Health Insurance Open Enrollment For 2018

The time to purchase a new health insurance plan for 2018 is almost here. Depending on the state in which you live, there will be a many options for you to consider.

Open enrollment begins November 1, 2017, and runs through December 15, 2017. In order to have coverage on January 1, 2018, you must either renew the plan you have or select and enroll in a new plan by December 15, 2017.

There are several things to consider in preparation for open enrollment. First, open enrollment isn’t just for people who don’t have health insurance. Every year those who pay for their own health insurance must shop for a new plan, or re-enroll in their existing plan. It is important for individuals to realize they have a choice, and shopping for a new health insurance can save money– sometimes hundreds, if not thousands of dollars.

Understanding the most critical terms will help you discern what is most important for you and your family when shopping for a health insurance plan. For example, knowing what a deductible is, understanding coinsurance and looking at pharmacy benefits are critical before purchasing a plan. Here are some of the most critical facts you need to know:

Deductible: This is how much you have to pay out of pocket before your health insurance kicks in. The higher the deductible, the lower your monthly insurance costs. More and more Americans have a high deductible, sometimes over $10,000, so it’s important to think about how much routine medical expenses you will have during a year. If you see a doctor several times a year, have a high chance of being hospitalized and take prescription drugs, it might be better to pay for a plan with a smaller deductible, which will lower your out of pocket cost overall.

Coinsurance: After you have had enough covered medical bills to meet your deductible, your health insurance company will begin paying for in-network care, but that doesn’t mean they will pay 100 percent of the costs. In many cases you will be responsible for coinsurance, which is a percentage of costs in excess of your deductible that you are responsible for. If you have 80/20 coinsurance, your health insurance company will pay 80% of your medical bills after you have reached your deductible, and you are responsible for the remaining 20% of costs.

If you have a health insurance plan with a Health Savings Account, there usually are no coinsurance.

Pharmacy Benefits: If you take prescription drugs, review what your health insurance plan will cover. Every plan is different. Some plans have a combined medical and pharmacy benefit deductible, while many others have a separate deductible for prescription drugs. If the majority of your medical expenses are due to prescription drugs, get the lowest prescription drug deductible possible.

Subsidy: Many Americans qualify for cost assistance from the federal government when they apply for a health insurance plan. The subsidies — also know as Premium Tax Credits — are based on your income. Depending on your family size, you could earn more than $100,000 a year and be eligible for some amount of subsidies. Even if you don’t believe you are eligible for a tax subsidy on your health insurance, run a quote and see if you qualify for any savings. And, remember, there are two kinds of subsidies: One that lowers your monthly cost, and the other that reduces the size of your deductible.

Penalty: If you don’t carry health insurance for three months or more, you are subject to a tax penalty that is payable to the IRS when you file your taxes. In 2017 anyone who is not exempt from this provision will have to pay $695 per adult per household and $347.50 per child or 2.5% of total household income, whichever is greater.  2018’s penalty situation is a bit more unclear. There are many exceptions to this rule, however about six million people pay a tax penalty each year for not having health insurance.

The good news about purchasing health insurance is that you are not stuck with the same insurer for a long period of time. During the 2018 Open Enrollment Period, you can switch to any insurance company. The rest of the time, if you have a qualifying life event such as a permanent move to a new state or having baby, you can change the type of health insurance coverage you have. It takes patience and time to enroll in health insurance coverage each year, but it gives you the control to pivot to a new plan if your lifestyle demands a change. It pays to shop around. And remember, no one can be denied coverage because of a pre-existing medical condition.

Why Cheap Health Insurance Isn’t Better Insurance

Purchasing the ideal healthcare plan for you and your family comes down to not only calculating your monthly budget, but being able to realistically look at your projected medical needs for the next year. For individuals that are eligible for cost assistance on their health plan in the form of a tax subsidy, getting coverage for a low monthly rate can be attractive. However, simply looking at the monthly cost alone doesn’t mean you will have the right coverage for your medical needs.

Here is how you can shop smart and get the best health insurance coverage for you and your family:

Understand Metal Plans

You might be familiar with HMO or PPO health insurance plans, but the plan types under the Affordable Care Act are best known by the color of their metal level: Bronze, Silver, Gold or Platinum (Catastrophic is also a metal level, but it is only for individuals under the age of 30 and is not eligible for a tax subsidy). As a rule of thumb, Bronze plans are the least expensive, but they only pay for an average of 60% of healthcare costs overall, leaving 40% of medical costs the responsibility of the consumer. The amount the health insurance company will pay increases the higher the metal level. A Platinum plan pays an average of 90% of medical costs. So, if you have a chronic medical condition, a richer metal level plan might cost more each month, but over the course of a year, might pay for a substantial amount of medical bills and reduce your out-of-pocket costs overall. It pays to do the math.

The Network is a Big Deal

After you decide which metal level is best for you, look at the network – and remember that metal plans can have different networks. For example, one Silver plan might have a network for an urban region of a city only, while another Silver plan could have coverage for nearly the entire state. Again – you have choice. If you have settled on a specific metal level, decide if you are okay with a narrow network or need a wider network to get all of your doctors covered.

Shop on All Marketplaces

The biggest myth today is that you can only buy from your state exchange or the federal marketplace. Not true. There are website entities like HealthCare.org and others who offer the same plans the federal marketplaces do, and offer health insurance plans that can’t be found on the federal marketplace. To qualify for cost assistance in the form of a tax subsidy, you need to buy a federal plan, but most web entities identify if a plan is on- or off-exchange. If you do not qualify for a subsidy because your income it too high, there might be plans better suited to your medical lifestyle on the private marketplace (which means, they are not available on the federal marketplace). These plans are still qualified Obamacare plans. They just don’t offer a subsidy, which is why they are not featured on state or federal websites.

Understand What Deductible Level You Can Afford

Deductibles are rising every year, and individuals who buy their own health insurance will have to pay thousands out of their own pocket before the health insurance company is responsible. This is a fact of life in the healthcare space. While there are ways to avoid medical debt when your insurance deductible is high, it’s critical to gage whether you can afford to pay for medical costs until your health insurance deductible is met.

Coinsurance Comes After Deductible

Another calculation to put in your final overall tally is coinsurance. Once you meet your insurance deductible, you will most likely still be responsible for a percentage of your medical costs. For example, if you have met your $2,000 deductible and have a $200 doctor office visit, your insurance company will most likely not pay the entire amount. Typically insurance plans have a coinsurance rule of 80/20 or 70/30. If you have 80/20 coinsurance, then you have to pay 20% of the $200 doctor bill ($40 dollars). It’s another equation to place in your yearly medical budget.

Out-of-Pocket Maximum

The good news? You have an out-of-pocket maximum built into your health insurance plan. The out-of-pocket maximum amount is the most you will have to pay for medical expenses in during the course of the plan year. That means, once you have met your deductible and paid coinsurance up to the out-of-pocket amount, your health insurance company will begin paying 100% of in-network medical expenses.

How to Pay Less for Healthcare Before You Meet Your Deductible

Study after study has revealed that one of the top concerns Americans have is paying for healthcare. And for good reason. While wages have risen a modest 10% since 2010, healthcare deductibles have risen 67% in the same time period for American workers.

Instead of skipping treatment because the first $2,000, $4,000 or $10,000 of the expense would be completely out of pocket until your deductible is met, there are ways to shop smart for healthcare and save a few extra dollars along the way.  

Telemedicine

Telemedicine is not a new practice, but has gained popularity as technology has become easier and faster, delivering a doctor or nurse over the phone or through video chat for immediate consultation. The average urgent care visit is $250, and takes hours away from home when the patient could be resting. Telemedicine visits are typically $40-$50, and can treat nearly all urgent care needs, and prescribe medications.

Health Savings Account

With certain qualifying high deductible health insurance plans, health savings accounts can be an added benefit to put away money for future healthcare expenses. Typically health savings accounts are available through your employer, but if they don’t participate in a program or you purchase health insurance on your own, you can open one up at your local bank. Health savings accounts allow you to save pre-tax money from your payroll deduction or direct deposit, and you are never taxed for withdrawing money.

Shop Pricing in Advance of Care

Medical costs can be an anomaly. It’s a given that a doctor office visit at the Cleveland Clinic is going to cost more than a doctor office visit in Boise, Idaho. But remarkably, costs can vary in the same city from provider to provider for the exact same procedure, and cost hundreds of dollars more than someone else with an office just 10 miles away. Healthcare Blue Book can provide estimated “fair value” costs in advance of care so you know if your doctor or medical facility is in line with the average cost in your area, and change to a most cost appropriate doctor or facility if need be.

Stay In-Network

Health insurance plans traditionally have networks of providers for you to choose from, resulting in an “in-network” visit, which is less money than an out-of-network visit where predetermined pricing hasn’t been negotiated. Some plans have wider networks than others. For example, some healthcare plans have smaller networks of just local doctors in your region, and other plans have state-wide networks. It’s important to make sure any health insurance plan you are analyzing has your doctor in-network before purchasing a plan.

Negotiate Your Bills

The “total amount due” on your medical invoice isn’t necessarily the final price. Many times a provider will negotiate your medical bill if you contact them immediately and state that you cannot pay the full amount, but want to work out terms with them. It is far more advantageous for medical providers to collect some money in stages than send a bill to collections. Some providers will even give an automatic 10% discount on any new service if the total is paid in full within 30 days. Always check with your provider to see what you can negotiate.

Shop For a New Health Insurance Plan

Each year, whether you are an employee or buy health insurance on your own, you have the option to purchase a new health insurance plan during the open enrollment period. Typically, employees don’t have as many options as self-insured individuals, but both groups can shop for new plans each year. During open enrollment, look at the amount of healthcare you need and determine if a high deductible plan might work for your few medical needs, or upgrade to a richer plan that will cover more medical expenses, keeping more dollars in your own pocket.

Buy Supplemental Health Insurance

Do you have a high deductible health insurance plan, but can’t afford to pay several thousand dollars out of pocket if an unexpected accident or critical illness arises? Supplemental health insurance can cover the gap between paying your first medical bill, up to meeting your deductible amount. For illustration, imagine that you are in a car accident and suffer a broken wrist. After the ER visit, seeing a doctor, X-ray and setting the broken bone, the final bill can be between $1,147-$6,065, depending on your location. If you have a $6,000 insurance deductible, nearly all of the expense is your responsibility. But with a supplemental health insurance plan, you would receive cash to pay for your injury, and be able to pay off your medical debt immediately.

High deductible health insurance plans are not always ideal for individuals with limited income or high medical bills, so it pays to look for alternative ways to save money on your healthcare.

Why Health Insurance is Important

Getting hurt or sick isn’t something a person wants to happen, but unexpected medical events do occur. Having a health insurance plan helps pay for some of those unexpected costs, and provides financial protection against ongoing large medical bills. Here are some of the advantages of health insurance:

  1. With the passing of the Affordable Care Act, or Obamacare, there is no longer a limit on how much your health insurance will pay.  Before Obamacare was law, health insurance policies had a lifetime maximum of $1 million, $2 million, or sometimes $5 million dollars. Someone with ongoing cancer surgeries and treatment could hit that $1 million mark easily, and then be left without health insurance unless they enrolled in an expensive, high risk insurance program. Today those barriers are gone, and individuals who need health insurance to treat chronic illnesses are able to get the care they need without worrying about hitting a maximum amount on their healthcare plan.
  2. Health insurance companies can no longer cancel an individual’s health policy because they have a chronic disease, or discriminate against individuals with a critical condition and charge them more for health insurance. There is equality for all under the Affordable Care Act.
  3. Anyone with a pre-existing condition can still buy health insurance, and should buy health insurance, to help combat conditions that need extra medical care, and provide some financial backing to help pay for doctor and hospital visits.
  4. Insurance companies offer network services that cost far less that out-of-network physicians and hospitals, making healthcare more affordable for policyholders.
  5. Preventive services are now covered for free under the Affordable Care Act mandate. This is especially helpful for screenings, vaccines and checkups, and you don’t have to meet your deductible in order to get these services at no cost.
  6. Cost assistance is available to help lower the monthly expense of health insurance. Know as a tax credit or tax subsidy, federal money helps those that make between 100%-400% of the Federal Poverty Level. (For an individual that is between $11,770 – $47,080, depending on the state.) With cost assistance, individuals paid an average of less than $100 a month for a plan on the marketplace in 2015. That is a $268 savings each month.
  7. If you carry a qualified health insurance plan, you won’t have to pay a penalty for not having health insurance. In 2016 the fine for failing to have health insurance is $695 per person in the household, $347.50 per child, or 2.5% of your total household income, whichever is greater.

There are many great advantages of health insurance insurance, and money-saving opportunities to get covered.  

Qualifying Life Events That Allow You to Buy Health Insurance

News Flash: The health insurance landscape has changed.

Individuals who once could buy health insurance whenever they wanted are now forced to act like traditional company employees, and only enroll in a health insurance plan during an annual open enrollment period. However, life can throw curve balls, and leave an individual without health insurance outside of the open enrollment period. Then what?

The structure of the Affordable Care Act doesn’t leave these individuals without coverage. Anyone with qualifying life events can enroll in a healthcare plan outside of the open enrollment period. This special life circumstances include:

  • Losing your employer insurance coverage
  • Having COBRA coverage expire
  • Getting married
  • Getting divorced
  • Having a baby (or adopting a child)
  • Moving to a new ZIP code
  • Turing 26 and losing coverage through a parent’s plan
  • Gaining U.S. citizenship
  • Leaving incarceration
  • Losing Medicaid or CHIP status
  • Being discharged from the Armed Forces
  • Gaining status as a member of a Native American tribe or Alaskan native

It is critical to know that you must enroll in an individual plan within 60 days of losing coverage. If you fail to meet the deadline, you will not be allowed to purchase health insurance and could suffer paying a fine for failing to comply with the Affordable Care Act mandate that states all Americans must have health insurance coverage for a minimum of nine months of the year. The fine would be paid along with any federal taxes you might owe. If you typically receive a refund, the total amount of the fine will be withheld from your refund dollars.

For illustrative purposes, let’s look at a family of four, with two adults and two children. The mother decides to leave her job and move the family back to her home state so she can assist her parents in their senior years. The mother carried health insurance coverage for the entire family through her employer. When she leaves her job, she decides to sign up for COBRA coverage so no one is left uninsured. However, COBRA coverage is expensive and is immediately a strain on family savings as they look for new jobs and try to buy a home. In this instance, the family of four is eligible to apply for health insurance for two reasons:

  1. They have lost health insurance coverage
  2. They are moving to a new ZIP code

Anytime you have a major life event and find yourself without health insurance, remember to investigate health insurance through your state exchange, the federal marketplace, or through a website entity like HealthCare.org to get covered.

Health Insurance Facts: Tax Subsidy and Tax Penalty

The Affordable Care Act ushered in a new level of benefits and complexity for individuals and families that purchase their own health insurance. On the positive side, anyone who falls between 100%-400% of the Federal Poverty Level (a family of four that makes between roughly $23,000 and $95,000 on average, depending on their state of residence), is most likely eligible to receive a tax subsidy on their health insurance premium. The subsidy provides cost assistance to lower the overall cost of health insurance each month. The IRS requires the completion of an additional tax form if a subsidy is granted (form 1095-A helps you complete the required 8962), but the extra paperwork can be well worth the time to save money on a healthcare plan. The average marketplace enrollee with an Obamacare plan paid an average of less than $100 for health insurance in 2015. It totaled an average of $268 savings each month.

The flip side for not carrying a health insurance plan is a tax penalty, payable when taxes are filed. When the Affordable Care Act was initially launched, the penalty was designed on an ascending scale, small to start the first year, with incremental increases each following year. In 2016 the tax penalty for not having health insurance on a per household basis is $695 per person, $347.50 per children, or, 2.5% of overall income, whichever is greater.

To qualify for a tax subsidy and receive cost assistance on your health insurance plan, the IRS requires the following:

  • You must be in the 100%-400% percentile of the Federal Poverty Level to qualify for a tax subsidy (if you make less than 138% of the Federal Poverty Level and your state expanded its Medicaid program, you could be eligible for Medicaid assistance instead).
  • You must file a joint tax return. (There are certain exemptions for those who have suffered domestic abuse or spousal abandonment. If you believe you might qualify, ask your tax professional.)
  • You cannot be claimed as a dependent of another individual.
  • You are not eligible for health insurance through an employer.
  • You are not eligible for any other government program, like TRICARE.
  • You must be up-to-date with your IRS tax filings.

It is vital that you contact your state exchange or the federal marketplace during the year if you have a life situation that changes your household size or income status. If you receive a pay raise but fail to tell the marketplace your total household income has changed, you could owe the IRS money at tax time. If you have a baby or adopt a child, your household size increases, and you might be eligible for additional subsidy dollars to lower your health insurance cost. Communication with the marketplace over these types of life changes will reduce financial consequences.

What is The Affordable Care Act?

The Affordable Care Act, also commonly referred to as “Obamacare,” is healthcare reform legislation that was signed into law by President Barak Obama in 2010. The law has many provisions that have been and continue to roll out in phases, some of which will not go into effect until 2022.

With the passing of Obamacare, nearly all Americans are now required to carry health insurance, and large employers must also offer their employees access to group health insurance plans. Failing to do so on either account results in a tax penalty, payable when filing income taxes. In addition to these mandates, states have been encouraged to expand Medicaid, and every individual who purchases their own health insurance has access to a state exchange or the federal marketplace to shop for insurance and receive a cost subsidy to lower the monthly premium amount on their healthcare plan.

What are the benefits of the Affordable Care Act? There are many. Individuals with a pre-existing condition can no longer be denied health insurance, and are eligible for health insurance at the same rate as a healthy individual. Gender discrimination was also struck down with the mandate, allowing men and woman to pay the same rate each month. One of the biggest victories for Obamacare advocates was gaining essential health benefits. Every health insurance company selling healthcare plans on a state exchange or the federal marketplace must include 10 essential health benefits in every plan for it to be considered a qualified Obamacare healthcare policy. The benefits include (although some specific services do vary by state):

  1. Outpatient care
  2. Trips to the emergency room
  3. Treatment in the hospital for inpatient care (an overnight stay)
  4. Pregnancy care before and after the baby is born
  5. Mental health and substance abuse services
  6. Prescription drug coverage
  7. Services and devices that help you recover from a debilitating injury or disability
  8. Lab tests
  9. Preventive services
  10. Pediatric services, which includes dental and vision care for children.

One of the essential health benefits, preventive services, are free of charge, upholding President Obama’s campaign promise of “healthcare for all.” Today preventive services include:

  • One-time screening for abdominal aortic aneurysm in men of specified ages who have ever smoked
  • Alcohol abuse screening and counseling
  • Aspirin use to prevent cardiovascular disease for men and women of certain ages
  • Blood pressure screening for all adults
  • Cholesterol screening for adults of certain ages or at higher risk
  • Colorectal cancer screening for adults over 50
  • Depression screening for adults
  • Diabetes (Type 2) screening for adults with high blood pressure
  • Diet counseling for adults at higher risk for chronic disease
  • HIV screening for everyone ages 15 to 65, and other ages at increased risk
  • Immunization vaccines for adults–doses, recommended ages, and recommended populations vary:
    • Hepatitis A
    • Hepatitis B
    • Herpes Zoster (Shingles)
    • Human Papillomavirus
    • Influenza (Flu Shot)
    • Measles, Mumps, Rubella
    • Meningococcal
    • Pneumococcal
    • Tetanus, Diphtheria, Pertussis
    • Varicella
  • Obesity screening and counseling for all adults
  • Sexually transmitted infection (STI) prevention counseling for adults at higher risk
  • Syphilis screening for all adults at higher risk
  • Tobacco use screening for all adults and cessation interventions for tobacco users

There are many rules and regulations when it comes to the Affordable Care Act, but here are some of the most important things to know about the law:

  1. Obamacare is not a government program. Health insurance is sold by private insurance companies to Americans through a state exchange, the federal marketplace or through website entities like HealthCare.com. The Affordable Care Act is the regulation that health insurance companies must abide by.
  1. Young adults can stay on their parent’s health insurance plan until they are 26 years old, whether they are single or married.
  1. The time to purchase health insurance or change plans is during the open enrollment period. This typically runs for several months at the end of each year. If enrollment is missed, certain life situations such as moving to a new ZIP code, getting married or divorced, having a baby or losing employer coverage allow individuals to enroll outside of the open enrollment period.

4. Tax credits in the form of a cost subsidy help Americans lower the cost of their health insurance if their household income falls beneath 400% of the Federal Poverty Level. A family of four that makes between roughly $23,000 and $95,000 is usually eligible for a tax credit to reduce the cost of their health insurance.

  1. Individuals can only go up to a maximum of three months without health insurance to skip paying a penalty for not having coverage. Other exemptions do allow individuals to avoid paying the penalty at all. In 2016, those who do not carry health insurance and are not exempt from pay a penalty will owe $695 per adult person or 2.5% of their income, whichever is greater.

 

 

 

Test Your Healthcare IQ

Think you know health insurance inside and out? We asked our insurance industry experts what questions they are most frequently asked, and what information is lesser known, but vital to making an informed health plan purchase. Answer the questions and find out how advanced your health plan IQ really is.

Questions

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A. What is the official name of the health care mandate that was passed into law, and is currently referred to as “Obamacare?”

B. How many deductibles are included in a health insurance plan?

C. When is the open enrollment period for signing up for health insurance for 2018?

D. If you purchase health insurance on your own because you’re self-employed or don’t have access to coverage through your employer, does the government subsidize the cost of the plan?

Answers

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A. The Patient Protection Affordable Care Act is the name of the health insurance mandate, which was passed and signed into law in 2010. The name of the mandate has been shortened over the years to “Affordable Care Act” in mainstream media.

B. It depends. Many health insurance policies have two deductibles – one for medical expenses and one for prescription drug expenses. However, some policies only have one deductible that combine both medical and prescription costs. It pays to investigate is you have one or two deductibles, especially if you use your prescription benefits frequently.

C. The health insurance open enrollment period begins November 1, 2017, and runs through December 15, 2017. In order to have coverage on January 1, 2018, you must either renew the plan you have or select and enroll in a new plan by December 15, 2017.

D. In many cases, yes. More than 85% of Americans who purchase health insurance through their state exchange or the federal marketplace receive cost assistance to help with their monthly health insurance premium.

Top Three Insurance Terms

Shopping for health insurance can be confusing as soon as large words not part of the average English vocabulary become part of the conversation. You have to know what the words mean in order to understand what you’re getting with your health insurance coverage. So here are three insurance terms you can master to become a more informed healthcare purchaser.

Deductible: This is a fixed dollar amount the health insurance company will require you to pay before they begin paying for your medical bills. For example, if you have a $5,000 deductible, you will have to pay $5,000 out of your own pocket for medical services (outside of covered preventive care) before your health insurance company will begin taking responsibility for a majority of the expenses.

Coinsurance: Once you meet your health insurance deductible, you typically are still required to pay a percentage of medical costs going forward. Typical coinsurance can be 80/20 or 70/30 (meaning that the insurance company pays for 80% or 70% of the expenses, and you pay the remainder). That means, if you have met your deductible and have a $200 medical bill, you are responsible for $40 of the bill if you have 80/20 coinsurance.

Out-of-Pocket Maximum: There is a cap on how much you have to pay for in-network services over the course of a year to help curb extreme medical expenditures. Always look to see what the maximum amount you would be responsible for if major medical services were required.

Knowing these three definitions can save you time, headache and money along the way.