A Millennial Guide to Purchasing Health Insurance: Health Insurance Explained

Health insurance plans are a type of insurance coverage that pays for medical and surgical expenses incurred by the insured. It can also provide coverage for other health-related needs, such as preventive care, prescription drugs, and mental health services. Health insurance can be purchased by individuals or provided by employers as part of an employee benefits package, from health insurance companies in Sri Lanka.

Why Health Insurance is Important:

1.      Financial Protection:

●       High Medical Costs: Medical treatments, especially for severe or chronic illnesses, can be extremely expensive. The best health insurance plans in Sri Lanka help cover these costs, protecting individuals from significant financial burdens.

●       Unexpected Illnesses or Accidents: Health issues or accidents can occur unexpectedly. Health insurance ensures that individuals can receive necessary medical care without worrying about the financial implications.

2.      Access to Quality Care:

●       Preventive Services: Health insurance often covers preventive services like vaccinations, screenings, and regular check-ups, which help detect and prevent illnesses early on.

●       Network of Providers: Insured individuals typically have access to a network of healthcare providers, ensuring they receive timely and appropriate care.

3.      Encourages Health Maintenance:

●       Regular Check-ups: With insurance coverage, people are more likely to visit healthcare providers for regular check-ups and seek medical advice, leading to better overall health management.

●       Chronic Condition Management: Health insurance helps manage chronic conditions (e.g., diabetes, hypertension) by covering the cost of medications and ongoing treatments, preventing complications.

4.      Legal Requirement:

●       In some countries, health insurance is mandatory, and failing to have coverage can result in penalties. For instance, the Affordable Care Act in the United States initially mandated that all individuals have health insurance or face a tax penalty.

5.      Peace of Mind:

●       Knowing that one is covered with the best medical insurance plan in Sri Lanka, in case of medical emergencies or health issues, provides significant peace of mind, reducing stress and anxiety related to potential health care expenses.

6.      Subsidised Care:

●       Government programs and employer-sponsored plans often subsidise health insurance costs, making it more affordable for individuals and families.

Types of Health Insurance Plans:

●       Health Maintenance Organisation (HMO): Requires members to use healthcare providers within a specific network and get referrals from a primary care physician for specialist care.

●       Preferred Provider Organisation (PPO): Offers more flexibility by allowing members to see any healthcare provider, but at a higher cost if they go out-of-network.

●       Exclusive Provider Organisation (EPO): Similar to an HMO but does not require referrals for specialist care, though members must still use the network of providers.

●       Point of Service (POS): Combines elements of HMO and PPO plans, requiring a primary care physician but offering some out-of-network coverage at a higher cost.

●       High-Deductible Health Plan (HDHP) with Health Savings Account (HSA): Plans with higher deductibles but lower premiums, often paired with an HSA to save money on a tax-advantaged basis for medical expenses.

Having health insurance is essential as it not only ensures access to necessary medical care but also protects individuals from the potentially devastating financial impacts of medical emergencies and long-term health conditions.

A millennial guide to purchasing health insurance

Health insurance can be confusing, but it is crucial to have coverage to protect your health and finances. Here is a step-by-step guide to help millennials navigate the process of purchasing health insurance:

1.       Understand Why You Need Health Insurance

●       Financial Protection: Medical bills can be expensive. Health insurance helps cover these costs.

●       Access to Care: Insurance provides access to a network of doctors and hospitals.

●       Preventive Services: Most plans cover preventive services like vaccinations and screenings at no extra cost.

●       Legal Requirements: In some places, having health insurance is mandatory, and there may be penalties for not having coverage.

2.      Assess Your Needs

●       Health Status: Consider your current health and any ongoing medical needs.

●       Frequency of Care: How often do you visit the doctor or need prescriptions?

●       Budget: Determine how much you can afford to pay for premiums, deductibles, and out-of-pocket costs.

3.      Learn Key Terms

●       Premium: The amount you pay monthly for your insurance.

●       Deductible: The amount you pay out-of-pocket before your insurance starts to pay.

●       Copayment (Copay): A fixed amount you pay for a covered service, like a doctor's visit.

●       Coinsurance: The percentage of costs you pay after you have met your deductible.

●       Out-of-Pocket Maximum: The most you have to pay for covered services in a plan year.

4.      Types of Health Insurance Plans

●       Health Maintenance Organisation (HMO): Requires using a network of doctors and getting referrals for specialists.

●       Preferred Provider Organisation (PPO): More flexibility to see any doctor, but higher costs for out-of-network services.

●       Exclusive Provider Organisation (EPO): No referrals needed but no coverage for out-of-network care.

●       Point of Service (POS): Combines HMO and PPO features; need referrals but some out-of-network coverage.

●       High-Deductible Health Plan (HDHP) with Health Savings Account (HSA): Lower premiums, higher deductibles; HSAs allow you to save pre-tax money for medical expenses.

5.      Where to Buy Health Insurance

●       Employer: Many companies offer health insurance as a benefit.

●       Marketplace/Exchange: Government-run platforms where you can compare and purchase plans. You may qualify for subsidies based on your income.

●       Private Insurance Companies: Buy directly from insurance providers.

●       Parents' Plan: If you are under 26, you might be able to stay on your parents' health insurance plan.

6.      Compare Plans

●       Coverage: Look at what each plan covers and if your doctors are in-network.

●       Costs: Compare premiums, deductibles, copays, and out-of-pocket maximums.

●       Benefits: Consider extra benefits like dental, vision, mental health services, and wellness programs.

7.      Check for Subsidies and Financial Assistance

●       Subsidies: Based on your income, you may qualify for government subsidies to lower your premiums on the marketplace.

●       Medicaid: If your income is low, you might be eligible for Medicaid, a state-run program offering free or low-cost coverage.

8.      Enrol in a Plan

●       Open Enrolment Period: Typically, once a year, usually in the fall. Special enrolment periods may be available after certain life events (e.g., marriage, birth of a child, job loss).

●       Documents Needed: Have your Social Security number, income information, and details about any current health coverage ready.

9.      Use Your Health Insurance

●       Primary Care Physician: Choose a primary care doctor if your plan requires one.

●       Preventive Care: Take advantage of free preventive services like annual check-ups and vaccinations.

●       Understand Your Plan: Know what's covered and how to use your benefits effectively.

10.  Review and Adjust Annually

●       Annual Review: Each year during open enrolment, review your plan and make changes if your health needs or financial situation have changed.

●       Life Changes: Update your plan if you experience significant life events that affect your coverage needs.

Tips for Millennials:

●       Technology: Use apps and online tools provided by insurers to manage your health and track expenses.

●       Telemedicine: Many plans offer virtual visits with doctors, which can be convenient and cost-effective.

●       Wellness Programs: Take advantage of any wellness programs or incentives for healthy behaviours.

Purchasing health insurance may seem daunting, but understanding your needs, comparing your options, and knowing how to use your coverage will help you make the best choice for your health and budget.