What is Covered by Health Insurance?

Like changing a tire and doing your taxes, health insurance is something that everyone seems to assume you understand how to do. But do you really understand health insurance in detail? On the most basic level, you probably already know that health insurance is a type of contract that helps you pay for medical expenses and prescription drugs. What is covered, what isn’t, and how can you get health insurance if you don’t already have a plan through your employer or spouse?

We’ve created a quick and easy-to-understand guide that covers everything you want to know about health insurance and your coverage options.  

What Health Insurance Covers

With the exception of short-term health insurance plans and Medicare supplemental insurance, the vast majority of health insurance plans are Affordable Care Act (ACA) compliant plans. This means that they meet at least the bare minimum services and guarantees laid out in the Affordable Care Act, introduced in 2010.

Every health insurance plan offered in the Marketplace or through your employer must cover at least the following services:

• Ambulatory patient services: This is a fancy term for “care that you receive from a medical professional that isn’t in a hospital.” Some of the most common ambulatory patient services include yearly physicals from your primary care physician, appointments for boosters and vaccines and any other scheduled non-emergency specialist care, such as a referral to a cardiologist or podiatrist.

• Emergency services: These include visits to the emergency room, ambulance rides and emergency medicine administered by a doctor or paramedic.

• Hospitalization: Under the ACA, your plan must include coverage for both emergency hospital stays as well as scheduled hospital stays (for example, a scheduled surgery or inpatient treatment).

• Pregnancy, delivery and newborn care: Your plan must provide coverage for your pregnancy, delivery and newborn care, both before and after your baby is born.

• Preventive care: This covers a wide range of tests and screenings, ranging from depression screenings to cholesterol tests to obesity screenings and counseling.

• Mental health services: Services include meetings and treatments from psychiatrists and counselors, behavioral therapy, inpatient services and substance abuse treatment.

• Rehabilitative services: This category includes services and devices that help men and women who were involved in a traumatic accident manage pain and recover mental and physical skills. It also includes pain management, medical devices and treatment for men and women with disabilities or chronic conditions.

• Prescription drugs: Though ACA-compliant plans must cover prescription drugs, they do not usually cover over-the-counter medication like Tylenol or acne cream.

• Laboratory services: Your plan must cover lab tests and services, including screenings, lipid panels and tests for sexually-transmitted diseases.

• Pediatric services: If you have a child under the age of 18, your health insurance plan must cover regular and emergency care as well as oral and vision care for the child. Keep in mind that adult dental insurance and vision insurance are not considered essential benefits.

• Birth control coverage: Some employers (like churches and other houses of worship) are not required to provide birth control coverage. Male birth control (such as condoms and vasectomies) are also not considered essential benefits. Birth control coverage does not offer coverage for abortions, both surgical and medicinally-induced.

Keep in mind that these essential benefits are considered the bare minimum under the ACA. Individual states may require health insurance companies to provide additional services.  

The following services are not covered by most ACA-compliant plans:

• Travel vaccines: Vaccines that are recommended or required to visit certain parts of the world but are not on the standard recommended schedule are not usually covered by health insurance. If you’re going abroad and need a typhoid, yellow fever or Hepatitis A vaccine, you’ll almost always have to cover it out of pocket.

• Cosmetic surgery: Almost every health insurance plan limits coverage to surgeries and procedures that are deemed “medically necessary.” This means that if you’re in a car accident and you need reconstructive surgery on your nose, your insurance will most likely cover the costs of surgery. However, if you want a rhinoplasty to upgrade your looks, you’ll have to cover it out of pocket.

• Dental and vision care for adults. Though pediatric dental and vision care is a requirement for ACA-compliant plans, it’s usually not included for adults. You’ll have to purchase separate plans to cover your teeth and eyes.

• Nursing home care: Short term nursing home care is covered under most plans, but long-term nursing care is not. This means that if you fall down, break a hip and must be moved to a rehabilitative nursing facility, your health insurance will cover the costs of nursing and physical therapy. However, long-term illnesses, like Alzheimer’s and dementia, are not covered under most plans because they usually require long-term stays in skilled nursing facilities.

• Bariatric surgery: Though Medicare and Medicaid programs both cover bariatric surgeries under certain conditions, there is no federal requirement that private plans must cover weight loss treatments.

Different Types of Health Insurance

When you choose a health insurance plan, you’ll be asked to navigate a myriad of plan types, usually symbolized by an acronym. Some of the most common types of health insurance plans include:

Health Maintenance Organization (HMO)

HMO plans deliver all of your health needs and services through the HMO’s preselected network of doctors, hospitals, laboratories and specialists with the exception of immediate emergency care. If you choose an HMO plan, you must see primary care providers that are in the HMO’s network.

You usually need a referral from your doctor before you can see a specialist. HMO plans grant you the least amount of freedom to choose which healthcare providers you see but they also involve the least amount of paperwork and are often more affordable than competitors.

Preferred Provider Organization (PPO)

PPO plans afford you a little more freedom to choose your healthcare providers than an HMO, but you may end up paying more for your care. With a PPO plan, you have the option of selecting doctors and specialists from the PPO’s list of in-network care providers, or you can choose your own out-of-network provider.

However, if your out-of-network provider charges more than your in-network option, you’ll pay the difference out-of-pocket. You also usually don’t need a referral to see a specialist if you have a PPO plan.

Exclusive Provider Organization (EPO)

An EPO plan is like a mix between an HMO and a PPO. Like an HMO, you’re provided a series of in-network doctors and specialists you can see. If you want to see an outside provider, you’ll have to pay the entirety of your doctor’s costs. However, like a PPO, you won’t need a doctor’s referral to see a specialist. If you’re looking for low costs and a bit more flexibility than an HMO plan, an EPO might be right for you.

Point-of-Service (POS)

POS plans are also a mix of HMO and PPO plans. Like an HMO, you’ll need a referral from your doctor to see a specialist. However, like a PPO, you may see out-of-network doctors and care providers as long as you’re willing to pay the difference between the cost of in- and out-of-network care providers.

Plan Costs

According to research from the Kaiser Family Foundation, the average American pays $477 per month for his or her health insurance premium.

However, the specific amount that you’ll pay for health insurance is determined by a number of factors. Though health insurance companies can no longer use factors like gender and preexisting conditions to calculate your rate, some of the most common factors that influence how much you’ll pay for your insurance plan per month include:

How to Buy Your Plan

Most employers who offer coverage to their employees pay a portion of their employee’s health insurance premiums. If you’re buying health insurance on your own via the ACA Marketplace, you’ll usually pay more than if you get your insurance through your employer.

Your Deductible

When you buy health insurance, you’ll pay a monthly premium every month as well as a deductible when you make a claim. A deductible is a specific amount of money that you’ll need to pay before your insurance kicks in and starts to cover your bills. Choosing a plan with a higher deductible will lower your monthly premium and vice-versa.

Your Age

Insurance providers may charge you up to three times more for your insurance if you’re older.

Location

The city and state in which you live affect competition among health insurance companies, and this also affects how much you pay.

Tobacco Usage

Health insurance providers may charge you up to 50% more for your insurance compared to non-smokers. If you need one more reason to quit, this is it!

Individual vs. Family Enrollment

The number of people enrolled in your plan affects how much you’ll pay. If you’re only buying a plan for yourself, you’ll pay less than if you need coverage for your spouse or children as well.

Who Needs Health Insurance

As of 2019, there is no penalty for not carrying health insurance coverage. However, everyone should have some form of health insurance to protect themselves financially in the event of an emergency or accident. Maintaining health insurance coverage can help you afford prescription drugs and seek early preventive care before a small health problem develops into a more serious or even life-threatening condition.

If you’re over the age of 18, you should work with your employer, the college you attend or your parents to help find independent coverage. You can also research short-term health insurance plans to get covered until Open Enrollment begins.

Where to Get Health Insurance

Not insured? No worries! There are a number of ways to get covered today, including doing some preliminary research on health insurance companies. Enter your zip code below to see where you could get coverage.

Open Enrollment

Open Enrollment is a period where you can purchase ACA-compliant plans through your state’s healthcare marketplace. The 2023 Open Enrollment period is scheduled to begin on November 1, 2022 and close on January 15, 2023.

If you’ve lost health insurance coverage due to a lost job, a new spouse, a divorce or a move, you may qualify for a Special Enrollment period outside of Open Enrollment. To learn more about if you qualify for a Special Enrollment period, you can use Healthcare.gov’s screener.

Though Your Parents

If you’re under the age of 26 and your parents have health insurance, you may stay on their plan until you turn 26.

Through Your Employer

As of 2019, large employers (those who employ 50 or more people) must provide adequate health insurance for their full-time employees. If you’re a full-time employee at a company with at least 50 employees, speak to your manager or HR department about enrolling in your corporate plan.

Though Your College

If you’re a full-time or part-time college or university student, you may qualify for coverage through your school.

Directly from a Provider or Broker

Get the Coverage You Need

Understanding health insurance and getting the coverage you need doesn’t have to be difficult or complicated. If you’re interested in learning more about your health insurance options, visit Healthcare.gov to browse more information about ACA-compliant plans and gap coverage options for 2020 and beyond.

Frequently Asked Questions