If you've grown up in a country without health insurance or one where insurance isn't common, it can be an extremely complicated concept. In fact, it's so complicated but not understanding or planning properly can cost you thousands of dollars.
Now, there are many benefits to having health insurance. But knowing how to navigate the healthcare industry is life or death for many people. Unfortunately, most information about it is either poorly written and confusing or misleading.
If you want to understand the complex and confusing world of health insurance, read our guide to health insurance 101.
What Are the Basics Terms?
One of the health insurance basics that you should understand is that insurance doesn't always cover 100% of your expenses.
This means that no matter your health, there is always going to be an out of pocket amount. The expense is what you pay up to a certain limit. Once you hit the threshold, your insurance fully covers your costs.
An important term to know is preventative care and whether or not your insurance company covers it. Preventative care usually covers things like mammograms, vaccinations, and counseling. In general, it's covered by most insurance plans.
One thing about insurance you should understand is it usually comes with a monthly fee usually called a premium. This money keeps your policy active and guarantees your policy is up to date.
You should also understand deductibles which are similar to an out of pocket limit. It's the money that you pay for healthcare and services before the insurer covers the entire amount.
Copays are a set amount of money you must pay for covered items. For example, if you have a $35 copay for a doctor visit, you'll pay that amount to see a doctor each time until the deductible is met.
Who Needs Insurance?
Everybody.
It's tempting to believe that health insurance is something only others need but every last person needs to get some form of insurance.
Currently, if you're in America, the ACA or the Affordable Care Act requires that you have insurance or face a tax penalty. The penalty is either $347.50 per child under 18 and $695 for adults or 2.5% of your income.
Insurance provides you with the peace of mind of knowing that if a medical emergency comes up you'll be able to afford treatment.
Though everyone should have insurance, there are some special concerns that you should keep in mind if you're part of one of the following groups:
Young People
In America, if you're under 26 and your parents allow it, you can stay on their plan. This frees young people from having to buy health insurance. Young Canada n citizens are usually covered by publically funded health care.
Students Studying Abroad
Though health insurance is covered for most citizens Canada if you're a student studying abroad making sure you have health coverage may be more complicated. Depending on which province you live in you may have to purchase insurance or it may be covered.
For example, if you're studying in Ontario, Quebec or Nova Scotia you will not qualify for public healthcare have to buy private insurance. Alternatively, if you're studying British Columbia, Labrador or New Brunswick as well as several other provinces you qualify for insurance if you qualify for insurance if you have a study permit.
Families
If you don't qualify for public healthcare in Canada and have to buy a private for both yourself and your family.
If you have a family plan, you'll need to have a deductible for both yourself and for your family as a whole.
What Kinds of Health Insurance Plans are There?
Now that we know who needs insurance lets go over the kinds of insurance you can get. There are only 2 categories of insurance Private insurance and public health insurance.
Public Insurance
Canada's primary health insurance system is a publicly funded system known as Medicare. Rather than having a single national healthcare system based on age or income there are 13 individual systems that cover each territory and provinces.
These systems guarantee that every citizen in Canada has access to healthcare without any out of pocket costs to them.
Let's go in depth about how Medicare works. Medicare is a federally funded health insurance program that breaks down different healthcare roles between federal and local governments. Though this program is provided for free participants can still privately buy insurance if they want.
Generally, the federal government is responsible for giving funding to local health programs. They also have to set standards through the Canada Health Act. These standards include:
- Accessibility
- Universality
- Public administration
- Comprehensiveness
- Portability
The role of local governments is to administer and organize health services so that they're available to everyone.
Private Insurance
Private health insurance is usually purchased through an open marketplace site or given through an employer. A health plan purchased on an open exchange must cover several essential benefits which include. In Canada currently, citizens can't shop for health coverage on the open market.
In Canada private insurance purchased is usually supplemental. Meaning that it usually covers services not required by local and federal government.
Which Insurance Should I Buy?
Though most procedures and medical insurance are covered by the public health system in Canada there are some instances where you may want to buy private insurance.
The Canada Health Act does not cover things like long-term medical care prescription drugs and dental care. If you have elderly or severely disabled people in your family you may want to consider long-term care insurance. And for most people, dental care is essential to buy.
Want More Help Understanding Insurance?
Now that you've passed health insurance 101 want to understand more about insurance. If you have any more burning questions about insurance we'de love to hear from you please contact us.
