Each year health insurance open enrollment season stirs trepidation in the hearts of millions of Americans who have to try to comprehend the ins- and outs of healthcare plans, and the changes that occur to plans each year.
Health insurance expenditures rose more than 20% between 2012 and 2014, and the rate of increase shows no signs of stopping. Steep rate increases have put some people in panic mode as they try to find coverage closer to the monthly rate they can afford. While a portion of Americans are bucking the system and refusing to pay for healthcare, the majority are signing enrolling, but it’s still too early to tell if the trends from years past will remain, or if individuals will “buy down” to more affordable, skinnier coverage. To find the right plan while keeping cost in mind, here are eight factors to consider:
Shop for a new health insurance plan
It goes without saying, keeping the same healthcare plan year after year can be financially devastating as monthly premium costs rise. Deductibles and networks change every year, and new plans are added to the state and federal exchanges as well. Failing to adjust to changes in the market can put individuals sticking to their same plan at a disadvantage. Reviewing coverage doesn’t take long if the most important elements are compared side by side, whether it be monthly cost, deductible, coinsurance and total out-of-pocket costs. Decide what elements are most important (deductible amount and provider network, for example), and then search for coverage that meets the checklist items by level of importance.
Look at both on-exchange plans in the federal marketplace, and off-exchange plans available through private website entities or insurance companies
When the Affordable Care Act came into being, health insurance companies wanting to participate in Obamacare had to file their insurance products on the federal marketplace or on their state exchange. Not all products were filed, and networks on exchange plans were narrowed to keep costs more affordable. In essence, this created two marketplaces: One cost-contained, narrow network marketplace, and one wide open marketplace with numerous choices and wider provider networks. By comparing health insurance plans in both marketplaces, consumers can get a better understanding of the entire scope of availability.
Check the provider network and understand what the variables mean
While doctor and hospital networks vary between on-exchange plans and off-exchange plans, it’s difficult to determine if a preferred doctor is covered by the plan being analyzed. The safest bet is to contact the customer service department of the health insurance company of interest, and ask if the provider is in-network with the health plan being researching. Ask about urgent care clinics and hospitals as well. Customer care representatives will have the most up to date information on which providers are in-network for each plan.
Learn if you qualify for cost assistance in the form of a tax subsidy
Remarkably, many Americans still do not realize they are eligible for cost assistance in the form of a tax subsidy to help reduce the monthly cost of health insurance. Others see the monthly premium increase for the next year and assume their cost assistance will not change. Rule of thumb: If a health insurance plan premium is increasing, the amount of cost assistance to help reduce the price of the plan will also increase unless the household has experienced a boost of income during the year.
Determine if you qualify for additional cost assistance that reduces your deductible, coinsurance other costs, like copays
Individuals and families that fall between the 100% and 250% federal poverty line qualify for cost sharing reductions on the federal or state marketplaces. The discount lowers the amount paid out-of-pocket for deductibles, coinsurance and copayments. However, a Silver plan must be purchased in order to obtain the discounts. A Silver plan is more costly than the lowest cost Bronze plan, but could provide more overall cost savings if a household uses healthcare frequently.
Ask friends and neighbors about their experience with a health insurance company
Buying a healthcare policy begins a relationship between consumer and health insurance company. The insurance carrier will be paying insurance claims, sending communications and answering any questions or concerns that arise. Are they good to work with? Is the company website easy to access, with all claims, payments and test results online and downloadable? Are claims paid in a reasonable time frame and without dispute? Talk to individuals who purchase their own health insurance and get insight on a company of interest. Or search online for ratings and reviews. Sites like Glassdoor provide insight into company culture, with ratings from both employees and customers.
Look at the deductible
A healthy individual can many times take on a health insurance plan with a large deductible to keep costs low. But families with small children or individuals with health problems want to make sure their health plan will pay a majority of the bills. Health insurance plans are currently structured by metal level to make understanding the level of coverage easier. Bronze plans pay 60% of insurance and medical costs, and consumers pay 40%, Silver plans pay 70% of insurance and medical costs, and consumers pay 30%, Gold plans pay 80% of insurance and medical costs, and consumers pay 20%, and Platinum plans pay 90% of insurance and medical costs, and consumers only pay 10%. Bronze plans are the cheapest health insurance option since they pay out the least amount, and Platinum plans are the most expensive because they cover most healthcare costs. It’s important to always do the math and determine how much healthcare will be used. An individual with a chronic condition can actually save more money over a 12-month period by purchasing a Gold or Platinum plan.
Understand the out-of-pocket maximum
Ultimately, the total out-of-pocket maximum is the total amount that could be incurred during the insurance policy term. This total includes the deductible, plus other charges that could be incurred. This is in additional to the monthly cost of a healthcare plan. So, if a catastrophic incident occurred, the out-of-pocket limit/maximum is the most the individual is responsible for for in-network services. This limit does not apply to out-of-network care received.
These eight considerations should help individuals and families determine what health insurance plan is the best fit for their medical needs.