NOTE: This is the second in a series of Community Columns by expert staff who are implementing health law changes in Colorado.
January 7, 2014
By Antoinette Taranto, Client Services, Eligibility and Enrollment Office Director, Colorado Department of Health Care Policy & Financing. Antoinette has more than 17 years of health policy and administration experience. Her team spearheads the changes to Colorado Medicaid and Child Health Plan Plus (CHP+) eligibility rules and systems to comply with state and federal health laws.
No one plans to get sick or hurt, but most people need medical care at some point. Health insurance covers these costs and protects you from very high expenses.
Health Coverage When You Need Care
Health insurance is a contract between you and your insurance company. When you buy a plan, the company agrees to pay part of your medical costs when you get sick or hurt.
There are other important benefits of health insurance. Plans available through the Connect For Health Colorado Marketplace (and most other plans) provide free preventive care, like vaccines, screenings, and check-ups. They also cover some costs for prescription drugs. Also, having health insurance can help you get access to a medical provider who can get to know you and your individual medical needs.
Health Insurance Protects You From High, Unexpected Costs
Did you know the average cost of a 3-day hospital stay is $30,000? Or that fixing a broken leg can cost up to $7,500? Having health coverage can help protect you from high, unexpected costs like these.
How Health Insurance Coverage Works
When you have insurance, you pay some costs and your insurance plan pays some:
Premium: A premium is a fixed amount you pay to your insurance plan, usually every month. You pay this even if you do not use medical care that month.
Deductible: If you need medical care, a deductible is the amount you pay for care before the insurance company starts to pay its share. Once you meet your deductible, your insurance company begins to cover some costs of your care. Some plans have lower deductibles, like $250. Some have higher deductibles, like $2,000. Many plans provide preventive services, and sometimes other care, before you’ve met your deductible.
Co-pay: A co-pay is a fixed amount you will pay for a medical service. For example, a visit to the doctor’s office might cost $150 if you didn’t have coverage. With health insurance, you may pay only $25 and the health plan would pay the rest.
Co-insurance: Co-insurance is similar to co-pay, except it’s a percentage of costs you pay. For instance, you may pay 20% of the cost of a $200 medical bill. So you would pay $40 and the health plan would pay the rest.
How Insurance Protects You
Insurance coverage protects you in two ways from high medical costs:
Out-of-pocket maximum: This is the total amount you will have to pay if you get sick. For example, if your plan has a $3,000 out of pocket maximum, once you pay $3,000 in deductibles, coinsurance, and co-pays the plan will pay for any covered care above that amount for the rest of the year.
No yearly or lifetime limits: Health plans in the Connect For Health Colorado Marketplace cannot put dollar limits on how much they will spend each year or over your lifetime to cover essential health benefits. After you’ve reached your out-of-pocket maximum, your insurance company must pay for all of your covered medical care with no limit.
People without health coverage are exposed to these costs. This can sometimes lead people without coverage into deep debt or even into bankruptcy.
The Next Step
If you’re now convinced you do need health insurance then visit our I Need Health Insurance page to explore your options.