Health insurance is integral to our health, well-being and even longevity. Health insurance can also be confusing – even intimidating. A good understanding of the basics of health insurance is key to getting the most from our health care system in the United States.
The last half of the year is a good time to think about your health insurance and whether you have the right plan in place for you and your family. That’s because many health plans offer open-enrollment periods in this timeframe. This is when you can make changes to your plan.
This can be a confusing process, however, so it’s good to understand some basics before you get started. “Even for those of us who work in healthcare, insurance can be confusing and frustrating,” says Dr. Audrey Miklius, an endocrinologist in Dallas. “At Privia Medical Group North Texas (PMGNTX), we want our patients to have the facts when it comes to insurance. And we are proud to be included in most major insurance networks in North Texas, allowing us to better serve our patients.”
How Insurance Works
The basic principle of all forms of insurance is that of spreading risk. Whether we are talking about insurance for our house, our car, business or health care, the basic premise is similar.
From the insurer’s perspective, many people paying in for coverage provide the financial resources to cover expensive events for those who experience them. Maintaining the proper balance between premiums collected and benefits paid is the key to the insurer maintaining financial solvency.
Collect too little in premiums, and the insurer can lose money after paying out claims. Conversely, if the insurer collects way more premiums than it pays out in benefits, government regulators may scrutinize the company to see if it is overcharging its customers or underpaying when it comes to benefits.
From the consumer’s point of view, we pay a premium – theoretically, an affordable one – to have the peace of mind and financial security of knowing our expenses will be covered in part for a high-cost event, such as a house fire, a car wreck or a surgery.
Of course, when it comes to health insurance, we need it for more than just catastrophic events. Routine health care needs, such as prescription drugs, imaging, lab tests and minor procedures can easily run hundreds or even thousands of dollars a year. Having health insurance defrays those costs considerably, making routine health care affordable.
“The ideal goal for health insurance is that cost is not a barrier to someone receiving the health care they need to stay healthy,” explains Dr. Miklius. “We should be able to afford our health care premiums and in return have coverage that is good enough to cover the vast majority of all essential health care services.”
Where Do We Get Health Insurance?
People get health insurance from several different sources, depending on their age, job situation and other factors.
Your Employer
This is the traditional way most non-seniors in America have health insurance. More than 47% of all Texans are insured through their job. In this system, you select a plan offered by your employer and pay a premium that is deducted from your paycheck, before taxes. Usually, the employer pays a share of the employee’s coverage and in some cases, a share of the employee’s family members’ coverage.
The Health Insurance Marketplace
The Health Insurance Marketplace is an option for lawfully present residents under 65 to purchase health insurance. People generally use this option if coverage is not available through their employer.
The Marketplace has seen some changes in the last year. The COVID-era enhanced tax credits have expired, making these plans more costly for middle- and higher-income households. Tax credits are still in place for lower-income households.
Despite this development, the Marketplace remains a popular option for Texans. In 2026, more than 4.1 million Texans are enrolled in a Marketplace plan, up 5% from 2025.
All Marketplace plans provide the following:
- 10 Essential Health Benefits, including prescription drugs, emergency care, hospitalization, pregnancy care, mental health care, rehab and more.
- Free preventive health services, such as vaccines and screening tests
- Coverage for pre-existing conditions. This means you cannot be denied coverage or treatment for conditions like diabetes, hypertension or cancer.
Medicare
This is the federal health insurance program for American citizens who are 65 and older. People who are approaching age 65 should visit Medicare.gov for enrollment information. Some people are automatically enrolled at 65, while others need to enroll themselves. There are three main components of Medicare:
- Medicare Part A is known as hospital insurance, covering hospital stays and some long-term care needs.
- Medicare Part B is medical insurance, covering physician visits and medical screenings and labs.
- Medicare Part D is a prescription drug insurance program.
Some people choose to delay enrollment in Medicare Parts B and D if they have health insurance through an employer that they prefer to keep while they are still working. However, a late enrollment penalty may apply.
Medicare Advantage
Also known as Medicare Part C, these are private plans sometimes purchased by seniors as an alternative to traditional Medicare. Medicare Advantage plans are offered by private companies but must be approved by Medicare. Those with a Medicare Advantage plan still have Medicare coverage, but they receive their benefits through the plan directly, not traditional Medicare.
The additional benefits provided by Advantage plans may include dental, hearing and vision coverage. Out-of-pocket expenses vary between Medicare Advantage plans, as do the provider networks they offer. For these reasons, it is important to compare Medicare Advantage plans just as you would employer-based plans.
You can search for and compare Medicare Advantage and Medicare Part D plans here. You can also input all the medications you take to compare your out-of-pocket drug costs across plans.
Veterans Administration
Veterans of the United States Armed Forces may be eligible for health benefits through the VA, depending on a variety of factors, including length of time served, discharge circumstances, income and service-connected disability. VA health care benefits have expanded in the last five years: veterans who were exposed to Agent Orange, burn pits and other toxic substances are eligible for enhanced coverage. For more information, visit VA.gov.
Tricare
Tricare is health insurance for active-duty military personnel, as well as some military retirees. For more information, visit Tricare.mil.
Medicaid and CHIP
Medicaid and the Children’s Health Insurance Program (CHIP) primarily serve lower-income families. In Texas, Medicaid eligibility is usually limited to children and women who are pregnant, as well as moms who have given birth in the past year. CHIP is available for some families who earn too much to qualify for Medicaid. Visit the Your Texas Benefits website.
Key Dates for 2027 Coverage
If you have health insurance through your employer, you should check with your plan to find out when open enrollment is. For government insurance programs, here are some key dates to keep in mind:
Health Insurance Marketplace:
- Open enrollment begins November 1, 2026
- Enroll by December 15 for coverage to begin on January 1, 2027
- Open enrollment ends January 15, 2027
Medicare:
- Open enrollment runs October 15 – December 7, 2026
- During this period, enrollees can make the following changes:
- Add or drop prescription drug coverage (Medicare Part D)
- Change from a traditional Medicare plan to a Medicare Advantage Plan (Medicare Part C)
- Change from a Medicare Advantage Plan to a traditional Medicare plan
- If you are turning 65, you can enroll outside the open enrollment dates
Medicare Advantage:
- Open enrollment runs from January 1 – March 31, 2027
- During this time, people enrolled in Medicare Advantage may:
- Switch to a different Medicare Advantage plan
- Switch to traditional Medicare
- Note: you can only change plans once in this period
Selecting a Health Plan
Whether you have employer-based health insurance, are shopping for insurance in the Health Insurance Marketplace or are choosing a Medicare Advantage or Part D program, you will likely have a few options to choose from.
For example, a Health Maintenance Organization (HMO) may be less expensive than a Preferred Provider Organization (PPO) but may also provide fewer benefits or not allow you as many provider options. On the other hand, if you are relatively young and healthy, a less expensive plan may be right for you. Your employer probably has Human Resources staff knowledgeable about available benefits – if so, take advantage and make an appointment to get your questions answered.
On the Health Insurance Marketplace, you will find a variety of plans at varying costs: bronze, silver, gold and platinum. You’ll pay the least for bronze and get the fewest benefits; at the other end of the scale, platinum is the most expensive but provides the most comprehensive overall coverage.
You can also compare additional plans on the Texas Department of Insurance (TDI) website.
When comparing costs on any plan, be sure to consider four separate cost factors:
Premium:
The amount you pay each month to maintain coverage.
Copay
The amount you will pay each time you visit a provider or get a prescription filled.
Coinsurance
A percentage of the total bill you will pay, after you have met your deductible.
Deductible
The amount you must pay out-of-pocket each year before your health plan begins to cover the cost of medical services.
You may find an inexpensive plan but later discover you must meet a high deductible before you benefit from any coverage from the plan. You may also find that your co-pay for each visit, procedure or prescription is higher than you expected. For some people, these low premium/high-deductible and co-pay plans work just fine; just make sure you have all the facts before deciding.
An additional tool some employers offer for people who opt to enroll in a high-deductible plan is a health savings account (HSA). This is essentially a medical savings account that people can contribute pre-tax income to and then spend later to cover deductibles and other out-of-pocket costs. Some employers will also contribute to their employees’ HSAs.
Insurance Networks
Insurance plans have a group of health care providers they refer to as a “network.” These are providers, such as physicians, hospitals and labs, with which the insurer has a contract that stipulates what the provider will be paid by the insurance company.
Understanding an insurer’s network is critical to evaluating a health insurance plan. No matter what type of plan you select, you will pay higher out-of-pocket costs to see a provider who is not in your plan’s network.
Whenever possible, you want to stay within your network to keep costs down and you want to make sure your primary care provider – your medical home – and any specialists you see are in your plan’s network. Health insurance plans usually have a directory of providers on their website. PMGNTX providers are in-network for most major insurance plans in North Texas.
When Insurance Denies Coverage
One of the inevitable tensions that exists between patients and insurance companies – and for that matter, between doctors and insurance companies – is when the insurer denies coverage for a procedure or a medication.
Insurance companies generally do not cover treatments that are not medically necessary. A good example of this would be a Botox injection for cosmetic reasons. However, a Botox injection to treat chronic migraines would likely be covered.
Insurance coverage and denials have been top of mind for many patients and doctors with the explosion in use of GLP-1 medications in the last few years. GLP-1s are approved by the U.S. Food & Drug Administration to treat diabetes and obesity. Insurance will generally cover GLP-1s to treat these conditions.
However, if someone is overweight but not obese or diabetic, a GLP-1 will likely not be covered.
Your doctor will often have to seek prior approval from your insurance company for many treatments, procedures and even referrals to specialists. Prior approval is a common requirement of health insurance companies – they claim it helps to keep costs down and prevents non-medically necessary treatments.
Many times, a health insurer will provide prompt approval. Sometimes though, the insurer will disagree with your doctor that the recommended treatment is medically necessary and deny coverage.
“When this happens, we do our best to push back against the insurance company and make the case why the treatment is needed,” says Dr. Michelle Kravitz, a Dallas pediatrician. “Our job as your physician is to provide the best health care for our patients, and that includes working to get your insurance company to cover a treatment we believe is in our patients’ best interests.”
Using AI to Better Understand Health Insurance
There is no doubt that insurance can be confusing and overwhelming at times. If you find that some of the documents you get from your health insurance company are confusing, try using AI to analyze them.
For example, you could upload your Explanation of Benefits (EOB) statement if it’s unclear to you and ask the AI tool to explain it. You might redact your name and other personally identifying information if you prefer the AI not know your identity.
You can also use AI during open enrollment to compare plan options or to research available plans. For example, here’s a comparison of two plans available during open enrollment to an employee, produced by Claude AI:
You can also use AI tools to search for and compare Medicare Advantage Plans, Medicare prescription drug plans or Healthcare Marketplace plans in your area.
Get the Best Plan for You and Your Family
Insurance is one of those things we don’t think about a lot – until we really need it. That’s why it’s a good idea to set aside a little time each year to review your health plan, assess your options and make sure you have the best plan for your situation.
This article has been reviewed and approved by a panel of Privia Medical Group North Texas physicians.
This article contains information sourced from:
