Where do you get your Health Insurance?
If you are like half of the residents in New York State, you receive benefits through your employer, your spouse’s employer or your parent’s employer. The other half receive their coverage as individuals through the New York State Healthcare Exchange (New York State of Health), Medicaid, Medicare, Veterans Administration, Tricare, college they are attending or Child Health Plus.
Health insurance is the transfer of risk from an individual to an insurance company. Relatively small amounts of dollars, termed premiums, are paid to an insurance company who agree to pay claims when members utilize healthcare. Without insurance coverage medical and pharmacy claims would be unaffordable for most individuals and families.
How do we pay for our Health Insurance?
If you have employer sponsored coverage, monthly premiums to an insurance company administering coverage are paid by a combination of employer and employee contributions. The premiums are not subject to federal or state income tax or FICA (payroll tax that supports Medicare and Social Security). This is one of many reasons why employer sponsored coverage is more valuable than other coverages.
Individuals and families that purchase insurance through the New York Exchange pay monthly premiums out of pocket, with after tax dollars. Individuals or families that have household incomes under certain thresholds will qualify for assistance in paying for their coverage. These subsidies through the New York State Exchange come from tax dollars through employer group insurance, taxes on insurance companies, hospitals, medical-device makers and drug companies. The recently passed American Rescue Plan has made subsidies larger and more available for 2022 but this comes with a cost, you guessed it… more taxes.
Medicaid is provided at no cost to individuals and children with no or low income. This program is funded jointly by states and the federal government. States primarily rely on provider taxes and fees and property taxes. Nationally, over 72 million were enrolled in Medicaid as of November, 2020.
Medicare is available to those over 65 or individuals with a disabling condition. Medicare is paid for through payroll taxes (FICA), funds authorized by Congress, Medicare Part B premiums and other sources, such as interest earned on some types of investments. Medicare Advantage Plans or Medigap supplements are plans that are administered through private insurance companies to help with the out-of-pocket costs with Medicare. These premiums are paid for by plan participants and federal reimbursements through Medicare.
Isn’t all Health Insurance the same?
Employer based coverage is typically better than other coverages because of the access to National Provider Networks, larger prescription formularies and higher reimbursement for services. The freedom to see doctors, visit hospitals and facilities anywhere in the country, including Centers of Excellence such as Memorial Sloan Kettering, Mass General, Mayo Clinic, Cleveland Clinic, etc. are benefits not typically accessible with other insurance.
Most non-employer-based coverage utilize smaller local networks of providers and do not provide coverage for a person to seek treatment from the Centers of Excellence and may not have benefits that provide the lower cost shares with the covered person. The process to be seen by a non-participating provider and have claims paid with these plans can be extremely difficult.
The licensed professionals at the Ten Eyck Group advise companies and individuals on the choices available to them. If you have not reviewed your coverage to make sure you are getting the proper coverage at the best price, please contact us and we are happy to audit your status.