Determining the right health insurance plan for your family is important. The American Psychological Association reports that 6/10 Americans say health concerns or problems affecting their family are a significant source of stress. On top of that, the stress of finding the right health insurance plan for a family can make shopping for insurance confusing and anxiety-inducing.
We’re here to help. In this blog, we’ll explore family insurance plans, the difference between private and public health insurance, and which one may make the most sense for you and your loved ones.
What Is the Difference Between an Individual and Family Health Insurance Plan?
An individual health plan is available to someone who isn’t currently enrolled in a job-based policy or government program, like Medicare or Medicaid. Identical to an individual policy in its essential health benefits, a health insurance plan for your family covers multiple individuals.
Family health insurance policies will often have higher out-of-pocket monthly premiums and deductibles. Occasionally, family health insurance policies are referred to as family floater plans.
Both individual and family health insurance plans are required by the Affordable Care Act (ACA) to cover the following essential health benefits:
- Outpatient services
- Emergency services
- Maternity and newborn care
- Mental health and substance care
- Prescription drugs
- Rehabilitative services
- Laboratory services
- Preventative and wellness services
- Pediatric services
Who Cannot Be Covered Under a Family Floater Policy?
The main difference between an individual health insurance plan and a family floater plan is that all family members are included and protected under the family floater plan. This means that both the premium and the sum are shared amongst all family members. The family covered typically includes spouses, children, parents, and parents-in-law. Since every policy may have its own definition of family, there are certain exclusions to be aware of.
How Much is a Family Health Insurance Plan?
Floater policies can be cost-effective since you pay a one-time premium for all family members. One drawback of a family floater policy, depending on the monthly premium you choose, is that the sum insured may not be enough for all family members.
Premiums and Sums: What Are They?
A health insurance premium is the amount of money you pay for your health insurance every month. A health insurance sum is the annual, agreed-upon amount that an insurance company will pay in case of medical treatment or hospitalization. Any amount exceeding the sum will have to be paid by you, and a larger insured sum often means a higher monthly premium.
However, the higher monthly expense will often easily pay for itself, should an extended hospitalization occur. Depending on your family’s situation, it may make more sense and provide more peace of mind to invest a little more month-to-month to save more in the long run.
Where Can I Buy Health Insurance for My Family?
You can purchase health insurance from a private company or the Marketplace. Private companies include insurance companies or brokers. Marketplaces (also known as health insurance marketplaces) are public organizations in each state through which people can purchase health insurance.
What Is the Best Health Insurance Policy Type?
Some plans offer more freedom for care outside of a provider’s network than others, and some pay a greater share of costs for providers outside the plan’s network. Examples of health insurance plan types include:
- HMO Plan. Also known as a Health Maintenance Organization, this is a specific type of health care plan that sets out guidelines under which doctors can operate. On average, health care coverage through the use of an HMO costs less than comparable traditional health insurance.
- PPO Plan. Also known as a Preferred Provider Organization, this type of health plan contracts with hospitals and doctors to create a network of participating providers. With this plan, you pay less if you use providers that belong to the plan’s network, and more for hospitals and doctors outside of the network.
- POS Plan. Also known as a Point-of-Service Plan, this type of plan allows you to pay less if you use health care providers that belong to the plan’s network. POS plans also require a referral from your primary care doctor to see a specialist.
- EPO Plan. Also known as an Exclusive Provider Organization Plan, this type of plan only covers services by doctors, specialists, or hospitals in the plan’s network (except for an emergency).
Not all plans are one-size-fits-all for every individual or family. Marketplace healthcare may be right for some, while private health insurance may be a better fit for others. It’s important to speak to someone knowledgeable in different plans and policies. That way, you can make an informed decision on a health insurance plan for your family that makes sense.
Add-On Policies to Consider for Family Medical Plans
In addition to family medical insurance, there are add-ons to policies you may want to consider. Depending on what stage of life you’re in, you may choose to opt for one or more of the following:
- Major medical. This policy is designed to cover all or most medical expenses due to severe or prolonged illnesses.
- Surgical policies. This policy covers the expense of surgeries.
- Dread disease policies. Sometimes referred to as a critical illness policy, this policy pays out a lump sum if you or a family member contract a major illness.
- Hospital indemnity. Paid without regard to the hospital expenses incurred, this plan provides a daily benefit for each day you or a family member are hospitalized.
Public & Private Health Insurance
When shopping around for a health insurance plan for your family, you’ll come across public and private health insurance policies. The options can start to feel confusing, so we’re here to help you understand the differences so you can choose the best family insurance plan.
Public Health Insurance
Public health insurance is run by the U.S., federal, state, or local governments. The two most common types of public insurance are Medicare and Medicaid. Medicare is a federal health insurance program designed for individuals 65 years and older. It can also apply to people with certain disabilities. Medicaid is a public health insurance program intended for families with a low income or disabilities.
Private Health Insurance
Private health insurance is offered by a private entity, such as an insurance company. Some people may be scared off by the term “private insurance,” thinking it is too costly. But some studies have shown that purchasing private health insurance plans for a family end up being more affordable than employer-sponsored plans or public health insurance.
Open Enrollment for Health Insurance
For Marketplace coverage, annual open enrollment will vary by year, but it usually runs for three months. There are two other ways you can enroll past the cut-off date. (1) if you qualify for Medicaid or the Children’s Health Insurance Program (CHIP), and (2) if you have a qualifying life event. The four basic types of qualifying life events include:
- Loss of health coverage
- Changes in household
- Changes in residence
- Other qualifying events
- Becoming a U.S. citizen, significant changes in income, etc.
Some private health plans offer open enrollment year-round.
The Benefits of Private Health Insurance
Private health insurance continues to dominate the American landscape of healthcare, and 60% of non-elderly Americans receive private insurance. This is due to numerous benefits like customizable plans, ease of enrollment, and trust that you’re receiving top-of-the-line care at an affordable price.
Is Private Health Insurance Right for You?
The best way to determine the right health insurance plans for your family, and whether private insurance is right for you, is to speak with a knowledgeable team of insurance professionals.