The Affordable Care Act (ACA), also known as “ObamaCare,” put into place many provisions to help protect consumers and make health insurance more accessible. However, purchasing your own insurance from the national marketplace or your state marketplace can be intimidating and overwhelming, not to mention frustrating. While your feelings may be justified, you don’t want to let this be a barrier to you and your loved ones finding the insurance plan that best meets your needs and financial means. Here are some guidelines and links that I hope you will find helpful.
See if you qualify for savings based on income.
The reason to buy your plan from a marketplace rather than direct from insurance companies is to have access to premium tax credits and cost-sharing reduction subsidies, which lower your out of pocket costs for health insurance and health care. You qualify for these savings based on projected income for the upcoming year for which you are applying, NOT on your income for the current year. So people who are currently applying for 2016 coverage must estimate their 2016 income, which you can do here.
To qualify for savings through the marketplace, your projected income must fall within a designated range which varies by state. If your income is below the minimum cutoff, you will likely be provided with free or low cost health insurance through Medicaid and will not be allowed to purchase subsidized private insurance through the marketplace. You can still purchase private insurance on your own directly from the health insurance company, but you will pay full price and will not receive any government subsidized savings. If your income is higher than the maximum cutoff, you can purchase insurance through the marketplace but you will not qualify for savings. Thus, you may also want to explore plans offered directly by insurance companies because you will likely have access to a greater range of plan choices that are not offered on the marketplace.
Choose Silver if you qualify for cost-sharing.
If you qualify for cost-sharing reduction subsidies, you must choose a Silver level plan if you want to receive them. They are the only plan that allows you to have both premium tax credits and cost reduction subsidies if you qualify for both (range of 100% to 250% of the Federal Poverty Level). However, all Silver level plans are not created equally. Read this in depth article to find out how to maximize your cost sharing by purchasing a Silver level plan.
Some plans waive the deductible for certain services!?!
You read that right. Yet there are many people who are not aware that they can receive coverage for certain health care services without having to pay their deductible. The Affordable Care Act mandates that compliant plans waive the deductible for preventative services so chances are your plan is one of them. However, there are a number of plans that also waive the deductible for other services, especially at the silver level and above. Unfortunately, it can be very difficult to figure this out. You will have to carefully read the plan benefits summary and even then it can be confusing. I suggest familiarizing yourself with the format of benefits summaries, which are now standardized because of the Affordable Care Act. Here are three ways to figure out if and when you need to pay your deductible by viewing your benefits summary.
- See Page 1, Important Questions, “What is the overall deductible?” The answer will tell you what your individual and family deductibles are and will hopefully state what they do not apply to if the company is being transparent. For plans that require you to pay the deductible for all services (except preventative), they will usually state it here. Sometimes they will refer you to Page 2 to see what services the deductible does and does not apply to which is a clue that your plan does in fact waive the deductible for some services.
- Page 2 is where the benefits summary begins to list specific services and your cost for participating and non-participating providers. Typically, you will see copay amounts (flat charge that you are responsible to pay) and coinsurance amounts (percentage of the overall fee that you are responsible to pay). If your plan waives the deductible for some services, you will notice that it is specified for each service whether or not you have to pay the deductible. When you do have to pay it, you will see something like “Deductible then 20% coinsurance” listed. When you don’t have to pay the deductible, there may simply be a copay or coinsurance listed with no mention of the deductible. Sometimes you will notice an asterisk next to some services with a footnote at the bottom of the page that states “deductible does not apply.” This means that you do not have to pay the deductible for those services with an asterisk.
- See Limitations & Exceptions, beginning on Page 2, for another place where you might find out if your deductible is waived. There may be a note that indicates that there is no deductible for that service, or that there is no deductible for participating providers for that service.
Below is a sample benefits summary for you to view. Don’t be intimidated – knowledge is power!
PacificSource OR Standard Gold Plan
Consider a HDHP + HSA.
A High Deductible Health Plan (HDHP) is a plan with a minimum deductible of $1300 for individuals and $2600 for families. If your HDHP qualifies, you have the option of opening a Health Savings Account (HSA) with the insurance company or a bank of your choosing. Funds from your HSA may only be used to pay for qualifying health care expenses. Two benefits of having a HSA are that the money you contribute is tax-free and the money you contribute stays with you rather than going to an insurance company. A HSA may be particularly attractive for someone who is healthy and does not use their health insurance benefits often. Your HSA will accumulate over time and be there when you need it. Not surprisingly, health insurance companies are making it increasingly hard for you to find a HDHP that qualifies for a HSA. The two best resources I’ve found that explain the rules are here and here. I suggest finding a credit union that offers HSAs and asking a representative to help you choose a HSA-eligible HDHP. Note that credit unions are more likely to have low fee or no fee HSA accounts as opposed to banks and private companies.
Important detail about HDHPs and family deductibles.
Most employee sponsored plans and lower deductible plans for families allow the deductible to be met for an individual within the family when he or she has met the individual deductible amount. In other words, if the plan has a deductible of “$1500 individual/$3000 family,” an individual in the family can meet the $1500 individual deductible and receive coverage before the $3000 family deductible has been met. However, in a HDHP the entire family deductible must be met before any individual can receive coverage. Read this article to learn more. **For this reason, if you are purchasing a HDHP for a family of two you may be better off buying two separate individual plans rather than a family plan. For families of three or more who are purchasing a HDHP, it makes more sense to go with a family plan.
I hope this information will help you begin the process of learning how to navigate the health insurance system. I encourage you to call an insurance company representative to ask questions because of the variability that still exists despite the ACA. In addition, many communities offer resources for free assistance with health insurance. Follow this link to find local help with insurance.
[DISCLAIMER: I strongly encourage you to verify your benefits with your insurance company before seeking health care or making important decisions about your plan. I am not a health insurance benefits specialist, nor a representative of your insurance company.]
References
ObamaCare Facts – Very comprehensive site!
How the Family Deductible Works in HDHPs
HSAs: Readers offer questions and tips for using health savings accounts
HSAs: The ABCs of health savings accounts
HSAs: For your financial health, examine your health savings account
HSAs: The pros and cons of health savings accounts
IRS Rules for HSAs
Take Charge of Your HealthCare: The Language