Health Insurance

Illness and injury can put a major strain on your physical and emotional health. And, unless you have adequate insurance, either can undermine your financial security. The challenge is to understand the coverage options available to you so you can choose one that best fits your healthcare needs and financial situation.

Most people who work full-time for a mid-sized or large employer, and many who work for a small business or non-profit organization, have health insurance as an employee benefit. If you don’t have employer-provided insurance, you must buy individual coverage for yourself and your family. If you’re 65, or if you have certain disabilities, you’ll probably be eligible for Medicare, the federal health insurance program. But unless your spouse is also eligible, he or she will need separate insurance.

Employer Health Plans

If you have coverage through your employer, you may have a choice of plans, including managed care plans, fee-for-service plans, and a high deductible plan (HDHP).

In managed care plans, which could be either preferred provider organizations (PPOs) or health maintenance organizations (HMOs), you have access to a roster of participating doctors. A PPO negotiates a fee for each service with the healthcare providers in the plan, and your cost is whatever share of the premium your employer requires you to pay plus a copayment for each visit. Most preventive care is fully covered. The copayment is a fixed dollar amount that the plan sets, often one amount for your primary care provider and a higher one for specialists. If you see a provider who doesn’t participate, your plan may or may not pay a percentage of the cost.

An HMO, on the other hand, employs the plan’s doctors and other providers and often owns the hospitals to which you are admitted. Typically, visits to other doctors or facilities aren’t covered.

In a fee-for-service plan, you can see any doctor or service provider you wish.Your insurer will pay a percentage, typically between 70% and 80% of the cost it approves for the specific treatment—usually less than the amount you were charged. You pay your share of the premium and must meet an annual deductible, after which the insurer pays its share of your costs.

HDHPs are managed care plans with lower premiums but much higher deductibles than other plans—a $1,650 minimum for individual coverage, and a $3,300 minimum for family coverage in 2025. There are also annual limits on what you must pay in out-of-pocket expenses—$8,300 for self-only and $16,600 for family coverage in 2025. Both sets of caps tend to increase slightly each year.

If you participate in an HDHP, you are entitled to open a health savings account (HSA) and contribute pretax income to pay for qualifying but uncovered medical expenses. Any amount you don’t spend one year can be rolled over to the following year.

Individual Coverage

You can purchase insurance either directly from an insurer or through a state, federal, or state-federal marketplace, or exchange, established under the ACA.

In most cases, you make two choices when you use an exchange, among providers and among four levels of coverage: bronze, silver, gold, and platinum. Each level covers a different percentage of your healthcare costs, from 60% with bronze to 90% with platinum. Prices vary as well, with the most comprehensive plans having the highest premiums. Plans with the lowest premiums tend to have very high deductibles.

Premium credits and cost-sharing subsidies are available to those who qualify, making the cost of buying coverage more affordable. This includes anyone whose income is up to 400% of the federal poverty line, or $128,600 in 2025 for a family of four. In addition, there are limits to what you must pay in out-of-pocket expenses, similar but not identical to the out-of-pocket caps on HDHP plans.

For more information about ACA provisions, you can visit www.hhs.gov/healthcare.