Understanding How Health Insurance Works & When It Takes Effect

It's not always easy to find reliable information about the healthcare industry, especially when it comes to understanding how health insurance works. In the U.S., healthcare is expensive – a single doctor’s office visit may cost several hundred dollars, and an average three-day hospital stay can run tens of thousands, making it nearly impossible for most to pay for such costs if you ever become ill or injured.

Therefore, health insurance is often seen as an essential safety net for many individuals and families. Health insurance, when functioning correctly, takes on the risk of potentially-exorbitant medical expenses in order to alleviate risk for consumers. In exchange for an upfront premium, you’re able to share the risk with thousands of other insurance enrollees who are making similar payments. As most people remain healthy most of the time, these premiums fund the relatively small number of enrollees who require care due to illness or injury.

Health insurance companies have conducted extensive research on the trends of risk, with the goal of collecting enough premiums to cover the medical costs of all their enrollees. As a result, there are a huge variety of health insurance plans available in the U.S., as well as a range of different rules and arrangements to consider.

If you’re looking to purchase a health insurance plan through the Affordable Care Act Marketplace, you should know that the coverage typically doesn't take effect until the first of the month following the date you enroll.

Health insurance providers have created a variety of plans to meet the needs of a broad range of individuals, from college students to low-income families and retirees. Each of these has its own distinct benefit level and premiums, as well as limits on how much will be paid for any particular procedure or pharmacy item.

When you’re considering a health insurance plan, it’s important to consider coverage levels, premiums, and what type of services are excluded or have limited coverage. Make sure to read your health plan policy carefully or ask one of our experts at Community Care Insurance Agency, as some health plans have restrictions on where you can go

for care or what type of providers are accepted.