services and devices
- Laboratory services
- Preventive and wellness services and chronic disease management
Some of these benefits, such as preventive services, are paid fully by the insurer with no copay (additional payment). However, depending on your plan, you may still be responsible for paying a copay and coinsurance fee.
What are the advantages of health insurance plans?
Health insurance is one of the most important purchases you will make, so it’s important to thoroughly understand the key advantages of a health plan, which include:
- Cashless hospitalization
- Most top insurers have an extensive list of network hospitals all over the country. If you are suffering from a health problem and get admitted to an in-network hospital, you will most likely be able to take advantage of cashless hospitalization.
- This eliminates the traditional claim reimbursement process where you were required to first clear hospital dues and then get them reimbursed from the insurer.
- With cashless treatment, the insurer directly pays medical bills to the hospital. Thus, you will not be required to bear the high treatment costs.
- Financial protection
- The biggest benefit of purchasing health insurance is that it prevents erosion of long-term savings. Because of the rising costs of quality health care, having health insurance means you can avoid one accident or health problem from creating unmanageable debt.
How does health insurance work?
The idea of health insurance is simple: Medical care can be expensive, and most people can pay for it out-of-pocket.
However, if people get insurance as a group, then each person pays a fixed amount every month (even if they don’t need medical care at that time). The risk (such as copay or coinsurance) associated with the insurance plan is also shared by the group. Each person is therefore protected from high health care insurance costs because the burden is shared by many.
Health insurance is now required for everyone in the United States. People who don't have insurance have to pay penalties that increase each year.
Parents can keep their children on a family plan until they are 26 years old. After that, their children will have to get health insurance on their own or through their employer.
What is Medicaid vs. Medicare?
Medicaid is a public state and federal combined health insurance program, which provides health insurance coverage to low-income children and adults who meet certain eligibility criteria. State Medicaid programs may go by different names.
Medicaid covers more mental health and substance use disorders services than Medicare. Eligibility for Medicaid varies in every state, but federal law requires states receiving federal funds for Medicaid to cover:
- Pregnant women and children (younger than 6 years of age) with family income below 138% of the federal poverty level (FPL).
- Children ages 6-18 years with income below 100% of the FPL.
- Parents who are below the state’s welfare eligibility level (often below 50% of the FPL).
- Most older adults and individuals with disabilities, including mental illness, receive federal SSI (generally, 75% of the FPL).
- Medicare is a federal health insurance program that provides coverage similar to private health insurance. Medicare does not cover a broad range of community-based services for people with mental illness. Eligibility criteria for Medicare may include:
- People age 65 years or older.
- Adults with disabilities who have received Social Security Disability Insurance (SSDI) benefits for at least 24 months.
- People with low income (generally 75% of the FPL) and limited assets who are enrolled in Medicare may also be eligible for Medicaid coverage (dual eligibility). They can take advantage of benefits from both types of insurance.
- People with end-stage renal disease.
- 190-day lifetime limit on psychiatric hospital care.
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Centers for Medicaid and Medicare Services. Information on Essential Health Benefits (EHB) Benchmark Plans. https://www.cms.gov/CCIIO/Resources/Data-Resources/ehb