The basics
Increase your health insurance knowledge
Here are answers to some basic health insurance questions. If you still have questions, please call an AmeriHealth representative or refer to our Frequently Asked Questions (FAQ).
What is health insurance?
Health insurance is designed to protect you and your family from the costs of the medical services you need when you’re sick or injured. You choose a plan and agree to pay a specific rate, or premium, each month. Your insurer then agrees to pay a portion of your covered health care costs. These payments are typically based on discounts that health insurers negotiate with doctors or hospitals.
Why do I need insurance?
No one plans to get sick or hurt, but illnesses and injuries can happen at any time. In some cases, they can be devastating to your health and leave you with overwhelming medical bills. Health insurance limits your risk of having to pay for very expensive illnesses and injuries by covering medical care and other services, such as hospitalization and surgery.
Health insurance also helps you protect your health and well-being, primarily through coverage of preventive care services.
What are the different cost components of a health plan?
You choose a health insurance plan based on the cost of the plan and the services and benefits it covers. For most health plans, you pay a fixed amount each month, known as a premium. In addition to your premium, you may also pay each time you receive care or have a prescription filled. These payments are often called cost-sharing or out-of-pocket costs and come in the following types:
Coinsurance
Coinsurance is the percentage you pay for some covered services. If your coinsurance is 20 percent, your health insurance company will pay 80 percent of the cost of covered services. You will pay the remaining 20 percent — your costs are usually based on a discounted amount negotiated by your insurance company.
Copay
A copay is a flat fee you pay when you see a doctor or receive other covered services. For example, you might pay $20 to see a doctor.
Deductible
A deductible is an amount you pay each year before your health plan starts paying for covered services. For example, if your plan has a $1,000 deductible, you will need to pay the first $1,000 of the costs for the health care services you receive in any given year. Once you’ve paid this amount, your insurance will begin to pay a portion or all of your health care costs, depending on the plan.
Out-of-pocket maximum
An out-of-pocket maximum is the most you will have to pay for your health care expenses during a plan period (usually a year) for covered services received from providers that participate in the plan’s network. No matter what, you will not pay more than this maximum amount in a given year. Any care you receive for covered services after you meet your out-of-pocket maximum will be covered 100 percent by your insurance company.
How do I shop for private insurance?
If you’re not covered through your employer or not eligible for financial assistance through a state-funded program, you will likely have to buy individual or family insurance through a private health insurance provider, such as AmeriHealth.
Start by finding out which private health insurance carriers are available in your area. AmeriHealth offers coverage for individuals and families in New Jersey. See if private health insurance plans from AmeriHealth are available in your ZIP code.
Shopping for private health insurance is much easier when you know what questions to ask. When it comes to health coverage, everyone has different needs and preferences. We can help you figure out what type of plan you want, how to find a balance of cost and coverage, and what other benefits you should consider.
How do I choose the right plan?
Understanding the features of a health plan can help you pick the right plan. There are two factors to consider:
- Choice/Flexibility — Is it important for you to be able to see doctors out of network or without referrals? If so, then you may want to look into PPO plans. If it’s not a top priority, then you may want a POS plan — you’ll pick a primary care physician to coordinate your care, and you’ll pay less when you get a referral to an in-network doctor or hospital and more if you choose an out-of-network doctor or hospital.
- Affordability — Are you trying to save money on health care costs? If so, opt for a plan with a higher deductible that can be used with a health savings account to save tax-free dollars for qualified medical expenses. Or look for a plan with a tiered network. You’ll save money when you visit certain doctors and hospitals. This works best if your providers are already in the lowest-cost tier or if you don’t mind switching. Finally, be sure to choose a plan with additional cost-saving benefits. Explore all the member-exclusive programs, services, discounts, and deals our plans offer.
Gold, Silver, Bronze, or Catastrophic coverage
The best way to shop for health insurance is to get a better understanding of the individual and family plans that are available. The Affordable Care Act requires all plans to be organized by the level of coverage they offer. There’s also a catastrophic coverage plan available for people under 30, or for those who qualify for a special exemption. All plans cover the same essential health benefits — the difference is what you pay in monthly premiums and out-of-pocket costs when you need care.
The following chart helps you decide what type of health plan is best for you — based on how much you are willing to pay towards your premium each month and the cost you’ll pay when you receive care. For example, a Bronze health plan may be best for you if you don’t use a lot of health care services and want to pay less in monthly premiums. On the other hand, Gold might make more sense if you use a lot of health care and are able to pay more in monthly premiums.
| Gold | Silver | Bronze | Catastrophic | |
|---|---|---|---|---|
| Monthly premium | $$$$ | $$$ | $$ | $ |
| Cost when you receive care | $ | $$ | $$$ | $$$$ |
| Good option if you… | Tend to use a lot of health care services | Need to balance your monthly premium with your out-of-pocket costs | Don’t use a lot of health care services | Meet the requirements and need “just-in-case coverage” |
Don’t forget you may be eligible for a tax credit (subsidy) to help you pay for your health insurance premium, out-of-pocket costs, or both. There are a few ways you can get help paying for a health plan.
- If you qualify for the Advance Premium Tax Credit, the federal government will pay a part of your premium each month; or you could opt to receive a tax refund at the end of the year.
- If you qualify for lower out-of-pocket costs, you’ll pay less for things like prescriptions, emergency care, and copays.
- New financial help is available to lower your monthly premiums through Get Covered New Jersey. The state of New Jersey is offering a state subsidy called New Jersey Health Plan Savings that will help lower your premium. To learn more, visit GetCovered.NJ.gov.
What does it take to qualify for a Tax Credit?
It’s based on the size of your family and how your income compares to the government’s current official poverty level. You can use our subsidy calculator to determine what kind of savings you would qualify for when applying for coverage.
You might be able to get help paying for your health plan. See if you qualify. If your income is low enough, you may even qualify for New Jersey FamilyCare (otherwise known as Medicaid and CHIP).
