Virginia Health Insurance Guide to Affordable Health Insurance

The History of Virginia Health Insurance

In 2008, the United Health Foundation rated Virginia the 22nd healthiest US state. This may not sound too disturbing, but if you look through the history of the study you'll find that in 1997 Virginia was rated the 11th healthiest state. From 11 to 22 in just over a decade? Following this trend, where does that put the state of Virginia in the next decade? The United Health Foundation's study noted some very major, very preventable reasons for this downward spiral. Two of the most substantial reasons were the overall decrease in immunizations that Virginian children are receiving and an almost 300% increase in obesity. These statistics, while startling, are completely reversible with the affordable preventative and routine care offered by a simple health insurance policy.

The purchase of health insurance helps to make imperative treatments like immunizations and diet plans affordable. By paying a premium to the insurance company, you receive a policy that has a predetermined copayment and/ or deductible. By providing you with a printed policy outlining these costs, the insurance company gives you a road map to better health. The premiums you pay to the insurance company are combined with the premium payments of other policyholders. By pooling these funds, the insurance company has a reserve of funds to access to pay for the medical expenses incurred by its policyholders. Any funds left in the pool at year end are carried over for the next year.

Section Terminology:

Premium: A premium is the amount of money a policy holder must pay in order to keep a policy from lapsing. In order to ensure the continuation of your health insurance policy, you must make your premium payments on time. Premium payments can be paid monthly, quarterly, semi-annually or annually. It is advisable to pay as much in advance as you can. You can also check with your health insurance company to find out if electronic payments are a possibility.

Copayment: A copayment is a fixed amount that policyholders are obligated to pay out of pocket for for medical treatment, supplies or medications. The copayment is most often due at the time of treatment but in some cases may be billable. Copayments represent a small fraction of the entire bill.

Reserve: Reserves are the liquid assets set aside by the insurance company in order to meet financial obligations as they arise. These assets are comprised of a portion of the premiums paid by policyholders. In most cases, the liquid reserves are held in conservative, interest bearing accounts so that they experience some growth over time.

Why Health Insurance is Cost Effective for Virginia Residents

It's no wonder that the state of Virginian's health is declining. The cost of preventative and routine healthcare increases at a much faster pace than the income of the average Virginia resident. Health care is not inflation resistant, but health insurance creates a price locking bubble that prevents your copayments and deductibles from rising within a policy year. This can be especially helpful if your family is on a tight budget or has suffered a job loss. You may have to pay more for milk or gas as inflation attacks your budget, but your healthcare costs will be unaffected.

Another variable in the cost of healthcare is location. You might expect that buying an ice cream cone on Virginia Beach may be more expensive that buying one in Richmond, but what about medical treatment? Unfortunately, there are differences in physician and hospital fees from town to town within the state. Health insurance locks in your portion of the payment so that the health insurance company must absorb those additional fees. So, whether the cost of your procedure is $700 or $7,000, as long as you stay in your network and you've avoided a policy lapse by consistently paying your monthly premium, you will only be responsible for your copayment. If you add up the average cost per year of your insurance premiums and compare that to the cost of one routine medical procedure, you'll find that the savings more than justify the monthly premium payment.

Section Terminology:

Deductible: A deductible is the amount of money that a policy holder must pay for medical treatment before their policy begins to pay for treatment. Deductibles are like copayments in that you pay them out of pocket to the healthcare provider. Not all policies have deductibles. If your policy has a deductible, you will pay all medical expenses out of pocket until your deductible has been satisfied and then you will pay only copayments.

Network: A network is a group of physicians, clinics and hospitals that have agreed to work with your insurance company for a fixed rate. See the "Evaluating Your Options for Health Insurance Coverage in Virginia" section for more details.

Lapse: A lapse is a policy termination as a result of nonpayment of premium. Paying premiums on time will prevent a lapse and ensure that your policy is active when you need it. Should your policy lapse, you may be able to reinstate it after a new underwriting evaluation and payment of unpaid premiums.

Evaluating Your Options for Virginia Health Insurance Coverage

When deciding what type of health insurance policy to purchase for you and your family, there are many factors to consider. The following questions will help you narrow down your search for the perfect coverage:

1. Do you want a policy that covers only catastrophic events and illnesses? If so, then a major medical policy might be right for you. Virginia residents who are not concerned with coverage for routine or preventative care turn to major medical policies to offer them some coverage in emergency situations. Major medical policies offer very attractive premium rates also. Since insurance companies do not need to pay claims on them very often, major medical policies offer inexpensive premiums to policyholders. Whether a catastrophe happens while you're in Arlington, Hampton or anywhere nationwide, you can rest easy knowing you're covered.

2. Do you have access to a group insurance policy? Group insurance policies are often offered by employers, unions and fraternal organizations. Organizations and employers statewide- from Chesapeake to Roanoke and Norfolk to Alexandria are stepping up to offer group coverage. Group insurance policies can be especially attractive to Virginia residents with preexisting conditions. Since group insurance is underwritten by using the experience of similar groups instead of each member's individual health experience, they can be issued inexpensively to even those generally considered uninsurable. Should you decide to leave the group at any point, you can qualify for up to 18 months of COBRA coverage while you look for a new insurance plan.

3. Do you want an insurance policy that covers routine and preventative care, but you don't have access to group coverage? If you answered this question yes, you should look into individual insurance coverage. Individual coverage is flexible- you can choose from different deductibles (or none at all) to help make the premium lower, you can choose different copayment options and you can choose between PPO's and HMO's. HMO's (Health Maintenance Organizations) are insurance plans that have a set group (or network) of physicians for policyholders to visit. Under an HMO, only visits to this network of physicians are covered. Any visits to physicians outside the network will be purely out of pocket. PPO's (Preferred Provider Organizations are insurance plans in which the insurance company has a preferred group of physicians they would like you to see, but you are not required to restrict your visits only to physicians in that group. With a PPO policy, your insurance company will pay some benefit to you, even if you go outside their network. You can expect your out of pocket expenses to increases should you decide to work outside the network.

4. Do you have dependents to cover? Dependents can be covered as part of a group plan, part of a family plan or within their own individual health insurance plans. When covering dependents it's important to compare the cost of group coverage including your dependents as well as individual policies for them and family plans. It is sometimes less expensive to give your spouse and children individual policies than to cover them under your group plan.

5. Do you need a tax deduction for medically related out of pocket expenses? Whether you've chosen a policy with a high deductible or you just want to benefit from a tax deduction for anticipated copayments, a health savings account (HSA) may be right for you. Health savings accounts are savings accounts that hold funds to pay for out of pocket medical expenses. The funds are not held by your financial institution, but instead are held by an insurance company to ensure their proper use and beneficial tax status. The money deposited into an HSA is tax deductible and can only be used for authorized expenses. There are many uses that may be sanctioned by your HSA provider including: acupuncture, massage therapy, and travel expenses related to an illness. Check with the company providing the HSA to find out what the allowable expenses are.

6. Are you a Virginia senior citizen? If you are a Virginia resident over the age of 65, you are able to sign up for Medicare coverage. If you are low income you may also qualify for many state sponsored discount medication programs. Whether you're in Newport News, Richmond or Portsmouth, you'll find a pharmacy that accepts the program state subsidized discount prescription plan. In these cases, you may wish to add a small Medigap policy to your arsenal to help cover any copayments, alternative healing treatments or medically related travel expenses not covered by Medicare.

While the list may seem overwhelming, careful consideration will show you that the above options are specifically tailored to individual needs. It's simply a matter of focusing on your specific needs and finding the right option for you.

Section Terminology:

Preexisting Conditions: An illness or chronic injury that was diagnosed in a policy holder before he or she took out their policy. Some insurance companies will exclude a preexisting condition from coverage benefits for a specified time period.

Underwriting: The process of evaluating a proposed insured's health and overall risk to the plan to decide if they should be approved for coverage and if they should be charged an additional premium to hedge against increased risk.

COBRA: The program that allows for the continuation of health insurance coverage after employment is terminated with a provider of group health insurance. COBRA guarantees the continuation of existing coverage for up to 18 months or until you sign up for coverage under a new plan. Policyholders who elect to take COBRA coverage should expect to pay a higher premium under COBRA than they did with the group plan.

Major Virginia Health Insurance Providers

Virginians will have no trouble finding the right policy to cover their exact needs. With nationally recognized companies clamoring to develop products tailored to the needs of Virginia residents, the decision between companies can be the hardest part of the process. These companies include:

Blue Cross Blue Shield of Virginia: Also called Anthem, Blue Cross Blue Shield of Virginia offers online quotes, physician information and information on Medicare eligibility. The website also offers many articles and published studies on health related topics.

Aetna of Virginia: In 2004, Aetna of Virginia introduced four new PPO plan options exclusively for Virginia residents. In their quest to reduce the uninsured population in Virginia, these plans offered a wide range of various deductible, copayment and coverage options. Tiered services to create affordability in every income bracket set Aetna of Virginia apart form the crowd.

Celtic Health Insurance of Virginia: Celtic has a range of PPO and managed care insurance plans for Virginia residents. With deductibles ranging from $250 to $5,000 and copayments as low as $10, you can find a plan that suits your current budget as well as your future healthcare needs.

Health Insurance in Virginia

With nothing but options, there's no way you can't find the perfect health insurance plan for you and your family. By carefully considering your needs and your budget, you can find a suitable plan that will serve you through the years. In doing so, not only will you help ensure the financial and physical security of your family, but you can also help propel Virginia into the top ten healthiest states in the U.S.