Health insurance helps pay for our doctor visits, preventive screenings, hospital stays, prescription medications and emergency care.
But understanding health insurance and picking the right plan can feel confusing and overwhelming.
That's why we created this simple guide to help you understand your options and choose the coverage that's right for you.
How does health insurance work?
Most people make a monthly payment called a premium to have health insurance. In exchange, your insurance company shares the cost of doctor visits, tests, prescription medicine and hospital care. Depending on your insurance plan, you may also have to pay a deductible, copay or coinsurance.
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Common Insurance Term |
Definition |
|---|---|
|
Premium |
Your payment each month out of pocket for insurance. |
|
Deductible |
Amount you pay before insurance starts helping. (Some plans pay for preventive care before you meet your deductible.) |
|
Copay |
Fixed fee you pay for each visit to the doctor. |
|
Coinsurance |
Percentage of a medical bill you pay after meeting your deductible. |
|
In-Network Provider |
A doctor, specialist or hospital that accepts your health insurance for payment. |
|
Lower-cost plan that requires you to use a network of doctors and hospitals. |
|
|
More flexible plan that offers more choices for doctors and specialists, often at a higher cost. |
What are copays?
A copay is a set fee you pay when you visit a doctor or receive certain healthcare services. It will vary depending on your insurance provider and plan. Copays are also charged for many prescription medications.
What are health insurance premiums?
A premium is the amount you pay to keep your health insurance coverage. Premiums are usually paid each month or every three months. They can increase annually.
What does a deductible mean?
A deductible is the amount you pay for covered healthcare services before your insurance starts sharing the cost. Deductibles reset at the beginning of each year. They can increase annually. Some plans pay for preventive care before you meet your deductible.
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What is an in-network doctor?
An in-network doctor is a healthcare provider who has an agreement with your insurance company to accept your plan for payment. When researching doctors, be sure to ask if they are "in network" or on your plan. If not, you may have to pay more for the treatment or the full cost of the visit yourself.
Can I see an out-of-network doctor?
You can visit an out-of-network doctor, but it will usually cost more. The amount you pay depends on your insurance plan. PPO plans may cover some of the cost, while HMO plans often cover little or none.
What is open enrollment?
Open enrollment is an important period when people can choose or change health insurance plans. Dates vary by employer and insurance program. Open enrollment usually lasts anywhere from two weeks to two months in the spring and fall.
See the benefits of choosing UC Davis Health for your care
What if you miss open enrollment?
After open enrollment ends, you can only change your health plan if you have a major life event, such as:
- New job
- Marriage
- Have a baby
- Divorce
- Death of a spouse
Read this step-by-step guide to choose UC Davis Health for primary care
How do you choose a health insurance plan?
Find out what coverage options are available to you. Many employers offer health insurance. You may also qualify for coverage through a union, government-sponsored programs like Covered California, or Medicare if you're age 65 or older.
Compare health insurance plans based on things that matter most to you, including:
- Premium or monthly cost
- Out-of-pocket expenses like deductibles and copays
- Whether your doctors and hospitals are in-network
- Prescription medicine coverage
- Convenience
What type of health insurance is best for your lifestyle?
The two main types of health insurance plans are HMOs and PPOs.
- An HMO or health maintenance organization offers lower costs made possible by using a specific network of doctors.
- A PPO or preferred provider organization gives you more options to choose your doctors and specialists.
- Both plans offer a primary care doctor to manage your routine health needs and recommend specialists when needed.
Learn more about HMOs and PPOs
Read the differences between family medicine and internal medicine
Why should you have a primary care doctor?
You should have a primary care doctor to manage your routine care and coordinate with specialists. You can have a primary care doctor whether you have an HMO or PPO, but you will have greater choice with a PPO.
Get tips for choosing a primary care doctor
Learn why you should partner with a primary care doctor
Can you keep your doctor if you change health insurance plans?
You may be able to keep your doctors or healthcare providers if you change insurance plans. Check whether your current doctors are in-network providers on the new plan.
How do referrals work?
Referrals to other specialists or services depend on your health insurance plan.
- Doctor referral: In many plans, especially HMOs, your primary care doctor must refer you to a specialist before your insurance will pay for the visit.
- Self-referral: Many PPO plans allow you to schedule an appointment with a specialist on your own without first getting a referral from your primary care doctor.
Before scheduling an appointment, check your insurance plan's referral requirements. This could affect payment.
Find out how to make an appointment or get a referral
See our list of services and specialties
How much do people pay for health insurance?
The cost of health insurance depends on many things:
- Whether you have an HMO or PPO.
- The amount of your premiums, deductibles and copays.
- Whether you are visiting in-network providers.
- How often you visit a healthcare provider.
- If you have serious ongoing medical conditions.
- How many prescription medications you take.
- The number of family members on your insurance plan.
Overall cost is affected by how often you need healthcare and if you use in-network doctors.
Will your prescription medication be covered by insurance?
Prescription coverage varies by insurance plan. Check your plan's list of pharmacies and medication costs. To help keep costs down, choose generic drugs (not name brand) when possible. Ask your doctor or pharmacist about coupons for discounts on prescriptions.
Learn how to get your prescriptions delivered with UC Davis Health
Will insurance cover a visit to urgent care?
Medical issues that are urgent are often covered by insurance plans but check specific locations to be sure. You will probably be asked to pay a copay of $25 to $75.
Explore options for telehealth Express Care video visits
What happens if you go to an emergency room?
Health insurance usually covers emergency hospital care, but your costs may include a deductible, copay, or coinsurance depending on your plan. Read the terms of your insurance coverage before you use it.
Learn more about your emergency services
Are you required to have health insurance?
Yes. California law says you must have what’s called minimum essential coverage for health insurance.
Some things included in minimum coverage:
- Emergency services
- Mental health and substance abuse
- Pregnancy and newborn care
Some people may qualify for an exemption. If you don't have coverage and don't qualify for an exemption, you may have to pay a penalty when you file your state tax return.
Read more about California's healthcare law
UC Davis Health is here to help you reach a decision that you feel confident is best for you and your family. Call 1-800-2-UCDAVIS to find a doctor to partner with you in your health care.
This blog was reviewed for accuracy by Liz Boileau, UC Davis Health chief contracting officer in Managed Care and Pharmacy Contracts.
