What Does Health Insurance Cover?
You will find that health insurance coverage ranges pretty widely from one insurance provider to the next, and even between the individual plans offered by a provider. But while your exact options vary, there are some mandatory coverage standards that every health insurance policy must provide.
Thanks to the Affordable Care Act, there are 10 categories of health services that all healtcare.gov insurance plans are required to cover, called Essential Health Benefits. These include pregnancy and childbirth services, prescription drug coverage, mental health services, outpatient hospital care, preventative care, emergency services, and more. Plans must also provide dental coverage to minors (adult dental coverage is optional).
The exact details and limits of this coverage may differ from one state to the next. Also, large companies that self-insure employees are not required to follow these same standards, though many still do. You’ll want to check with your employer’s plan to see exactly what is covered if you are offered health insurance through your job.
Is Health Insurance Required?
When the Affordable Care Act was first passed, it included a health insurance mandate; if you could afford adequate health insurance (“minimum essential coverage”) throughout the year but chose not to purchase it, you were required to pay a penalty fee. This fee was usually charged when it came time to file that year’s taxes and was imposed on everyone in your household who did not meet the minimum healthcare requirements.
Beginning with the 2019 plan year, however, this penalty—called the Shared Responsibility Payment—was reversed on a federal level. You are no longer responsible for this fee if you choose not to carry minimum coverage, and no exemption is necessary to avoid the penalty.
However, there are some states that still have their own health insurance coverage requirements. Be sure to check the laws in your state of residence to see what level of insurance you’re required to carry and what penalties, if any, apply for not meeting these minimum standards.
How to Determine the Best Health Insurance Plan?
Buying health insurance can be an arduous and confusing process, especially when there are so many options and costs to consider.
There are a few questions to ask yourself if you want to make the search a bit easier. They include:
- Does my employer offer coverage or will I need to shop the Health Insurance Marketplace? A workplace plan, if offered, may be more affordable than buying a private plan.
- How often do I anticipate using my coverage? If you only see the doctor for routine/preventative care, you’ll need a very different plan than someone who has a chronic condition or a child with special needs.
- What sort of costs can I expect to encounter? You typically have two options to choose from: a high deductible or higher premiums. If you don’t expect to use your coverage much—and can afford the out-of-pocket cost if you do wind up needing serious care—a plan with a high deductible can save you money all year long. On the other hand, if you and your family are at the doctor’s office often, paying a bit more for premiums in exchange for a lower cost-share/deductible may be the less painful option.
- Will I be able to see my same doctor(s)? If you enjoy seeing your current providers, you’ll want to make sure that they accept your new plan before switching, or you’ll need to find new doctors.
- What if I need emergency care (especially when traveling)? Be sure to read the fine print and coverage options before picking a plan, particularly if you’re often in other states. Some plans have stricter guidelines than others when it comes to seeking care while away from home.
Depending on whether you are choosing an employer-based plan or shopping on the Marketplace, you may also want to compare PPO vs. HMO options. You should also consider whether you need a plan that also provides dental and/or vision coverage.
How Much Does Health Insurance Cost?
As with any insurance product, there are countless personal factors that go into calculating your cost for coverage. When it comes to health insurance premiums, you also have to take into account the difference between employer-sponsored plans and those purchased on the Marketplace, the difference between coverage for a single person and that for a family, and whether your income qualifies you for a tax credit on your Marketplace plan premiums.
There are a few factors that go into calculating your health insurance cost across the board, though. These include your age, location, plan category, individual vs. family enrollment, and whether or not you’re a tobacco user.
For instance, whether you’re buying an employer-sponsored plan or one on the Marketplace, you can expect your premiums to go up by as much as 50% if you smoke or vape. When you consider that annual healthcare premiums are already an average of about $7, 470 for single folks and $21,324 for families, an extra 50% could feel significant.
How We Chose the Best Health Insurance Companies
We examined the 126 health insurance plans that were top-rated by NCQA, the National Committee for Quality Assurance, a non-profit rating group, and aggregated them by insurance company. We then narrowed the list to companies that had highly rated plans available in multiple states. To make the best list, most companies also had to have at least an A- financial rating from AM Best, Fitch, or Standard & Poor’s.
We then took a qualitative look at our nine highly rated companies to identify special strengths that might appeal to the priorities of different types of consumers. We examined how the companies were rated in NCQA subcategories, in the 2020 ACSI (American Customer Satisfaction Index) survey of roughly 500,000 consumers, and in the 2021 J.D. Power customer satisfaction survey of 32,066 commercial health plan members. We looked at company profiles and Top Ten Reviews to evaluate the depth and breadth of the company’s coverage offerings and pricing for individual and employer-based insurance, Medicare Advantage, and other types of policies.
We also looked at availability—the number of doctors, hospitals, and medical systems that contract with (or accept) a particular insurance company’s coverage—and types of coverage offered. And we considered where these insurance companies operate and whether plans can be purchased on healthcare.gov.
Pricing was an important factor in our consideration, and lastly, we considered the number of plans offered and what sort of coverage limits consumers were able to choose from while shopping around for their health insurance.