If you found yourself in a situation that required you to find a health insurance plan on your own, would you be able to? Do you know what to look for when selecting a policy and how to ensure affordability?
You aren’t alone. Most of us don’t know what to look for when searching for an affordable health insurance plan. One common misconception that people have is that current health, medical history, or gender affect the amount they will pay for a premium. That is not true. An insurance company cannot base a premium on those factors.
With so many different types of health insurance plans on the market, how are you supposed to narrow your search down to the right one?
Where To Start Your Search
When you first begin your search for an affordable health care plan, you may become overwhelmed with all the options available for coverage. There are several different places you can look, but if you go to the “Finding Health Insurance” page from usa.gov, you will find the different options that may give you an idea of the coverage you need.
Through the government website, you can learn about The Affordable Care Act (ACA), health insurance plans, and the Continuation of Health Coverage (COBRA).
The Affordable Care Act (ACA)
The Affordable Care Act (ACA) or commonly known as ObamaCare, was designed to give individuals access to affordable healthcare options. Insurers are no longer allowed to deny coverages based on pre-existing conditions or gender. The annual and lifetime coverage limits were also eliminated.
During open enrollment periods, you can go to HealthCare.gov to look at plans you are eligible for on the Marketplace and compare them. Insurance plans are available for individuals and families. To be eligible to enroll for health coverage through the Marketplace, you must live in the United States, be a U.S. citizen or national (you can check eligible immigration statuses), and cannot be incarcerated.
Health Insurance Plans
When you purchase a health insurance plan, it will typically fall into three categories – traditional fee-for-service, health maintenance organizations (HMOs), and preferred provider organizations (PPOs).
- Traditional fee-for-service – These health insurance plans are usually the more expensive choice but offer the most flexibility when choosing a healthcare provider.
- HMOs – An HMO offers a lower copayment and covers more preventative care, but choices on healthcare providers are limited to those who are a part of the HMO plan.
- PPOs – A PPO offers a low copayment but allows more flexibility when choosing your healthcare provider.
How Insurance Premiums Are Set
Under the laws regarding health care, insurance companies are only allowed to account for five factors when setting your premium.
These factors are:
- Age – the premium of an older person can be up to three times higher than that of a younger one.
- Location – Your location has a significant impact on your premium. There are differences in competition, state and local rules, and the cost of living in the area.
- Tobacco use – If you are a subscriber who smokes, insurers can charge up to 50% more for premiums than those who do not use tobacco.
- Individual or family enrollment – Insurers can charge more for policies that will cover a spouse and dependents.
- Plan category – these categories are bronze, silver, gold, platinum, and catastrophic. These are also known as “metal categories.”
When choosing the plan category, on the scale of bronze to platinum, bronze will have the lowest premium with the highest out of pocket expenses. Platinum will be the highest premium with the lowest out of pocket expenses.
Catastrophic plans are for those people under 30 or those people of any age with a hardship exemption or affordability exemption. Premiums are usually low, but the deductibles are incredibly high.
The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers and families the ability to continue group health coverage for limited periods. The basic requirements for COBRA are having a group health plan covered by COBRA, a qualifying event must have occurred, and you must be a qualified beneficiary for that event.
If you are entitled to COBRA coverage, you must be given at least 60 days to choose if you are going to elect the continuation of group health coverage. COBRA plans are more expensive because your employer would no longer be covering their part of the premium.
Looking Beyond The Premium
When you are looking for an affordable health insurance plan, you have to look beyond the premium and examine the deductible and out of pocket expenses. When comparing your monthly premium and your budget amount for insurance, that isn’t the only factor to consider when looking for affordability.
- Deductible – A deductible is an amount you have to spend on covered health expenses before the insurance company pays anything. The deductible excludes free, covered preventative services.
- Copayments and coinsurance – These are payments made by you each time you receive medical services after your deductible has been met.
- Out-of-pocket maximum – The out-of-pocket maximum is the maximum amount you will have to pay for covered services during the year. After you reach this amount, your insurance covers these services 100%.
Estimated Yearly Costs
To pick a plan that is not only affordable but also beneficial, you need to assess your regular medical needs. It is impossible to accurately predict the amount of medical services you will need in the upcoming year. The best thing you can do is think about the amount of care you may require, for you or your family.
Although the actual payment amount will vary, you can use the estimation tool on HealthCare.gov to decide what plans may be best for you and your budget. When you preview plans, you can choose the frequency of each member’s medical usage – low, medium, or high.
Once you choose the medical usage, you will be able to see what your associated costs with the plan is. You will see the monthly premium amount, deductible, and possible out-of-pocket expenses you may be required to cover. Even though actual dollar amounts will vary, the estimate can give you an idea of the impact the health insurance will have on your family’s budget.
Look For Affordable and Beneficial
The best way to find the most affordable health insurance plans is to compare the ones available to you through the Marketplace. Make sure to look at the premium, yearly estimated costs, and the amount of health care coverage you expect to need. If you are uncertain about the amount of coverage and the type of coverage you need, reach out to an assister in your area who can help you understand the different types. As always, it is better to be prepared than not to have any coverage.