FAQ: What to know about picking a health plan
Signing up for health insurance is one of those things that you’re probably not looking forward to doing, but that you don’t want to miss out on, either.
Open enrollment — your one chance to sign up for health insurance for 2020, barring a qualifying life event — begins Nov. 1, and runs for just six weeks in most states. Some states have extended deadlines, through late December or January, but in most of the country, if you want to sign up or switch plans, you only have until Dec. 15.
“So pay attention,” said Karen Pollitz, an expert on private insurance at the Kaiser Family Foundation. “If you wait till Dec. 16, too late. You won’t have an opportunity to buy health insurance again until 2021.”
Even if you already have insurance, it’s often worth shopping around during open enrollment, because plans, insurers, premiums and subsidies change from year to year, and you may be able to find a better deal, or better plan, than you currently have.
Every year, though, most people who wind up needing to buy insurance through HealthCare.gov or a state marketplace are doing so for the first time, Pollitz said. If that’s you this year, here are some things to know.
Do I need to buy insurance through HealthCare.gov or my state’s marketplace, or are there other websites that are legit?
There are alternative sites that allow you to shop around, compare and buy health insurance. They’ve been around for awhile, in some capacity, but “this year something’s going to be a little different,” Pollitz said. “The Trump administration is really promoting alternatives to HealthCare.gov, kind of private marketplace sites that compete with HealthCare.gov. Be very careful about that.”
These alternative sites do sell real, legitimate plans that you will also find on the marketplace, but they don’t always display all of your options, and many also sell plans that do not offer all the benefits and protections required by the ACA — plans that may have attractively-low premiums, but that can exclude pre-existing conditions, or offer you almost no real coverage.
“Things like short-term policies, things like cancer-only policies or accident-only policies, which really are not major medical insurance, they don’t begin to offer you the protection that a marketplace plan would,” Pollitz said. “But they’re cheaper, and they tend to pay handsome commissions to the websites and to the brokers who sell them. So you really do need to be careful.”
It is fine, she added, to browse on these third-party sites, but it’s also always worth cross-checking any plan you’re considering with HealthCare.gov or your state’s marketplace.
All of the plans look very expensive. I don’t have to buy coverage anymore, right?
As of last year, the Trump administration is no longer enforcing the individual mandate under the Affordable Care Act. So if you choose not to buy health insurance for the coming year, you won’t have to pay a penalty, at least not to the federal government — some states do still require residents to have insurance or pay a fine.
But if you’re thinking of forgoing health insurance because of the cost, it’s always worth checking first to see whether you qualify for a subsidy.
“Don’t spend too much time looking at the sticker price, because almost nobody pays that,” Pollitz said. “About 90% of people who buy through the marketplace qualify for help, premium tax credits that will reduce your monthly premium. And more than half also [qualify] for cost sharing reductions that will reduce the deductibles and copays.”
What should I put down for my income if it’s variable and unpredictable?
This is a common question — and source of stress — for people applying for insurance on the exchange.
“It definitely is tricky,” said Tara Straw, a senior health policy analyst at the Center on Budget and Policy Priorities. “The general advice is to keep the marketplace updated with your best estimate. And to do it in a timely way to minimize any amount that you may need to repay.”
If you truly have no idea how your income might change in the next few months, she said, you can just put in what you’re currently making when you first apply for coverage. If that changes significantly, you can call, or go back into your profile on the site and update your income at anytime throughout the year.
Also worth knowing, Pollitz said, is that “there are professionals that are there to help you. They are navigators that the marketplace pays. They are objective, professional, trained assisters who can walk you through the whole application, your plan choices, help you through that whole process.”
There are also brokers who can walk you through some of these questions, but just be aware that, unlike with the navigators, brokers work on commission, so they might have an incentive to steer you toward certain plans.
To find a navigator or a broker, go to HealthCare.gov and click on “find local help.”
Could the ongoing lawsuit challenging the ACA affect my insurance for next year?
The short answer, Pollitz said, “is nobody knows what’s going to happen with this lawsuit, and what the Trump administration will do. So I think the best that people can do now is just move forward. It’s open enrollment now. If you need health insurance, sign up for it. And if something happens down the road, then we’ll all have to figure out what that is and how to respond.”
Straw said she expects that even if the appeals court does strike down all or part of the ACA, that decision would likely be stayed, and not go into effect any time soon.
“I can’t see any judge saying that they would cause this kind of disruption, when it seems pretty clear that this case is likely going to the Supreme Court,” she said.
What do I need to know about the different types of health plans?
If you are looking to get insurance through HealthCare.gov or your state marketplace, you’ll see four tiers of plans: Bronze, Silver, Gold and Platinum.
Bronze plans have the lowest monthly premiums, but also have the highest deductibles. As you move up the metals, from Bronze to Silver to Gold to Platinum, premiums generally go up and deductibles generally go down.
In some cases — if you’re under 30, or if you qualify for a hardship or affordability exemption — you may also see options pop up for catastrophic plans, which have very low premiums but don’t cover much of anything until you hit your deductible, which for 2020 is $8,150. Catastrophic coverage is really only good for protecting you against massive medical bills in the case of something like a serious accident or a cancer diagnosis.
Within each tier, there are effectively two kinds of plans: ones that require you to stay in-network, and ones that don’t.
HMOs (Health Maintenance Organizations) and EPOs (Exclusive Provider Organizations) only cover you when you go to doctors or hospitals that are in-network. They do not cover you if you go to an out-of-network provider, unless it’s an emergency.
PPOs (Preferred Provider Organizations) and POS (Point of Service) plans generally cover a higher percentage of your costs when you stay in-network, but do cover a certain amount if you go to out-of-network providers.
PPOs typically have higher premiums than HMOs, but give you more flexibility and choice.
What costs should I be taking into account when comparing plans?
The main cost that people tend to zero in on when choosing a health plan is the premium, the amount you pay each month just to have insurance.
Kavita Patel, a primary care doctor in Washington D.C. and a fellow at the Brookings Institution, said that while premiums are important, they’re just one factor people should consider when evaluating which health plan makes the most financial sense.
“I tell everyone to be incredibly vigilant about looking at deductibles, as well as understanding what copayments are, not just for office visits, but for the emergency room and for medications,” Patel said.
A plan that has a low monthly premium, but a higher deductible and higher copays — for everything from specialist visits and trips to the emergency room to hospitalization and prescription drugs — could end up costing you more, in the end, than a plan with a higher monthly premium.
On top of the premium, deductible, and copays, it’s also worth paying attention to whether the plan has coinsurance, and what your total out-of-pocket maximum is per year.
“Striking that right balance, between the amount that you pay every month and the amount that you may pay if you get sick, is really important for consumers,” said Straw, of the Center on Budget and Policy Priorities.
The easiest way to do an apples-to-apples comparison of plans, she said, is to look for a document called a Summary of Benefits and Coverage (SBC), which not only goes through the plans’ features, but also lays out different potential scenarios — say, a broken arm, or an emergency appendectomy — and details how much insurance would cover, and how much you would be expected to pay out-of-pocket.
“In general, it’s a good idea to buy as much health insurance as you can reasonably afford,” said Pollitz, of the Kaiser Family Foundation. “Because being under-insured can end up being false savings. The couple hundred or even thousand that you saved in premiums will be more than offset by that first big medical bill that isn’t covered.”
Cost aside, what other factors should I consider when choosing a plan?
First and foremost, Straw said, “if your choice of doctor or hospital is important to you, make sure to do your homework on that, to see if they’re in-network.”
There are provider directories online, both on the exchanges and on individual insurer websites, but they’re not always accurate. Calling your doctor directly, to ask whether they accept the plan you’re considering, is generally a safer bet.
In addition to looking up specific doctors, Patel also recommends looking to see whether hospitals both near your home and near your office are in-network with the plans you’re considering.
“If you have, God forbid, an emergency, you tend to get taken to one of those closer facilities,” she said. “If you’re blocks away from an out-of-network hospital, guess what? High likelihood of being both out-of-network costs, and then potentially surprise billing as well.”
It’s important, when choosing an insurance plan, to think not just about your known or anticipated health care needs — doctors you know you go to, a chronic condition already have — but also the potential unknowns.
“I think the thing that people do not consider is, does it cover services in the case of catastrophic illness? Meaning, if I do get a rare cancer, will I be able to go to the best cancer center in my region, for example,” Patel said. “Those are not trivial issues, but it brings up sometimes things that people just don’t want to think about when they’re making insurance decisions.”
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