In the age of Obamacare, buying health insurance means finding the cheapest possible plan and filling out an application, right? Buying the right health insurance, however, may not be so simple.
Health plans under the Affordable Care Act may look the same as pre-Obamacare insurance at its core, but there are some things you should know before you decide on a plan or keep the coverage you have another year—things your state’s exchange probably won’t tell you. When open enrollment nears, re-asses your current health insurance and look at additional options. Here’s what to know about health insurance:
1. The Lowest-Priced Health Insurance Plan May Not Be Best for You
A low monthly premium may feel manageable from month to month, but it often translates into a high deductible and high out-of-pocket expenses. This may work well if you typically visit the doctor for preventive services covered by the Affordable Care Act and little to nothing else. However, if you have an ongoing medical condition, tend to be ill and need medical care several times throughout the year, or have small children who need to see the doctor frequently, choosing the plan with the lowest monthly cost may not be your savviest move.
In 2016, the average Obamacare deductible amounts for individual and family health insurance plans sold on 37 state exchanges were as follows:
- Bronze plan – $5,731 (individual) | $116101 (family)
- Silver plan – $3,117 (individual) | $6,480 (family)
- Gold plan – $1,165 (individual) | $2,535 (family)
- Platinum plan – $223 (individual) | $468 (family)
- Bronze plan – $289.88
- Silver plan – $351.02
- Gold plan – $428.51
- Platinum plan – $543.68
Using the data listed above, the 40-year-old individual could pay $733.68 more per premium annually for a Silver plan and reduce his or her deductible by $2,614—that’s a 21% increase in premium for a little over 46% decrease in annual deductible. Furthermore, the cost-sharing breakdown between a Bronze plan and a Silver plan are as follows:
- Bronze – the plan pays 60 percent of covered medical expenses; the consumer pays 40 percent
- Silver – the plan pays 70 percent of covered medical expenses; the consumer pays 30 percent
Do you see how a Bronze plan might not be such a great bargain for individuals and families who visit the doctor more often than not?
As you shop for health insurance, consider the following: How often do you use medical services? Do you typically see the doctor for preventive care? What is your total budget for health insurance when factoring in premium, deductible, copays and out-of-pocket expenses? What are the deductible, copays, and out-of-pocket cap for each plan you are considering? Now that you know about health insurance, the answers can help you determine which plan is the best fit for both your health care needs and budget.
2. A Plan’s Provider Network Is Always Changing
Just because your preferred doctor, clinic, hospital or specialist participates in your health plan’s network does not mean that will always be the case. Networks change from year to year. Some health care providers and facilities will no longer participate. When the time comes to renew your health insurance plan or select a new one, check the network and be sure you still have access to the care you’ve been receiving.
Furthermore, many insurers use narrow networks on exchange-based plans to make them more affordable; that means the providers and hospitals considered in-network may be limited. Don’t wait until you have coverage to learn you will need to drive 30 minutes to get to urgent care or that the doctor you’ve seen for many years is no longer in-network. Investigate the network before you buy. What to know about health insurance includes the medical professionals available to you.
3. Prescription Drug Formularies Change Annually
The medication you take now may not be covered next year, even if your plan currently covers it. Prescription drug formularies change from year to year. You may be forced to take a similar name brand medication or the generic version.
4. Unless You Pay, You Don’t Have Coverage
It may sound basic, but many people get their ID card, sign up to have their premiums automatically withdrawn from their bank account and then never check to see if the payments are being made. Unfortunately, there have been glitches in the enrollment systems for both state-based and federally facilitated health insurance exchanges. Some people who made their first monthly premium payment and received enrollment materials are going to use their coverage and finding out they have none. Even if you know about health insurance, you’ll be in trouble if you don’t have it.
The Wall Street Journal’s Stephanie Armour reported on July 7, 2014, that “Months after the sign-up deadline, thousands of Americans who purchased health insurance through the Affordable Care Act still don’t have coverage due to problems in enrollment systems.” The article noted that “there are no hard numbers,” and the problem has impacted a “tiny fraction” of the 8 million enrollees. However, for those who go to use their coverage, it is a big deal.
5. Unless You Qualify for a Large Subsidy, the Marketplace May Not Be Your Best Option
Health insurance plans sold away from the state-based and federally facilitated health insurance exchanges may be cheaper—and they offer the same benefits. All health insurance plans considered minimum essential coverage must adhere to the same Affordable Care Act provisions. That means essential health benefits must be included, certain preventive services must be covered at no additional cost, and applicants cannot be denied or charged more based on health history, to list a few things you’ll want to know about health insurance.
Only plans sold on state-based and federally facilitated exchanges qualify for premium tax credits and cost-sharing subsidies. However, if your income makes you ineligible for financial assistance or the credit and/or subsidy you would receive is minimal, you might consider checking rates for health insurance plans sold in the private marketplace. Again, even if the rate is comparable or even a bit more, check the network. Networks are one factor that may vary significantly from on-exchange coverage to off-exchange coverage.
As you prepare for the next open-enrollment period, spend time carefully considering the next year’s coverage. If you need help, contact a health insurance agent or broker who can answer your questions and assist you in selecting the best coverage for your situation.
Taking the Next Steps
Add the next Open Enrollment Period to your calendar, and get ready to choose the plan you’re most comfortable with!
For More Reading:
- When Is the Special Enrollment Period for Health Insurance?
- Will I Have to Pay the Obamacare Penalty for Not Having Health Insurance?
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