Health Insurance 101 for First-Time Buyers in the US

April 23, 2024

Health insurance for individuals does come in various sizes and forms. We can understand that it will be overwhelming for someone new who is going to take up one for themselves.

As a licensed health insurance agent, we have come up with this blog to help you out. Let’s start from the basics and go through them one by one.

Understanding Health Insurance

Health insurance is simply a form of coverage that pays for medical and surgical expenses incurred by the insured. It can also help cover costs for preventive care, prescription drugs, and medical devices, depending on the policy details.

Health insurance plans vary widely, both in cost and in the scope of coverage they provide. Most plans require policyholders to pay a premium, which is a set amount typically paid monthly, along with copayments, deductibles, and coinsurance, which are other forms of cost-sharing designed to reduce the overall expense of healthcare services. Now, let's see why you would need one.

Why Do You Need It?

Why? It's simple. Health insurance is more than just a safety net and it is a fundamental component of managing your health and financial wellbeing. Health insurance is crucial for several reasons. It provides financial protection against unexpectedly high medical costs, facilitates easier access to care, and in some states, is still required by law.

Even though there is no longer a federal penalty for not having health insurance, it’s a valuable asset for both financial and health security. So, if you don't have one, you should definitely consider having one.

Types of Health Insurance Plans

HMO (Health Maintenance Organization)

These plans often have lower premiums and focus on preventive care. You'll need to select a primary care physician and get referrals to see specialists, which means your choice of provider and hospital is limited to those within the network.

PPO (Preferred Provider Organization)

PPOs offer more flexibility in choosing healthcare providers and don't require referrals for specialists. This comes at the cost of higher premiums.

EPO (Exclusive Provider Organization)

This is a blend of HMO and PPO, providing some flexibility but requiring you to stick to a network. No referrals are needed for specialists.

POS (Point of Service Plan)

A POS plan is a hybrid of HMO and PPO features. You'll have a primary care physician, but you can also use out-of-network providers at a higher cost.

HDHP (High Deductible Health Plan) with HSA

These plans have higher deductibles but lower premiums. They can be paired with a Health Savings Account (HSA), which lets you save money tax-free to use for medical expenses.

Understanding Insurance Terms

When choosing a plan, you'll need to understand several key terms. Let us walk you through each of these terms in a simple manner.

Premium is the monthly cost of your insurance plan.

Deductible the amount you pay out-of-pocket before your insurer starts paying.

Copayment and Coinsurance are your shares of the cost of services after your deductible has been met. Copayments are fixed amounts, whereas coinsurance is a percentage of the cost.

The out-of-pocket maximum is the maximum amount you will spend in a year on covered services.

How to Choose the Right Plan?

Assess Your Needs and Budget

Review your current health, medical history, and regularity of doctor visits. Consider your financial situation and decide what you can afford in terms of monthly premiums and out-of-pocket costs.

Compare Plans

Evaluate what each plan covers, the costs associated, and whether your preferred doctors and hospitals are in-network. Use tools at or through state exchanges to help compare plans.

Extra Benefits

Consider whether you need additional benefits like dental or vision coverage, which might be included in some plans. Carefully choose these according to your needs.

Again, relying on a licensed health insurance agent would be the ideal choice for many.

Where to Buy Health Insurance?

You can buy your preferred health insurance from the ACA marketplace. Or you can rely on the health insurance provided by your employer. But as a licensed health insurance provider, we always believe you should go for your own health insurance without any reliance on your employer. Do note that the health insurance provided by the employer becomes invalid as soon as you leave the company for some reason.

As mentioned before, it is always better to consult with a licensed insurance agent like us, for better clarification on health insurance.

Making the Most of Your Health Insurance

Once you have insurance, understand your benefits thoroughly. Use in-network providers to keep costs down, and take full advantage of covered preventive services to maintain your health.

It's also wise to familiarize yourself with the terms of your prescription drug coverage. Learn which medications are covered under your plan's formulary and consider using generic drugs if available, as they are often much cheaper than their brand-name counterparts. Moreover, some plans have preferred pharmacies where you might get additional discounts or mail-order services that can provide conveniences and cost savings.


Buying health insurance for the first time can seem overwhelming, but by breaking down the process into manageable steps, you can find a plan that fits your life and budget.

If you are on the lookout for a reliable health insurance provider, you can always reach out to us.