How Health Benefits Work: The Basics

This article will introduce the health coverage options that are most likely for you:

• Income-based Medicaid, a government program which is almost free if you have low income, whether or not you have a disability.
• APA-related Medicaid, which is almost free if you have low income and also have a disability or are a senior. If you get Adult Public Assistance (APA) benefits, you automatically get APA-related Medicaid.
• The Working Disabled Medicaid Buy-In program, which lets you pay a monthly premium to get Medicaid coverage if you have a disability and your income is too high for you to get regular Medicaid.
• Medicare, which you get if you have a disability or are retired, if you or a family member has worked long enough while paying Medicare taxes.
• Employer-sponsored coverage, which your employer or a family member’s employer helps you pay for.
• Individual coverage, which you pay for yourself, possibly with the help of government subsidies.

All of these types of coverage have:

• Clearly defined services they will cover, including most of the physical and mental health needs you may have. For private insurance, all plans must cover Essential Health Benefits. Medicare’s coverage is comparable, while Medicaid offers some additional benefits, like personal assistance services if you need them.
• Payments you must make. Typically, payments for private insurance are highest and the fees for Medicaid are lowest. Your payments may include:
  • Premiums, a monthly payment you must make whether or not you use any medical services. (Medicaid usually has no premium.)
  • Copayments, a set amount you have to pay for a medical visit or service. The amount of the copayment depends on the service you get.
  • Co-insurance, a set percentage of the cost of a visit or service that you must pay.
  • A deductible, a set amount of money that you pay out of your own pocket each year before the insurance company will begin to pay for certain services. Once you have paid the deductible, you do not have to pay it again until the next calendar year.
• An out-of-pocket maximum, which is an annual cap on how much you have to spend on copayments, co-insurance, and deductibles. That means you will never have to spend more than $9,100 if you’re single or $18,200 for a family on these expenses.
  • Medicare is an exception: It does not have an out-of-pocket maximum.

None of these types of coverage:

• Have annual or lifetime limits on how much you can get in benefits. No matter how much medical care your insurance has to pay for, they can’t stop paying for care you need.
• Can discriminate against you because you have a disability. They cannot deny you coverage, charge you more, or refuse to pay for certain types of treatment because you have a pre-existing condition.

This article looks at these types of coverage to help you understand which is right for you and how to sign up.