Understanding Health Insurance
Having health insurance usually means you pay a premium every month and, in return, your health plan pays part of the bill when you need a service from a doctor or another provider to keep you healthy or treat a disease. Health insurance usually covers doctors’ visits, prescription drugs, medical, and surgical services.
There are several different ways to get health insurance. Some people buy coverage on their own. Many people get coverage through their job or a family member’s job. Others are covered through public programs like Medicare and Medicaid. State insurance regulators provide oversight for some of these types of health insurance. Different regulatory agencies have responsibility for other types of coverage. Explore the ways to get health coverage below:
Individual Market—Buying Health Insurance on Your Own
When you or your family purchase health insurance and are not part of a group that gets health coverage together (like an employer), you’re considered to have ‘individual market’ coverage. Many people choose to buy individual market coverage through a health insurance marketplace, either Healthcare.gov or their state’s marketplace. Buying through a marketplace allows those who qualify to get premium tax credits to help with the cost of their coverage. An insurance agent or broker can help you choose an individual market plan, or your state may have health insurance ‘navigators’ or other community-based assisters to help you.
While marketplaces only offer health insurance (and dental coverage) that meets certain requirements for benefits and coverage, other types of health insurance are also available to purchase on your own. These other types of insurance cover a more limited set of health care services and may choose not to cover you or charge you more if you have a pre-existing health condition. See a list of Other Types of Health Insurance below.
State insurance regulators help enforce consumer protections and other insurance laws for individual market insurance in their states. To contact your insurance commissioner, click here.
Other Types of Health Insurance
Short-Term, Limited Duration Insurance
This insurance covers some of the same types of services as comprehensive health insurance, but is not required to offer a full set of essential health benefits. The plans typically cover a smaller share of the cost of services than comprehensive health insurance. That means you may pay less in premiums, but enrollees pay more when they need health care services. The plans may deny applicants or charge them more if they have pre-existing health conditions.
Basic Hospital Expense Coverage
This insurance covers a period of usually not less than 31 days of continuous in-hospital care and certain hospital outpatient services.
Basic Medical-Surgical Expense Coverage
This insurance covers costs associated with a necessary surgery, including a certain number of days of in-hospital care.
Hospital Confinement Indemnity Coverage
This insurance pays a fixed amount for each day that you are in a hospital.
Accident Only Coverage
This pays a lump sum when the enrollee experiences death, dismemberment, disability, or hospital and medical care caused by an accident.
Specified Disease Coverage
This insurance covers the diagnosis and treatment of a specifically named disease or diseases, such as cancer.
Long-term Care Insurance
Long-term care insurance usually pays for skilled, intermediate, and custodial care in a nursing home, as well as care in other settings, such as the home, adult daycare center, or assisted living facility. The policy usually pays a fixed amount per day while a person is receiving care.
Other Limited Coverage
You may purchase insurance covering only dental or vision or other specified care.
Other Coverage That is Not Insurance
Health Care Sharing Ministries
Under these arrangements, members pay a monthly fee. When they have health care expenses, members can request that the ministry or other members share part of the cost. However, the ministry is not legally obligated to pay for members’ health care costs. State insurance regulators generally do not provide oversight of health care sharing ministries.
Most nonelderly Americans get health care coverage through employment, either through their own job or a family member’s. Employees and their families usually have a chance to sign up for coverage when starting a new job and once each year during an enrollment period.
State insurance regulators help to oversee insurance plans that employers purchase, often when the employer has fewer than 50 employees. But many employers choose to ‘self-insure’ rather than purchase health insurance. The U.S. Department of Labor generally provides oversight of self-insured employer plans. Other agencies, including the Office of Personnel Management, the Defense Health Agency, and the Centers for Medicare and Medicaid Services, provide oversight when the employer is a government agency.
Many people get health coverage through public programs like Medicare, Medicaid, and the Children’s Health Insurance Program.
The federal Medicare program pays most medical expenses for people age 65 or older and for individuals under 65 receiving Social Security disability benefits. However, Medicare does not pay all expenses. As a result, some Medicare-eligible individuals choose to buy a Medigap policy that helps pay for certain expenses, including deductibles not covered by Medicare.
Medicaid and the Children’s Health Insurance Program are administered by states. Here’s a is the contact for the State of New Mexico.
Auto insurance is one of the most used types of personal insurance. Most states require that you purchase some kind of insurance coverage to drive legally in the state. Auto insurance can be divided into two basic coverage areas: liability and property damage.
Two factors determine what you pay for auto insurance. The first factor is underwriting, where insurance companies assess the risk associated with an applicant. The second factor is rating; the rating assigns a price based on what the insurer believes it will cost to assume the financial responsibility for the applicant’s potential claim.
Most auto insurance policies contain three major parts: liability insurance for bodily injury, liability insurance for property damage, and uninsured/under-insured motorists coverage.
Bodily injury liability insurance protects you against the claims of other people who are injured in an accident for which you were at fault. Their claims for bodily injury may include medical expenses, lost wages, and pain and suffering.
Property damage liability insurance pays for any damage you cause to the property of others. This includes not only damages to other vehicles, but also other property such as walls, fences and equipment. Uninsured motorists coverage protects the policy holder directly. This coverage pays if you are injured by a hit-and-run driver or a driver who does not have auto insurance.
Property damage coverage may include both collision coverage and comprehensive coverage.
Collision coverage pays for physical damage to your car as the result of your auto colliding with an object, such as a tree or another car. This coverage is optional and not required by law. However, collision insurance may be required by your lending institution or lessor. In the case of an accident involving an older car, the cost of repairing the car can quickly exceed the worth of the car. In this case, insurers will “total” the car and pay you what the car was worth rather than fixing it.
Comprehensive coverage pays for damage to your auto from almost all other causes, including fire, severe weather, vandalism, floods and theft. Comprehensive coverage also will cover broken glass, such as windshield damage. You are not required by law to carry comprehensive coverage.
Rental Car Insurance
Car rental companies offer several different insurance options that your existing policy might already cover. They typically offer the following products at the counter:
Collision Damage Waiver (CDW)
Collision Damage Waiver is also referred to as a Loss Damage Waiver (LDW). If you have comprehensive and collision coverage on your own car, you will likely not need this additional protection. (Comprehensive insurance covers vehicular damages caused by accidents such as fire, theft, wind, hail, or a run-in with a deer, vandalism, or theft. Collision insurance covers the cost of repairs or the actual cash value of the vehicle, if damaged in a crash or rollover.) This protection can cost an extra $10-$20 a day.
Liability Insurance covers medical expenses and damages to another person’s property as a result of a car accident caused by the insured’s negligence. If you are adequately insured on your own car, you may consider forgoing this additional liability protection. This supplemental insurance can cost $7-$14 a day.
Personal Accident Insurance
Personal Accident Insurance offers coverage to the renter and passengers for medical bills resulting from a car crash. If you have adequate health insurance and disability income insurance, or are covered by personal injury protection under your own car insurance, you will likely not need this additional insurance. It usually costs about $1-$5 a day.
Personal Effects Coverage
Personal Effects Coverage provides for the theft of personal items inside the rental car. If you have a homeowners or renters insurance policy, it generally covers this already. If you frequently travel with expensive jewelry or sports equipment, it may be more cost-effective to purchase a floater under your home or renters insurance policies so the items are fully protected when you travel. Generally, this coverage costs $2-$5 a day.
Flooding is the most frequent and expensive natural disaster in the United States. Yet, flood peril is not typically covered through most homeowners and renter’s insurance policies.
With more than 20 percent of the National Flood Insurance Program’s (NFIP) claims to come from outside high-risk flood areas, those who live in areas with low-to-moderate flooding risk should understand their risk and consider flood insurance. The FEMA flood map service allows you to determine your flood risk. Risk levels are divided into three categories:
High-risk areas have at least a 1 percent chance of flooding each year. Homeowners in these areas with mortgages from federally regulated or insured lenders are required to buy flood insurance.
Moderate to low-risk areas
Moderate to low-risk areas have less than a 1 percent chance of flooding each year, but there is still a possibility the area could flood. Flood coverage isn’t required in these areas, but it is recommended. Some mortgage lenders still require you to have flood insurance in non-high-risk areas.
Undetermined risk areas
Undetermined risk areas are areas where flood-hazard analysis has yet to be conducted, but risk still exists.