Insurance Basics

Doing a little planning and homework goes a long way toward choosing the best insurance option for your situation. By understanding how health insurance works, you will have more confidence when buying insurance.

Health Insurance Provides Financial Protection

You may be asking yourself, “Why do I need health insurance?”

The answer is simple – to protect your finances if you get sick or in an accident. Healthcare is expensive. It is easy to rack up hundreds of thousands of dollars of costs for surgeries, hospital stays, doctor bills, drugs and treatments.

When you have insurance, the cost of care is usually lower than what you would pay on your own. This is because in-network providers usually agree to lower prices with insurers.

In addition, starting in 2014, it is the law to have insurance. You may have to pay a penalty when filing your taxes if you did not have insurance.

Health Insurance Helps Keep You Healthy

New health insurance plans focus on preventive care and screenings to help you stay healthy. Taking better care of yourself and finding health problems early saves you money in the long run.

One of the advantages of buying a new health insurance plan is you’ll receive preventive tests and services at no cost to you. That means you don’t have to pay anything for screenings and tests like:

  • Blood pressure, diabetes and cholesterol tests
  • Many cancer screenings, including mammograms and colonoscopies
  • Counseling on such topics as quitting smoking, losing weight, eating healthy, treating depression, reducing alcohol use
  • Regular well-baby and well-child visits, from birth to age 21
  • Routine vaccinations against diseases, such as measles, polio or meningitis
  • Counseling, screening and vaccines to ensure healthy pregnancies
  • Flu and pneumonia shots

Choosing the Plan That Is Best for You

The cost of the plan — also known as your monthly premium — is one factor to look at when choosing a health insurance plan.

Typically, the lower the monthly premium, the higher your out-of-pocket costs. Some people prefer a higher premium for lower out-of-pocket costs. Other people, who don’t expect to need a lot of healthcare services, may prefer a plan with a lower monthly premium and take the risk of higher out-of-pocket costs.

Other factors to look at:

  • What you pay for office visits, drugs and other services (coinsurance or copayment)
    • Coinsurance is a percent of the costs, such as 20 percent
    • Copayment is a flat amount, such as $20 for a doctor’s visit or $10 for a prescription
  • How much you pay out-of-pocket before you have coverage (deductible)
  • The most you’ll pay each year (out-of-pocket maximum)
  • What doctors or hospitals are in the health insurer’s network; typically, the bigger the network, the more expensive the premium because you have more choices

Basic Benefits & Metal Plans

All health insurance plans certified to be sold on the new Health Insurance Marketplace will be required to offer the same basic benefits. These basic benefits are called essential health benefits and cover 10 basic categories such as:

  • Office visits
  • Hospital care
  • Prescription drugs

Plans will be grouped in tiers based on how much financial protection the health insurance policy will cover. The plans are called metal plans because they are grouped based on four precious metals:

Four precious metals

Type of Plan

What It Covers

Your Pay

Premium Cost
BronzeBronze 60 percent of
the medical costs
40 percent of
the medical costs
SilverSilver 70 percent of
the medical costs
30 percent of
the medical costs
GoldGold 80 percent of
the medical costs
20 percent of
the medical costs
PlatinumPlatinum 90 percent of
the medical costs
10 percent of
the medical costs

Learn more about the new Health Insurance Marketplace.

How Health Insurance Works

Here’s how health insurance works:

  1. You pay a set amount each month for health insurance coverage. This is called a premium.
  2. You and the other members of the plan combine or pool your premiums together. This allows for a large amount of money to be available in case people need care that is really expensive.
  3. The pool of money and the out-of-pocket costs paid by members pays for the cost of healthcare services.

There may be times when you need more care than others in your plan. That’s when you’re really thankful you have insurance.

There may be other times when you need less care than others in your plan. That’s when you’re really thankful your health is good.

Save Money on Your Health

Most of us don’t like to spend money needlessly. You play an important role in helping to keep insurance costs under control and saving on your out-of-pocket costs.

Here are some money-saving tips:

  • Preventive Care. Take advantage of your no-cost preventive screenings. It usually is cheaper to treat a problem when it is found early. More importantly, it can save your life.
  • Generic Drugs. Get prescriptions for generic drugs whenever you can. Generic drugs are the same as brand-name drugs, except for the cost and the color or shape of medicine.
  • Follow Your Doctor’s Orders. You’ve paid your doctor for his or her advice. Now follow it. That includes taking drugs as prescribed, showing up for follow-up appointments, and following advice about diet and exercise. Ask questions if you don’t understand. Doctors are busy, but they want to help.
  • Use Participating Providers. Your out-of-pocket costs are less when you get care from providers who contract with the health plan. Before receiving care, ask if the provider has a contract with CoOportunity Health.
  • Find a Primary Care Provider. A primary care provider, such as a family physician, internal medicine physician or pediatrician, can help save you money. Your out-of-pocket costs are usually lower for primary care providers. And they’ll make sure you get the right preventive care and screenings for your situation.
  • Use the Emergency Room for True Emergencies. Most of us have a get-it-now mentality. But when it comes to healthcare, that mindset can cost you extra money, especially when using the emergency room for routine care, such as a cold or flu, earache or sore throat.
  • Make Healthy Lifestyle Choices. Taking good care of yourself can help to prevent chronic health problems such as diabetes, high blood pressure and high cholesterol. This means fewer trips to the doctor and less drugs. Making healthy food choices, being more active and not smoking can help you on the road to better health and save money.
Save Money on Your Health

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