If you want a good deal on anything in life, one of the best things you can do is shop around. This goes for everything – whether you’re booking a flight or buying a new shirt – you want to make sure you’re actually getting a good deal. As you start thinking about your health insurance needs and costs, you’ll want to have this mentality.
“Although it may be tempting not to shop around – especially for consumers that are happy with their 2014 plans – many carriers are offering new or modified plans in 2015 and the premium tax credits might have changed,” says Dena Mendelsohn, a health policy analyst at Consumers Union. “That plan you were happy with within 2014 may have more cost-sharing or more expensive premiums in 2015.” So before you automatically renew your existing plan, you should shop around.
Keep reading to learn more about why it’s key for you to re-shop your health insurance…
3 Important Reasons Why You Should Always Shop Around For Health Insurance
#1 – Changes to your income may affect your qualification for federal subsidies
If you’re on the public (government) health exchange, there is a laundry list of factors that affect each consumer’s eligibility for premium tax credits, according to Mendelsohn. For example, “Changes in income, family size, and eligibility for ‘minimal essential coverage’ from an employer, Medicaid, Medicare, or certain other forms of insurance can all affect eligibility,” she says.
Mendelsohn also says that the number of federal subsidies available may change based on what’s being sold on the public exchange for 2015. “By understanding how these factors influence how much they will pay for insurance coverage in 2015, we hope consumers will purchase the plans that work for them, at a cost they can afford,” says Mendelsohn.
Shana Charles, Ph.D., the Director of Health Insurance Studies and a research scientist at the UCLA Center for Health Policy Research explains, “Subsidies are based on income level and they try to base your share of the premium on your projected income, so when you go to one of the public exchanges, it allows you to state what your income is and what you expect it to be.”
As a result, if your income has changed, this could affect your qualification for subsidies for government assistance programs. For example, “if your income went down and you’re in a state with Medicaid expansion, you may be eligible for that program,” says Charles.
Consumers who no longer qualify for subsidies should consider shopping on the private exchange, which may offer more plans to choose from.
#2 – New plans are available with better prices and coverage
In 2021, there are more public and private providers, which means more competition, especially among public providers. And the increased competition may result in lower prices and better plans for you to choose from. Michael Morrisey, Professor of Health Policy and Management at the Texas A&M; Health Science Center, says, “It appears that some insurers were reluctant to enter the public exchange the first year, but in any event what we’ve seen in the second year is an increase in participants in the exchange this year, so there are more options.” However, Morrisey says this depends on your state, so it’s important to do your research to see how many providers are participating in your state’s exchange. “More choices will increase the likelihood that you will find a plan that is reflective of your health needs – so you definitely want to see what else is out there.”
In fact, there appears to be a large increase in the number of new public and private providers for 2021, according to Allison Hoffman, an Assistant Professor of Law at the UCLA School of Law. Hoffman, who specializes in health care law and policy says, “A McKinsey study reports that the number of health insurers competing in the exchanges has gone up – with a 26 percent increase in the 41 states they studied.” And with more competition, Hoffman says that insurers should offer better plans or lower prices to compete to get more customers.
And Charles adds that some companies are jumping into the public and private marketplaces because they think they have a better geographical advantage. “For example, we have a thriving health insurance market in California, and it includes plans that are specific to certain areas – such as San Diego County, Alameda County, and North Bay counties, and even to certain ethnicities, such as the Chinese Community Health Plan.” Again, more insurers lead to more competition, which is good for the consumer.
#3 – Changes in your health may require you to add coverage
If your health needs have increased, you may need to get a plan that better suits your new medical status. According to Morrisey, before the ACA, you would often face an insurance company that would automatically raise your rates if your health deteriorated substantially. “But now, insurers can’t increase your rates based on health conditions.” However, consumers still need to shop around if their health has changed
The plan that you choose should be based on weighing your monthly costs, deductible amounts, and balancing this information against the type of health service you need. But to make a good decision, Hoffman’s final advice is that consumers should take the opportunity of open enrollment to rethink their needs and take a second look at the plans to see what has changed from the year before.
