Here’s a topic that has been in the news quite a bit over the past few years as the ACA(Affordable Care Act) has been implemented. The problem I’ve seen with most of those headlines is the distribution of a lot of misinformation which leads to confusion and makes it difficult for consumers to get accurate information. Without adequate information, it is difficult to make an informed decision regarding your personal health insurance protection so hopefully this article can clear up a few things.
My goal in writing this article is to show everyone that there is much more to look at other than what the premiums are for the coverage. The total cost including the premiums, deductibles, tax credits, tax deductions, co-pays, network etc. all need to be taken into account when reviewing coverage each year. Simply renewing your plan from one year to the next can increase costs or the amount of risk you accept by hundreds or thousands of dollars over the course of a year. Whether looking at the most valuable options to offer employees as a business, an employee reviewing options offered, or an individual shopping for yourself or coverage for your family, I want to try to help you make the most informed decision to maximize your resources. I’ll try to talk briefly about what has changed in the health insurance market in recent years and some items to consider when evaluating options that are presented to you for the upcoming year.
While Healthcare Reform is still not completely settled, and the rules could change quickly, we have some basic guidelines to consider barring any major changes from the Federal Government. A goal of the ACA is to have everyone covered by health insurance either through their employer, or an individually owned plan and a penalty has been established for not having coverage. Plans have to be consistent and cover certain expenses associated with Essential Health Benefits and cannot have a maximum lifetime benefit amount. Health insurance companies have to accept anyone that applies and pays premiums for coverage as long as they apply during the open enrollment or a special enrollment period. The last change is the biggest when looking at individual or family coverage that is not purchased through an employer as the guaranteed coverage aspect was already true for those that had coverage through an employer prior to the ACA. No one can be turned down, but the enrollment has to be done during a specific time or after a life change otherwise known as a “Qualifying Life Event.”
Folks that don’t have health insurance available through a group plan offered by an employer may be able to get assistance in paying their monthly premiums through a tax credit offered by the federal government. This is done by applying for coverage through the Marketplace. This tax credit is based on the number of people in your family or household and the family or household income. People can apply directly on the exchange website, by phone, or work with a Navigator or Insurance Agent/Broker (like me) to determine eligibility and get help choosing coverage. If it is determined that no tax credit is available, applications can still go through the Marketplace or be sent directly to the insurance company that is chosen.
Now that we’ve looked at some of the key changes and how to get coverage, let’s discuss what to look at when choosing coverage.
1. First, though not completely foremost, is the premium. That is the amount it will cost each month to purchase coverage and can vary significantly from one policy to the next. This may be shared by either the employer paying a portion or through the tax credit mentioned earlier, but not necessarily either leaving the remainder to be covered by the consumer.
2. Next, consider the deductible. This is how much the individual or family has to pay for services before the insurance company will start helping to cover expenses outside of the preventative care benefits embedded in policies.
3. Then, evaluate the maximum out-of-pocket which is the most the individual or family will pay along with the deductible before the insurance company takes over the costs completely. The co-insurance, which is usually described in percentages, is the amount shared by you in addition to the deductible until the maximum out-of-pocket is met.
4. The final item to look at is the network of the insurance company you are considering. This is important because you want your preferred doctor or hospital to be in-network or the costs could be significantly higher simply by being seen by that doctor or at that facility if it is out-of-network.
Aside from traditional options, there are also options classified as High Deductible Health Plans. These are different than the health insurance coverage of the past, but they do have some specific tax-related advantages. These plans are structured a little differently, but a little education may prove to be valuable for individuals and for those in group health plans that are open to a slightly different risk management strategy. The details can be cumbersome, but there are many resources available, including working with your Agent/Broker to help determine if this type of plan is best for your situation.
Remember, open enrollment for 2016 is right around the corner and will be open between November 1st, 2015 and January 31st, 2016. Often, even a small time investment in getting a second opinion and not just automatically renewing an old plan can yield significant returns. Hopefully this information has been beneficial so you can make a more informed decision when evaluating your healthcare options for 2016.
Editor’s Note: Below, you’ll find a testimonial from Dave Thorell of KRVN. Mike (Beacon Insurance) is Dave’s insurance agent and has been helping him through cancer treatments.
For more information, contact Mike Wilken at (308) 646-0683.
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Read Mike’s post on the Medicare Age – What You Need to Know