Health Coverage Basics: Understanding Your Options

Health coverage can be confusing, especially when you are starting a new job, losing coverage, turning 65, or adding a family member. Most people in the US get coverage from one of a few main sources. This guide explains each one in general terms so you can figure out where to start your research.

What You Should Know

Health coverage helps pay for medical care such as doctor visits, hospital stays, prescriptions, and preventive services. The main sources of coverage in the US are:

• Employer-sponsored plans
• Individual plans, including those offered through the Health Insurance Marketplace
• Medicaid and the Children’s Health Insurance Program (CHIP)
• Medicare
• Other sources, such as military or veterans’ health programs and coverage through a school

Each source has its own rules about who can enroll, when you can sign up, and what it costs. Eligibility is set by the program or plan itself, and rules can change, so it is important to check with the program directly.

CommunityResourcePath is an independent, education-only publication. We do not sell insurance, we are not affiliated with any insurer or government agency, and we do not match readers with plans or providers.

Common Options

Employer-Sponsored Coverage

Many people get health coverage through their own job or a family member’s job. Employers often pay part of the monthly cost, and the employee’s share is usually taken from each paycheck. Plans may cover the employee, a spouse, and dependent children.

When you start a new job, there is usually a set window to enroll. Your human resources department can explain the plan options, what each one costs, and when you can make changes.

If you lose job-based coverage, you may be able to keep it for a time through a program known as COBRA, though you will typically pay the full cost yourself. Your former employer or plan administrator can explain your options.

The Health Insurance Marketplace

The Health Insurance Marketplace, found at HealthCare.gov, is where individuals and families can compare and enroll in private health plans. Some states run their own Marketplace websites instead, and HealthCare.gov can direct you to the right one.

Plans on the Marketplace are grouped into categories, often called metal levels, that reflect how costs are shared between you and the plan. Depending on household income and size, some people may be able to get help lowering their monthly costs. The Marketplace application will show what, if any, help you may be able to receive.

Medicaid and CHIP

Medicaid is a joint federal and state program that provides health coverage to some people with limited income, and in some cases to older adults, people with disabilities, pregnant individuals, and others. CHIP provides coverage to children in families who may earn too much for Medicaid but still need help with coverage.

Each state runs its own Medicaid and CHIP programs, so income limits, covered services, and program names vary by state and household size. You can apply through your state Medicaid agency or by filling out a Marketplace application, which can forward your information to your state. Many states allow you to apply at any time of year.

Medicare

Medicare is the federal health program mainly for people 65 and older, and for some younger people with certain disabilities or conditions. It has several parts:

• Part A generally helps cover hospital care.
• Part B generally helps cover doctor visits, outpatient care, and preventive services.
• Part C, also called Medicare Advantage, is an alternative way to get Medicare coverage through a private plan approved by Medicare.
• Part D helps cover prescription drugs.

There are specific windows for signing up, and signing up late can sometimes lead to ongoing penalties. Medicare.gov and the Social Security Administration explain the rules. Local State Health Insurance Assistance Programs (SHIPs) offer free, unbiased counseling for people with Medicare questions.

Things to Consider

Enrollment Periods

Most coverage can only be started or changed at certain times:

• Open enrollment is a yearly window when you can sign up for or switch plans. Employers, the Marketplace, and Medicare each set their own open enrollment periods.
• Special enrollment periods may open after certain life events, such as losing other coverage, moving, getting married, or having a baby. These windows are usually limited, so it helps to act promptly after a life change.

Check with your employer, HealthCare.gov, or Medicare.gov for current enrollment dates, since they can change from year to year.

Comparing Plans

When you look at plan choices, consider:

• The monthly premium
• The deductible and other out-of-pocket costs, such as copays and coinsurance
• The out-of-pocket maximum
• Whether your doctors, hospitals, and pharmacies are in the plan’s network
• Whether your regular prescriptions are covered
• Coverage for any ongoing care you expect to need

Our guide to deductibles, premiums, and copays explains these terms in more detail.

Where to Start

1. List your situation. Note your household size, whether anyone has job-based coverage available, and any recent life changes.
2. Check with your employer first if you or a family member has a job that offers coverage.
3. Visit HealthCare.gov to explore Marketplace plans and see whether Medicaid or CHIP may be worth looking into.
4. Contact your state Medicaid agency with questions about state programs.
5. Visit Medicare.gov or contact a local SHIP if you or a family member is approaching 65.

Helpful Resources

• HealthCare.gov — the official Health Insurance Marketplace and information about Medicaid and CHIP
• Medicare.gov — official information about Medicare parts, plans, and enrollment
• Social Security Administration — information about signing up for Medicare
• Eldercare Locator — a public service that connects older adults and caregivers with local support
• 211 — a nonprofit referral line that can point you to local health assistance

Frequently Asked Questions

What if I miss open enrollment?

You may still be able to enroll after certain life events, such as losing other coverage or moving. Medicaid and CHIP applications are accepted year-round in many states. Check HealthCare.gov or your state’s program for details.

Can I have more than one type of coverage?

Sometimes. For example, some people have both Medicare and employer coverage, or both Medicare and Medicaid. When that happens, there are rules about which one pays first. Ask each plan how they coordinate.

Where can I get unbiased help choosing a plan?

The Marketplace offers trained helpers, sometimes called navigators, who can walk you through options at no cost. For Medicare questions, State Health Insurance Assistance Programs provide free counseling.

Next Steps

Start by identifying which sources of coverage may apply to your household, then visit the official site for each one. Mark any enrollment windows on your calendar, and gather documents like proof of income and household information before you apply.