If you’re shopping for your own health insurance, the Patient Protection and Affordable Care Act (ACA) helps make it more affordable. Still, that doesn’t mean picking the right plan is easy. In fact, it’s trickier than ever because the ACA has turned health care into a consumer product, with the onus on you to select the plan that offers the best value. “Be prepared to spend as much time on your health care decision as you would if you were buying a new car or making a major purchase for your household,” says Carolyn Kelly, vice president and public exchange strategy leader for United Healthcare.
Open enrollment, the period when the federal government allows you to choose a health plan or to select a different plan if you already have health insurance, runs from November 1, 2016, through January 31, 2017. But you can enroll at other times of the year if you get married, have a baby or lose coverage. Medical care continues to be expensive, with lots of potential costs at risk. To pick the right plan for you and your family, take these healthy steps.
Talk the talk. Like most industries, health insurance has its own lingo, such as deductible, copay, coinsurance and network. If you’re not sure what these terms mean, get familiar with them. “Shopping for health insurance without knowing the language is like learning how to ask where a museum is in French when you’re traveling in France, then not having enough vocabulary to understand the response,” says Robin Gelburd, president of FairHEALTH, a nonprofit organization with a mission to bring fairness and transparency to health insurance information. To get the gist of standard health insurance terms, check out the glossaries on fairhealthconsumer.org and healthcare.gov. Print a cheat sheet of insurance definitions for your reference.
Pick a metal. Healthcare.gov offers four health plan types from which to choose: Bronze, in which 60 percent of health care costs are covered by an insurance company and 40 percent is paid by you, the consumer, with the lowest monthly premium; Silver (70 percent covered/30 percent paid for by you); Gold (80 percent/20 percent paid for by you); and Platinum (90 percent of costs covered, with 10 percent paid for by you, with the highest monthly premium). There’s also catastrophic coverage, which pays less than 60 percent of the total cost of care on average. It’s only available to those under 30 or who have a hardship exemption. “Focus on the cost of the monthly premium to select a metal level plan you can afford,” Kelly says. Buying health insurance that’s beyond your budget is a deal breaker. If you can’t keep up with the monthly payments, you’re not going to keep it. Note: The Silver level plan is the only one that subsidizes your health insurance expenses. If you qualify based on your income, it can reduce your out-of-pocket costs.
Next, choose a plan with providers you currently use. Once you’ve picked the metal level plan you can afford, ask yourself: Do my current providers accept this health insurance? In other words, are the physicians and hospitals you like and use in the health plan’s network of providers and facilities? If you’re having a baby and anticipate needing an epidural or a C-section, you also want to know the anesthesiologist you end up with is in-network too. Bottom line? To keep medical costs low, it pays to stay in-network with all of your providers.
Do the math. As you’re narrowing the field, compare the products and services that each contender health plan offers. What will you pay for a medical service? When you visit the doctor, what will your copayment be? What’s the deductible? To estimate your health care expenses with any potential carrier, go online to your current carrier and look at last year’s claims for medical tests, doctor’s visits and prescriptions. Last year’s medical expenses are a good indication of what this year’s will be. If you went to the doctor five times last year, plug in what it would cost in each contender plan if you went to the doctor five times this year, and so on. “Arm yourself with the information you need to make a good decision,” Kelly says.
Check your work. At this point, you have enough information to pick a decent health plan for your family. Still, your health insurance is only as good as the carrier. If you’re going to need a medical service that’s specific to you, call the carrier’s 800 number before you sign on and ask if they typically cover that procedure. The last thing you want is for the carrier to tell you the service wasn’t medically necessary and refuse to pay for it after the fact. Another smart thing to do before signing on with a plan: “Call your State’s health insurance department and ask if they’ve received any complaints about the insurer,” Gelburd says.
Phone a friend. If all this feels overwhelming or if you’d like to compare notes, consider working with a health insurance broker. This licensed and certified professional has gone through federal training to understand the ACA and the financial implications of the various choices. “Brokers represent all carriers and can look across all plans to find the best one to meet your needs,” says Todd Titsworth, a health insurance broker. A health insurance broker can help you compare your best options, 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,” says Katherine Woodfield, a health insurance consumer advocate and owner of healthcare-insurance-education.com. To find a licensed health insurance broker in your area, visit healthmarkets.com or healthcare.gov.
Consider signing up for a health savings account. If you ultimately choose a low monthly premium and a high deductible, which may make the most financial sense if no one in your family uses the medical system often, consider opening a health savings account (HSA). It’s a fund you create that must be used for qualified medical expenses. You can use it to pay for health care as you go, just like you do for groceries or gas and you don’t have to spend it down every year like you do a flexible spending account.
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 these services. For more information about health savings accounts, visit the website for the IRS: irs.gov/publications/p969/index.html. If you’re not eligible for an HSA, a personal savings account designated for medical expenses will do.