The Health Insurance Marketplace is coming to Arizona this fall. Through the Marketplace, uninsured individuals and small businesses in Arizona will be able to purchase coverage that may have been unaffordable or even unobtainable in the past.
People sometimes ask why they need health coverage in the first place.
No one plans to get sick or hurt, but most people need medical care at some point. Health insurance covers these costs and protects you from very high expenses.
Health insurance is a contract between you and your insurance company. You buy a plan, and the company agrees to pay part of your medical costs when you get sick or hurt.
There are other important benefits of health insurance. Plans available in the Marketplace (and most other plans) will provide free preventive care like vaccines, screenings, and check-ups. They’ll also cover some costs for prescription drugs.
Did you know the average cost of a three-day hospital stay is $30,000? Or that fixing a broken leg can cost up to $7,500? Having health coverage can help protect you from high, unexpected costs like these.
When you have insurance, you pay some costs and your insurance plan pays some. Here are some costs that you typically pay:
• Premium. A premium is a fixed amount you pay to your insurance plan, usually every month. You pay this even if you don’t use medical care that month.
• Deductible. If you need medical care, a deductible is the amount you pay for care before the insurance company starts to pay its share. Once you meet your deductible, your insurance company begins to cover some costs of your care. Some plans have lower deductibles, like $250. Some have higher deductibles, like $2,000. Many plans provide preventive-care services, and sometimes other care, before you’ve met your deductible.
• Copayment. A copayment is a fixed amount you’ll pay for a medical service after you’ve met your deductible. For example, after meeting your deductible you may pay $25 for a visit to the doctor’s office that would cost $150 if you didn’t have coverage. The health plan pays the rest.
• Coinsurance. Coinsurance is similar to a copayment, except it’s a percentage of costs you pay. For instance, you may pay 20 percent of the cost of a $100 medical bill. So you would pay $20 and the health plan would pay the rest.
Insurance coverage protects you from high medical costs two ways:
• Out-of-pocket maximum. This is the total amount you’ll have to pay if you get sick. For example, if your plan has a $3,000 out-of-pocket maximum, once you pay $3,000 in deductibles, coinsurance, and copayments, the plan will pay for any covered care above that amount for the rest of the year.
• No yearly or lifetime limits. Health plans in the Marketplace can’t put dollar limits on how much they’ll spend each year or over your lifetime to cover essential health benefits. After you’ve reached your out-of-pocket maximum, your insurance company must pay for all of your covered medical care with no limit.
People without health coverage are exposed to these costs. This can sometimes lead people without coverage into deep debt or even into bankruptcy.
To receive email updates on Arizona’s Health Insurance Marketplace, go to www.Healthcare.gov. Enrollment begins Oct. 1, with coverage starting Jan. 1, 2014.
By the way, if you have Medicare, don’t worry about the Health Insurance Marketplace. It’s only for individuals and small businesses that don’t have insurance now.
• David Sayen is Medicare’s regional administrator for Arizona, California, Hawaii, Nevada, and the Pacific Territories. Get answers to your Medicare questions by calling 1-800-MEDICARE (1-800-633-4227).