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.
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.