The Open Enrollment deadline is just a few days away – on February 15th. And now that the Affordable Care Act is the law, health insurance is mandatory for most Americans. But before you panic about adding yet another expense to your list of monthly bills, take a deep breath.
“I think everyone has multiple options no matter their situation,” says Hector De La Torre, executive director of Transamerica Center for Health Studies, a nonprofit foundation dedicated to researching health care issues. He suggests comparing pricing for different plans the same way you would if you were shopping for a car.
“Understanding your options can take a lot of the anxiety and guesswork out of [shopping for health insurance],” agrees Trent Bryson, a health insurance expert and employee benefits consultant in Southern California. Still unsure about where to start? “There is not any difference in price from buying your health insurance online or through an agent, so I would recommend reaching out to a qualified licensed agent,” Bryson advises.
There may not be a one-size-fits-all solution when it comes to health care, but depending on your personal situation, you might have more affordable health insurance options than you think. Read on to learn about five of them.
Federal Subsidies
While the law requires most Americans to either purchase health insurance or pay a fine, it also has some provisions in place to help cover the cost of health insurance for lower-income households. Finding out whether or not you qualify is simple, according to Bryson. “You simply need to know how much you make and if you don’t have any income, you may qualify for some free to very little cost programs.”
To give you an idea of who might qualify for a subsidy, De La Torre provided some quick examples. “For 2015, an individual making between $11,670 and $46,680 can qualify for a subsidy,” he says. The numbers for a family of four go up a bit, so if household income is between $23,850 and $95400, the family can qualify for a subsidy.
“Over 80 percent of people in the public exchanges have qualified for a subsidy of some kind,” De La Torre says. He recommends everyone who doesn’t have affordable employer-based coverage look into whether or not they qualify for subsidies.
One thing to remember? “Subsidies are only available in the public state or federal exchange, not in the private marketplaces,” De La Torre says.
Medicaid
What happens if you make less than $11,670 (or less than $23,850 for a family of four)? You might be eligible for Medicaid, which has also seen some changes thanks to the ACA. “It simply means that now, more people than ever qualify for this program,” says Bryson.
If you qualify for Medicaid, according to De La Torre, your monthly premium is free although you may pay some co-pays for doctor’s visits and the like. Medicaid can also help you if you lose your job and the health insurance that goes with it.
“There is no open enrollment for Medicaid,” says De La Torre. That means you don’t have to wait to get coverage until a predetermined time of year the way you might through the marketplace. “Medicaid doesn’t have that,” De La Torre explains. “If you’re in that income level – say you lose your job – you can sign up for Medicaid anytime through the year.
There’s one more wrinkle with Medicaid – some states have taken advantage of the Medicaid expansion while others have not. If you live in a state that has expanded Medicaid, you could be eligible for Medicaid if you earn a little more than the figures listed above.
“In states with expanded Medicaid, an individual can qualify for Medicaid with an income up to $16,105,” says De La Torre. “Or $32,913 for a family of four.”
Shopping The Marketplace
This might seem counter-intuitive, but simply visiting the public marketplace might turn up some surprisingly affordable health insurance options. In some places, increased competition in the marketplace has had a beneficial impact on prices.
“It happened this year,” says De La Torre. “Because new insurers jumped into the marketplace, they held prices steady. Every state had at least one additional plan provider selling insurance in the exchange compared to last year, so 90 percent of consumers across the country can choose from three or more health insurers. More choice translates into controlling cost.”
Additionally, because of the ACA, all health plans are essentially the same in terms of the benefits they provide. “The only difference is the share of the cost,” explains De La Torre. “The monthly premium changes based on how much you are responsible for and how much the insurance company is responsible for.”
For example, De La Torre says, if you’re healthy and only go in once a year for a check-up, it might make sense to go with a cheaper monthly premium and pay more for your office visit co-pay. Conversely, if you have a prescription you fill regularly and need to see doctors more frequently, choosing a higher-cost monthly premium plan makes sense because your co-pays won’t cost so much out of pocket each time.
“It’s a trade-off, and only you can answer the question of which is right for you depending on your health situation,” De La Torre says.
Catastrophic Coverage
As the name implies, this type of insurance is meant to provide someone with a low-cost plan that will help in the event of a catastrophic event, like an accident or a serious illness such as cancer. It’s worth noting that this option is only available via the public exchange.
“These plans were really common before the ACA, but now they’ve almost been phased out,” says De La Torre. “They are only available for people under 30 now. If you sign up for this kind of policy, you’re taking a calculated risk that you’re not going to spend the deductible.”
That’s because – while this policy might cost quite a bit less month-to-month – the deductible is extremely high. “You will not get anything covered until you reach the said deductible,” explains Bryson. “So if you have a $5,000 deductible, you would be paying out of pocket until you hit the $5,000 amount.”
Let’s look at a quick example: A 25-year-old living in California could get a “minimum coverage” plan for as low as $141 a month (without any assistance) through the state’s public exchange, Covered California. However, the deductible for this plan is $6,350. This same 25-year-old could also opt to go with a “platinum” plan which could cost as much as $334 a month, but has no deductible.
Who might this be right for? According to Bryson, young, healthy people
don’t expect to visit the doctor, but who could afford a large deductible if something serious happened.
And – if something serious did happen – having this policy would limit the amount you’d have to pay in medical costs for the year. As De La Torre says, “Paying $10,000 is better than $100,000.”
Buy Through Your Workplace If You Can
While you might not love the health insurance your employer offers, it does come with some benefits you should seriously consider.
“The easiest way to save money on health insurance is to buy it through the workplace because the premiums you pay are pre-tax,” says Bryson. That means your health insurance premium is taken out of your paycheck before you are taxed on your income, which lowers your tax bill at tax time.
Again, if you’re still unsure, it might be worth getting a professional’s help. “Have a conversation with an agent,” suggests Bryson. “Every insurance company treats coverage a little differently. For example, if you take prescriptions, you really want to find the insurance company that charges you the least for that prescription.” An agent, he suggests, could help you find the right plan for your situation.
