Understanding How Health Insurance Works

Date: 10/03/17

Why do I Need Insurance?

Everyone needs health insurance because it’s the law! If you don’t have health coverage, you can get a tax penalty. Plus, health insurance protects your finances from unexpected losses that most people can’t afford. And best of all, it leads to a healthier you! Health insurance lets you get the care you need to get healthy and stay healthy.

Example:

You get sick and need surgery. And, a hospital stay. Let’s say the total cost is $50,000. Without health insurance, you would have to pay the whole bill. ­­But with health insurance, you pay much less. You might have to pay a deductible and co-insurance. But, you will also have an out-of-pocket maximum that limits how much you have to pay.

For example, your deductible might be $5,000. And, your coinsurance is 20%. You would owe $5,000, plus 20% of the rest. That’s $14,000 total. But, your out-of-pocket max is $7,000. So you pay $7,000 and your health insurance pays the rest. Plus, you won’t have to pay anything else for the rest of the year! Having health insurance makes a big difference. You just paid $7,000 instead of $50,000!

Common Health Insurance Terms:

MHS and the Indiana Minority Health Coalition are working together to help you Maximize Your Health! We have an online resource center with lots of great info. Check it out at mhsindiana.com/maximize.