Health Insurance: An Overview đ©ș

Happy Weekend from Team YMP! đ
Weâre soaking in these long summer days on the East Coast and processing our thoughts on the 2020 elections (including local ones). Weâre focused on the issues, but we canât help feeling emotional over the growing number of minority women in rooms of power. Weâve seen firsthand in our corporate male-dominated offices how diversity helps reveal blind spots and biases for the better.

Our intern Josephine finished her summer at YMP. She created this great resource list on mental health, and asked us HSA questions that led to our topic today!
Whatâs on Our Mind: Healthcare is a Headache đ©ș
We didnât even consider healthcare until we got bumped off our parentsâ plan. Most of us start paying for our own health coverage at age 22 - 25, because
Recently, we refreshed on our own understanding of healthcare because, well, COVID. The details can be yawn-inducing, but we need you to pay attention for this one!
(1) Healthcare insurance means you donât run into $$$ bills completely alone.
Health insurance is societyâs way to collectively share and protect individuals from health risks and outrageous bills. While it doesnât fix everything, it removes some of the uncertainty and risk around rising healthcare costs.
(2) You may feel overwhelmed by health insurance options and thatâs normal.
In the U.S., there are three main types:
- Company-sponsored plans
- Government-sponsored plans (Medicaid = low income, Medicare = elderly)
- Private market insurance (typically more expensive, but for people who donât fall into the first two plans)
Company-Sponsored Insurance: Available to employees and family members. You still have to pay for insurance through a deduction from your paycheck, but your employer chips in and negotiates a group rate. Company plans tend to be cheaper than private insurance.
There are a few ways to hook up company-sponsored insurance:
- Employee
- Spouse / domestic partner of employee
- Employeeâs dependent child under age 26
Non-Company Options: Government plans vary heavily by state and change frequently, so we recommend checking healthcare.gov directly. For younger people, the options are Medicaid (low-income or unemployed individuals) or private insurance.
For today, weâll be focusing on employer-sponsored plans, but hope to cover Medicare later in our newsletter series!
(3) No one size fits all, so research your health options specifically.
We mean it â visit your employerâs benefits page. Generalized information is useless unless you can see how it applies to your companyâs options and price points. Consider your companyâs benefits information a field guide. Every time you change companies or health plans, youâll want to re-evaluate too.

The most common options for corporations are high and low deductible plans.


High Deductible Health Plans (HDHPs):ï»ż Low monthly âmembershipâ cost and eligible for HSAs, but higher potential out-of-pocket costs.
Health Savings Account (HSA): Both a healthcare emergency fund and a long-term tax-advantaged investment vehicle.
- HSAs have three major tax benefits. You can fund your HSA with pre-tax income and invest that money tax-free until you choose to spend on health expenses (tax-free). Once you hit the age of 65, you can spend HSA money on other non-healthcare expenses (taxed but without penalty).
- Although CA and NJ do not deduct HSA contributions from state taxes, you still get the federal tax deduction and all the other benefits of HSAs!
Low Deductible Health Plans: Higher monthly âmembershipâ cost, lower potential out-of-pocket costs
- Usually no HSA but your company may offer a Flexible Spending Account (FSA) which you can use for health expenses within the year.
- Different industries have different types of low-deductible plans so you should learn specifically about yours.
(4) Thereâs no right choice because you canât predict the future, but understand the trade-offs.

Understand the coverage for your specific needs, including mental health, physical therapy or health conditions. This may involve a phone call to the insurance hotline which will be annoying but save you money and headaches in six months.
Most young, healthy individuals can opt for the HDHP plan to save money and max out the HSA as an investment vehicle. However, HDHPs come with higher risk of unexpected costs if you do break a leg or require more healthcare that year.
We truly emphasize reading your companyâs specific plan! They vary significantly. Some package dental and vision together, whereas others offer these separately. Read thoroughly and Google terms you donât understand.

(5) If youâre still lost, phone a friend! đ
Healthcare can be confusing, but someone around you probably has learned these lessons the hard way. Ask your family if you feel overwhelmed by the words on Google. Call the insurance hotline or even a savvy coworker.
No pressure if you arenât sure you made the right choice; you can change your mind next year.

Healthcare Terms to Know
- Out of Pocket: The amount you have to pay by yourself. Some plans have âout-of-pocket maximumsâ which put a ceiling on your healthcare costs at least within covered services.
- Deductible: Amount you pay out-of-pocket before your insurance plan starts to pay. For example, if your health plan has a $2,000 deductible, you pay the first $2,000 of covered services yourself and your insurance pays anything above that.
- Health Insurance Premium: Monthly / annual âmembershipâ fee you pay to have health insurance. For employer plans, this amount will come out of your paycheck each month.
- Copay: The set amount you pay for a doctorâs visit or service. This is called a copay because your insurance covers the rest of the actual cost.


Next week, weâll cover a few best-practices for Employer-Sponsored Plan HSAs and FSAs, which are great money-saving tax benefits that help offset healthcare costs!
What Weâre Reading: Healthcare Edition đ
- Michelle Obama talks about menopause in a way weâve never heard from high-powered women. Weâve seen more women share the dirty details of pregnancy, miscarriages and work balance â all topics weâll eventually have to deal with past our twenties.
- LA mayor cut off power for Tik Tok starsâ mansion due to partying during COVID.
- Minorities are disproportionately impacted from COVID-19, even at a younger age.
- Congress still hasnât finished negotiating the next stimulus package, which is now expected to pass in late September.