The exorbitant health care price in the U.S. make it difficult for you to afford it without having proper health insurance coverage. Thus, you need to be careful and cautious while buying health insurance and should purchase a plan that meets your healthcare needs. Buying health insurance is not simple, it is a time-taken process that requires careful searching, comparison, and analysis of different health plans to make smart decisions. While out for health insurance shopping, you will be exposed to mainly two types of plans, public and private health insurance plans. Both these types of plans have their own provisions and come with their own set of benefits and disadvantages.
Private health insurance is health insurance coverage offered by a private entity instead of the federal or a state government. Whereas public health insurance is a program run either by federal, state, or local government and the government covers some or all of the people’s healthcare costs. According to the U.S. Census Bureau, the majority of the Americans are enrolled in a private health insurance plan, and the rest may have health coverage through a government program like Medicare or Medicaid. Besides these, even employer-based coverage is also common among people. It is essential for you to understand the basic difference between public and private health insurance plan, so you can opt for the best coverage for yourself and your family.
A Closer Look on Public vs Private Plans
Public health insurance plan is managed and funded by a federal or state government, and you may obtain a public health plan either free or by paying a certain premium amount. The two most popular public health insurance plans in the U.S. are Medicare and Medicaid. Medicare Part A is a public health insurance plan that you can obtain free of cost whereas you are required to pay a premium for Medicare Part B.
A Private health insurance plan is not managed and offered by a federal or state government, instead, it is managed by a private entity. You can obtain a private health insurance plan either through your employer, your state’s marketplace or directly from an insurance company.
Cost of Private Health Insurance Plans
Health insurance companies decide on the premium cost of private plans based on the following factors:
Age – Your private health plan premium will depend upon your age. The health insurance premium is more for older people, as they will likely need more healthcare services. Taking this into account, health insurance companies charge higher premiums from older plan members.
Location – The area in which you live will also affect your health insurance cost. There is a certain level of competition among insurance companies in every area, and so depending upon the competition in your area the cost for the health plan will be determined.
Tobacco Use – If you have the habit of consuming tobacco or smoking, then you will have to pay more premium compared to a person who doesn’t consume tobacco. Since smoking and using tobacco both increase the risk of health issues, so insurance companies charge extra premiums from tobacco users.
Number of Members – The number of members that will be included in your plan will also determine the cost of your health plan. An individual health plan is as expensive as a family health plan.
Though people need to know that health insurance companies cannot charge you a higher premium based on your gender or your specific health condition. You should also know that a private health insurance plan that you purchase on your own is more expensive compared to a private health plan obtained through an employer. Private health insurance plans obtained through the employer are less expensive because employers pay for a part of the cost of a health plan and employees pay for the remaining part.
Types of Private Health Insurance Plans
As an informed health insurance shopper, you should be aware of different types of private health insurance plans available in the health insurance marketplace. Knowledge of these plans will help you pick the best plan to have perfect health coverage. Some of the types of private health insurance plans are:
- Employer-sponsored health plan
- Individual private plans like HMO, PPO, or POS plans
- Catastrophic plan
- Short-term plans
Types of Public Health Insurance Plans
Public health insurance plans are less expensive health plans compared to private plans but have strict eligibility requirements that you are supposed to meet to qualify for it. Not only public plans are an affordable alternative but you also don’t have any copay or remit any deductibles. You should be aware of different public health plans offered by the government so that you enroll in a public plan as soon as you become eligible for it. Some of the public health insurance plans are:
- Children’s Health Insurance Program
- Veteran Affairs
Best Private Health Insurance Companies
Choosing a private health insurance plan is a big and major decision that you take after carefully analyzing different factors. Besides, you should also consider buying a health plan from the best private health insurance companies offering the best of benefits at affordable costs. The best and reliable private health insurers not only ensure better benefits and competitive prices but also have a wider network, a good choice of healthcare providers and hospitals, and best for preventive care. Some of the best and leading private health insurance companies of the U.S. include:
- Blue Cross Blue Shield
- Kaiser Permanente
- Molina Healthcare
While reviewing health plans, you need to be clear of your priorities in mind. You need to consider certain factors, like if you have a preferred doctor, then you should purchase a plan that has your doctor in its network. Or if you take prescriptions, then you should check that your prescriptions are covered in your plan or not. If you want a health plan with a low monthly premium, then you should also keep an eye on the deductible amount to make sure that you don’t end up with unexpected healthcare costs.