Understanding health insurance is one of the most complicated concepts in the United States. Determining the type of coverage each individual truly needs is just one piece of the puzzle. Each company has its own nuances that may be beneficial to some while not beneficial to others. To complicate things even further, there is a difference between public insurance and private insurance. Learning the difference and understanding which is more beneficial to you and your family will help make choosing a health insurance provider a less daunting task.
Public health insurance is also known as the exchange. This is Healthcare.gov or each state’s health insurance exchange. These plans are the ones in which national companies provide through the public marketplace at seemingly lower rates, assuming the users are eligible for government subsidies.
It is always best to start with the positive. Therefore, there are several benefits to purchasing public health care options from the exchange. First, these are government regulated, which means they must offer healthcare that meets each government regulation defined under the Affordable Care Act. As a result, the plan will offer benefits that most people actually need.
Another amazing benefit of purchasing public health care is that it is actually affordable for lower-income families. Once you go to the government website, you will be asked a series of questions. These questions include information about your family size, income, and whether your employer offers health insurance coverage. Depending on your answers, you may be eligible for subsidies that will significantly lower your out-of-pocket cost for the policy or even waive any fees associated with health care coverage premiums.
In contrast, these plans are often high deductible plans, meaning you will have to spend a significant amount of money out of pocket prior to seeing any real insurance benefits. Furthermore, if you do not qualify for the subsidies, you are going to find the plans quite costly for very little benefit.
Private Insurance Options
Private health care insurance is purchased anywhere except the marketplace. This means you can research insurance options and determine the best company for your needs. You then have the option to contact that insurance provider directly to purchase insurance. Other options include working with a broker who can provide you with all of your insurance options and help you decide what plans and provider is most suited for your insurance needs. There are even private insurance exchanges that allow you the option to choose a provider best suited for your needs.
While private insurance offers high deductible, lower premium plans similar to those on the marketplace; these plans are not all that is offered through these types of carriers. For higher premiums, you may be able to purchase an insurance policy that offers lower deductibles and co-pays. Furthermore, you may be able to receive additional benefits that may be unavailable under the plans within the marketplace, such as more out-of-network options.
Making the Choice
Making a choice between public and private healthcare is a personal decision. It is important to understand that under the new tax plan, penalties will no longer be issued to those individuals who do not carry insurance. That being said, if you are not covered under an employer plan, you must look at the pros and cons of health coverage through the private and public marketplace or choosing to self-insure as an alternative.
For people with children or medical concerns, health insurance is truly a necessity.
Suppose you are a low-income family who needs health insurance. In that case, it is likely more appropriate to work with a public health care policy that can be affordable, provided you are eligible for the government subsidies. Once you begin reviewing the public policies available, you can make an educated decision for the type of policy you require, given your family circumstances and needs.
However, if you are within the middle to higher income brackets that would not receive a government subsidy, it is best to consider a private insurance plan. Considering that private plans are not eligible for subsidies, you must ensure you would not be eligible for subsidies under the federal marketplace as an individual or family. Assuming that is the situation, you would be better covered by purchasing a private insurance plan that you can afford. Consider a higher premium plan with lower deductibles if that is an affordable option for your family.
To learn more about public and private health care options, contact us! Our licensed health insurance experts will be happy to answer any questions you have.