Health Insurance: Scam or Savior?
By: Aarti Contractor
Health insurance is a necessity for those who worry about paying the extremely high cost of healthcare. Certain groups can get by without needing health insurance: those who are very poor, or on the other end of the spectrum, those who are very rich. In addition, those who are aged 65 or older don’t have to worry about paying their expensive monthly health insurance. The reasons these groups can go without health insurance is because the very rich can afford to pay the full cost for these expensive medical procedures, the very poor can get help from Medicaid, and the elderly population, aged 65 and older, can qualify to receive help from Medicare.
Medicaid and Medicare are two programs in place to help pay for the cost of healthcare. Medicaid is a program to help those who are poor and in need of financial assistance. Medicaid collects money from taxes, and then disperses the money to those in need. On the other hand, Medicare is a program to help senior citizens aged 65 and older, and those under the age of 65 who have disabilities. The money for Medicare comes out of paychecks as a Medicare tax. Usually, they are cut from your paycheck automatically, and you pay into the system and reap the benefits at 65.
Health insurance plans have several different aspects. There is a monthly premium, a deductible, co-payment, and co-insurance. Insurance companies create these payments to discourage people from going to the doctor every time something happens. A premium is a monthly fee that needs to be paid regardless of whether you have made a trip to the doctor or have not. A deductible is a certain amount that must be charged before the insurance company will help with payments. This deductible resets each year which means on January 1st, you start fresh on trying to reach your deductible that year. A copayment is the out-of-pocket money you need to pay for a doctor’s visit, a prescription, or a hospital visit. However, until the deductible is met, you have to pay the full price and receive no assistance. Lastly, co-insurance is the percentage you have to pay for procedures.
There are many different types of insurance plans that are available for people to choose from. There is a high deductible and low premium plan where your monthly fee is less, but you are paying 100% of costs for a longer time because your deductible is higher and takes longer to reach. This means that you will have a higher copayment and higher co-insurance. People may opt for this plan if they know that they do not visit the doctor frequently, and they know they will only have to pay the high co-payment and co-insurance costs a few times. On the contrary, there are insurance plans that are the exact opposite of the plan just mentioned. These plans are high premium and low deductible plans. They also come with lower copayments and coinsurance prices. Customers that this plan appeals to are those who have serious medical issues, or those that know they frequently tend to visit the doctor or hospital. This plan is beneficial to them because the higher premium that they are paying each month allows them to have lower copayments and coinsurance, making it the cheaper plan for them.
Gorin, S. H. (2010). Does Health Insurance Matter? Health beyond Universal Coverage. Health & Social Work, 35(2), 83–85. doi:10.1093/hsw/35.2.83
Health coverage for immigrants who are U.S. citizens or U.S. nationals. (n.d.). Retrieved from https://www.healthcare.gov/immigrants/us-citizens-and-nationals/
The official U.S. government site for Medicare. (n.d.). Retrieved from https://www.medicare.gov/
