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Health Plans 2020-2021

What to know when comparing Short Term Medical and Major Medical Plans?

Health insurance is investment protection against large over priced medical bills. Without health insurance, we pay the full cost of the billed amount. An average ER visit without admittance may costs around 10K to the patient. If the patient has health insurance, that 10K could just cost 2K. This is possible because the bill would have been submitted to the patient’s insurance carrier which then reviews and negotiates the bill with the medical facility. Keep in mind the patient must have received care from an in-network provider/facility.

An emergency is a situation that poses an immediate risk to health, life, property, or the environment.

As an insurance broker, I've heard many times from prospects that they do not need health insurance because they never get sick. I've been a broker since 2013 and have worked in the hospitals and doctor offices for 10yrs prior. My passion led to comfortably explaining the importance of being covered and the reality of illness/death.

“I only see a doctor once a year” …… “I can't afford it!” …… “I don't need it.” or “I have never get sick”. These objections are usually from all ages and the need for insurance is placed as the last priority until they actually need it which is usually too late. Insurance isn't just for everyday illness but more for the things we can not see just by looking into a mirror or the accidents we can not predict.

So let's discuss the difference between Major Medical Insurance and Short Term Insurance- Major Medical is what many people know as Employer Medical Insurance or ACA Obama Care but what is Major Medical Insurance?

Major Medical Insurance is insurance that covers doctor visits, hospitals, prescriptions, labs, imaging, and more. It is Insurance that coverers your preexisting conditions and costs a high premium in many cases. It usually has a co-pay, deductible, co-insurance, and an out-of-pocket-maximum. Major medical can be acquired through an employer group plan, ACA Market Place plan, or Individual purchased. Major medical insurance is not required to ask medical questions and is a guaranteed issue. Open Enrollment is annually for major medical insurance. Major medical insurance is obtainable during Nov 1s-Dec 15th annually. This date may vary based on what state you live in and this date does not apply to employer group plans.

ACA is a law that was passed in January 2014, to ensure that a person can not be refused insurance based on pre-existing conditions by insurance companies. An individual can not be charged a higher premium based on their health.

I want to clarify to readers that Obama Care is not the name of health insurance. It is a term used loosely in connection with the Affordable Care Act. All health insurance carriers on the marketplace are privately owned. If a person gets state or federal insurance such as CHIP, Medicare, Medicaid, or TRICARE — these are not privately owned insurance carriers.

Most ACA plans are HMO plans- meaning you need a referral to see a specialist and must stay within the network to get services covered by your insurance carrier. These major medical plans are 12-month plans and are renewable each year.

Major Medical can be obtained through an employer. If obtained through an employer it's much more affordable. That's because an employer pays about 50-80% of the monthly premium. The rest of the premium is subtracted from your paycheck. Enrollment for these plans is usually handled with your HR department and questions should be directed to your HR manager regarding plan selection.

If qualified for Premium tax credit- meaning you meet the poverty guidelines in your state. A single middle age person might obtain the insurance for a 70% discount. This just means the tax credit is paid directly to the insurance company and you are responsible to pay the difference each month from your bank account. Applying for this plan you may obtain the assistance of an insurance agent or broker or contact directly.

If you don't have access to employer coverage and don't qualify for the premium tax credit. You may still purchase major medical but pay the full price. This is done by selecting insurance carriers available in your covered area. If you already know what insurance carriers are available in your area you may sign up directly with that carrier or contact an experienced broker for assistance.

Short Term Medical insurance is insurance that covers doctor visits, hospital, labs, imaging, and sometimes prescriptions. This is usually much more affordable than major medical insurance. Short-term medical is available from 6months to, 12months, or up to 3yrs. Short-term medical plans are usually PPO plans allowing a larger network of providers and no referral required to see specialists. What makes short-term medical plans more affordable are two major factors: 1) Its limitation on coverage for preexisting conditions and 2) does not cover pregnancy. Short-term medical plans do require medical questions, usually 5 -10 questions depending on the carrier. Short-term medical plans are not ACA plans and are not required to comply with certain federal marketplace requirements for health insurance.

Anyone under 65yrs of age can sign up for short-term medical. Individuals, family or groups are able to apply for short-term medical and you may apply at any time during the year. Short-term medical plans usually start the next day or 30days from the application date. Most short-term medical plans do require an application fee which is a one-time fee. This fee is not per person based but per application based.

So how does one decides if a Major Medical or Short Term Medical is a good fit? That all depends on the individual's health needs. No brainer- your health is more important than your wallet. From a professional and personal experience, it's never a bad idea to pay more monthly to save big in the end.

As medical cost rises in America so will monthly premiums for health insurance. Caring for our health by eating healthy, exercising, and limiting the intake of tobacco and alcohol may lower our visits to the doctors' office but it can not protect us from an unexpected fatal illness. COVID-19, who knew! No one knows what tomorrow will bring. COVID puts so many in the hospital and only a few made it home alive. Health and Life Insurance is something everyone should have unless you are a billionaire and can pay cash in hundreds of thousands of dollars in catastrophic fees.

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