Shopping for health insurance can feel like work—daunting, frustrating work. Even with Obamacare’s exchanges and metal tiers simplifying matters, it can be difficult to sift through the options and feel confident you are making the best choice. And when you finally find a plan that seems affordable enough and provides decent benefits, it is easy to settle.
Some Americans’ health insurance will be able to automatically renewed. In 2015 the Obama administration proposed across-the-board automatic renewal for plans purchased through the federally facilitated health insurance exchange, HealthCare.gov, and left the option open to state-based exchanges. That means a no-fuss open-enrollment experience after enduring a long enrollment process and customer-service wait times, right?
Perhaps, but simply re-upping for the same plan may not be your savviest move. Here is how and why you should take the time to reevaluate your current health insurance coverage and weigh it against other options.
1. Your current rate will not stay the same.
Monthly premium rates will increase, and your current rate could fluctuate drastically depending on your state of residence. According to a Charles Gaba analysis of 2017 rate filings:
- Premium increases will be, on average, between 18-24%
- Most plans will offer a narrower network in 2017 than they did in 2016
As you can see, if you allow your plan to automatically renew or choose the same one, you might wind up paying more or miss out on better coverage for less.
2. Your subsidy is based on second lowest cost silver plan.
This can be a real game changer. Again, it comes back to how rates fluctuate where you live. First, it is important to note that your premium tax credit subsidy is based your household income and the second lowest cost silver plan available in your area. The monthly premium for the second cheapest silver plan in your market may increase—or decrease. For the upcoming year, consider the monthly premium for the second cheapest silver plan as well as your current plan.
A premium increase for the second lowest cost silver plan may mean you are eligible for a larger subsidy, if your income remained the same. However, even with more financial assistance coming your way, you could theoretically wind up paying more per month if your current health plan’s premium also increased.
Bottom line: Pay attention to what the rates are doing and crunch the numbers.
3. Your income may have changed.
If your income decreased, you may be eligible for a larger premium tax credit and additional cost-sharing subsidies. If your income increased, you may not be eligible for the financial assistance you currently receive and will get a smaller amount or none at all.
Should your plan automatically renew, you will not need to re-submit financial documents to verify your income and subsidy eligibility. This may seem like a hassle-free way to proceed, but there can be real consequences if your income changed.
If you are making more money and take the same subsidies, you will have to pay back the difference at tax time. If you are making less money, you may be paying too much in monthly premium and could even be eligible for additional cost-sharing subsidies that reduce what you pay out of pocket toward your deductible, copay and coinsurance if you enroll in a silver plan.
4. You lose access to doctors and hospitals.
Networks change from year to year. Health care providers and facilities may be dropped because HMO plans are becoming more and more financially viable for health insurance carriers. That means the primary care doctors, specialists and hospitals you prefer may or may not continue to be available.
Before you renew your plan, verify that the network will continue to include the providers and facilities you use—and that are most convenient. As insurance companies attempt to cut costs and keep premium rates low on state-based and federally facilitated exchanges, they are creating narrow networks. These narrow networks limit the providers and facilities covered by your plan. That means the hospital or urgent care facility in your neighborhood may not be in-network, and you could wind up driving a significant distance in an urgent situation to receive care that is considered in-network.
5. Your prescription drug coverage might have become limited.
Health plan drug formularies may also be restructured from year to year. Limiting prescription drug benefits is another tactic insurers are using to reduce costs and premiums. Consider what generic and brand name drugs you are using long-term or use from time to time. Find out if and how they will continue to be covered by your health insurance plan in the upcoming year.
6. Your plan might be the same, but your deductible to copay to coinsurance could change.
Your bronze plan will remain a bronze plan. The percentages remain at 60/40—a Bronze plan pays 60 percent of covered medical expenses; you pay 40. But keep your eye on the numbers associated with your deductible, copay and coinsurance because they may increase in 2015. You could wind up having to meet a higher deductible before your benefits kick in and coinsurance takes effect.
7. Your health care needs may have changed.
If you rarely seek medical treatment other than preventive care, for which certain services are covered at no additional cost, a low monthly premium and high deductible could be just fine. However, if you or your family members have ongoing health care needs or frequently become ill, a low monthly premium and high deductible could mean paying more out of pocket throughout the course of the year.
Consider how you used your insurance in the past year and whether or not that may change in the year to come. Do you plan to start a family? Will you be engaging in more situations or activities that make you prone to illness or injury? Were you recently diagnosed with a condition that will need ongoing treatment or maintenance care? For just a few dollars more in premium each month, you could literally save thousands in deductible and reduce your cost-sharing percentage.
Spending a little time researching and considering the best health insurance coverage options for you and your family in the next year can potentially save you a lot of money in the long run. If you are struggling to understand how health insurance and Obamacare work, visit HealthCare.com’s product recommendation tool or call (877) 626-1943 to speak with a licensed insurance agent.