Choosing the best health plan for your family can be confusing, and computer glitches at healthcare.gov aren’t helping. Still, it can be done.
If you don’t get health insurance through your employer, your spouse’s employer, or a parent if you’re 26 or younger, the Patient Protection and Affordable Care Act (ACA), a.k.a. “Obamacare,” should make getting affordable health care easier. “Health care reform is awesome,” says Katherine Woodfield, an insurance expert and author of Don’t Buy THAT Health Insurance: Become an Educated Health Care Consumer. “It’s the first federal oversight of a completely non-federally regulated industry in 100 years.” Think of it as consumer protection.
Even though coverage under Obamacare starts on January 1, 2014, open enrollment, the period when the federal government allows consumers to choose a health plan or to select a different health plan if they already have health insurance, runs through March 31, 2014, for the first year of the ACA. The sooner you get your application in, the better, because the longer you delay, the longer you’ll have to wait for your health insurance coverage to start.
If you enroll between the 1st and the 15th of the month, your coverage will start the following month. But if you enroll between the 16th through the 30th of the month, your coverage won’t start until the month after that. For example, if you wait until the last day of open enrollment (March 31st), your coverage won’t begin until May 1, 2014. Delaying can cost you. Going three consecutive months in 2014 without health coverage, even during open enrollment, will assess a $95 penalty on your income taxes. The penalty for going without health insurance for 90 days or more increases over time. By 2016, it will be up to $695.
While healthcare.gov is getting the kinks out for online applications, you can choose the “Apply by Phone” option at www.healthcare.gov. A navigator will send you a paper application, which you can complete and mail back. You can reach a navigator by calling 1-800-318-2596 or by visiting www.healthcare.gov and clicking “Chat Now” in the bottom right-hand corner.
One caveat: “A navigator isn’t allowed to give you an opinion,” Woodfield says. If you want that kind of help, consider working with a health insurance agent, a licensed and certified professional who has gone through federal training to understand the ACA and the financial implications of the various choices, including off-exchange plans, which are designed for consumers who aren’t eligible for federal subsidies.
A health insurance agent can help you choose the best plan for your family and offer plan recommendations. “Having someone assist you who is licensed, educated and experienced releases you from the burden of having to do it yourself,” says Mike Stahl, a senior vice president at Healthmarkets.com, a national health insurance agency that employs over 3,000 agents throughout the U.S. and offers over 80 insurance carriers from which consumers can choose. An agent can help you compare your best options both on and off the ACA exchange, help you determine if you’re eligible for a tax credit and even complete the health insurance application process for you.
Agents receive a commission from insurance companies for their services, which are free to consumers. “There’s no discount by skipping an agent, so you might as well take advantage of the expertise,” Woodfield says. To find a licensed health insurance broker in your state, visit www.healthmarkets.com or www.healthcare.gov, and click on “Contact Us” at the bottom of home page, then click on “Find Local Help.”
There’s a lot to know about the ACA, so be sure to visit www.healthcare.gov if you’re in the market for health insurance. In the meantime, here are more tips for simplifying the health care shopping process, whether you choose an ACA plan or a plan that’s not offered on the exchange.
To save on health care costs, focus on a health plan with the highest deductible. The ACA is designed around cost sharing. It offers four plan types: Bronze, in which 60 percent of health care costs are covered by insurance companies with 40 percent of health care expenses paid by consumers, with the lowest monthly premium; Silver (70 percent covered/30 percent paid for by consumers); Gold (80 percent/20 percent paid for by consumers); and Platinum (90 percent of costs covered, with 10 percent paid for by consumers, with the highest monthly premium).
For each of these plan types, the essential health benefits are standard. Under the ACA, all health plans must include coverage for ambulatory patient services (outpatient care you get without being admitted to a hospital), emergency services, hospitalization (such as surgery), maternity and newborn care (before and after your baby is born), mental health and substance use disorder services, including behavioral health treatment (this includes counseling and psychotherapy), prescription drugs, rehabilitative and habilitative services and devices (services and devices to help people with injuries, disabilities, or chronic conditions gain or recover mental and physical skills), laboratory services, preventive and wellness services and chronic disease management and pediatric service.
When choosing a plan in general, Woodfield recommends opting for the health insurance plan with the lowest annual cost to you. “More often than not, that’s the plan with the lowest premium,” Woodfield says. Her motto: “Keep fixed expenses low,” so you’ll have the least amount of money automatically going out of your pocket every month. When you pay the lowest monthly premium possible, you’ll generally pay less overall in overall medical care expenses.
Skeptical? Do the math. Woodfield suggests adding up the total annual premium of the ACA or other health plans you’re considering plus the total cost of your predictable medical expenses per year. Keep in mind that under the ACA, preventive health services for you and your children, including your annual mammogram and wellness visit and their routine immunizations and well-child visits are free with no copay or coinsurance required, for all U.S. health plans.
“Go online to your current carrier and look at your claims last year for medical tests, you and your family’s doctor’s visits and prescriptions,” Woodfield says. If, for instance, your total medical costs for the year added up to $6,000, on the (60/40) Bronze plan, you’ll have to pay 40 percent of those costs, or $2400 and your premium, at say, $100 per month, will be $1200 annually, for a total of $3600. If you’re on the (70/30) Silver plan, with a $200 monthly premium, you’ll pay $1800 in medical costs and $2,400 in premiums, for a total annual cost of $4,200, and so on.
Get the idea? In general, the higher your premium, the more you’ll pay out of pocket overall for medical coverage. Still, plug your numbers into the various plans options and see for yourself. “Go with the plan that is predictably going to cost you the least,” Woodfield says.
Sign up for a Health Savings Account. Consider allocating what you’d otherwise pay in a monthly premium into a health savings account (HSA), which is a fund that must be used for qualified medical expenses. Then, pay for health care as you go, just like you do for groceries or gas. The IRS deems what’s an acceptable medical expense for an HSA, but its list is much more comprehensive than the services a health insurance company will cover, which is an added bonus.
For example, “The IRS allows you to deduct acupuncture, chiropractic care, and orthodontic care,” Woodfield says. Many health insurance plans don’t cover them. For more information about health savings accounts, visit the website for the IRS: www.irs.gov/publications/p969/index.html. If you’re not eligible for an HSA, a personal savings account designated for medical expenses will do.
Consider add-on products. Monthly health insurance premiums never go away, but medical service costs do. Even if you have a major medical expense you can’t predict, like having an emergency C-section or a child who needs to be hospitalized, the maximum you’ll have to personally pay for all of your medical expenses on all ACA plans is $6,350 for an individual or $12,700 for a family annually. The Platinum plan is an exception. It has an out-of-pocket annual maximum of $4,000 for an individual and $8,000 for a family.
“For many people, $8,000 or $12,700 could be a significant percentage of their after-tax income,” Stahl says. Still, a large percentage of Healthmarket’s customers choose low-premium, high-deductible plans. “For those customers, we often counsel them to add supplemental health products, like an accident, disability or a hospitalization plan, which can very inexpensively offset a whole host of out-of-pocket expenses, including that big deductible they took on,” he says.
Choose a plan with providers you currently use. To keep medical costs low, it pays to stay in-network. If your doctor or your child’s pediatrician isn’t listed as a provider for a health plan you’re considering, call the doctor’s office to double check. Because of the ACA, physicians are re-evaluating the health insurance options, too.
For more information about the ACA and health insurance in general, visit The Alliance for Health Reform.
Sandra Gordon is an award-winning freelance writer who delivers expert advice and the latest developments in health, nutrition, parenting and consumer issues. Her most recent book is “Save a Bundle: 50+ Ways to Save Big on Baby Gear.”
Published: December 2013