Are You Covered?

Will you have health insurance next year?  With Open Enrollment beginning in November, now is a good time to start thinking about your healthcare needs and what Open Enrollment means for you.

For some, the Affordable Care Act provides an opportunity to secure healthcare coverage that was previously out-of-reach.  For others, the individual mandate – you must have coverage or pay a penalty – may seem daunting.  Whatever your situation, if you don’t have coverage for 2015, you’ll need to report it on your tax return and pay a penalty.[1] 

When to Enroll

For those seeking coverage in 2015, Open Enrollment for health insurance runs from November 15, 2014 to February 15, 2015.  During Open Enrollment you can purchase a new individual health insurance policy, renew your current health insurance, or switch policies for one that better fits your needs.  If you don’t purchase coverage during Open Enrollment, you generally can’t buy health insurance until the next Open Enrollment period for coverage the following year unless you experience a Qualifying Life Event and become eligible for a Special Enrollment Period.

Qualifying Life Events include marriage or divorce, birth or adoption of a child, gaining citizenship, changing residences, changing dependent status after turning 26, returning from active military duty, or losing insurance.  If you qualify, your Special Enrollment period ends 60 days after the qualifying event that triggered it.  You might meet the requirements for a Special Enrollment period if you tried to enroll during Open Enrollment but couldn’t for technical reasons or extenuating circumstances.  If you are eligible for the following government-sponsored programs, enrollment is available at any time of year:

• Tricare (for active and retired military)
• Medicaid and the Children’s Health Insurance Program
• Indian Health Service/tribal program

Finding Insurance

If you don’t have insurance from your employer or a government-sponsored health program such as Medicare or Medicaid, you can buy private insurance through an online marketplace,

regardless of your health or pre-existing medical conditions.  Even if you have access to employer-based coverage through your spouse, it might be cheaper to purchase your own policy.

Government subsidies are available to lower your premiums if you qualify.  You can check online to determine if you are eligible for federal subsidies or reduced premiums based on your income and household size.  However, you generally won’t qualify if you have access to employer-sponsored coverage, or your estimated 2014 income is above $45,960 for an individual, or $94,200 for a family of four.  If can’t enroll through your employer and you don’t qualify for a subsidy based on your income, you can purchase coverage (a) directly from an insurance company, with the help of an insurance agent or broker, (b) through the public Health Insurance Marketplace, or (c) through a Private Exchange.

When Does Coverage Begin?

During Open Enrollment, if you enroll between the 1^st and 15^th days of the month, your coverage starts on the 1^st day of the following month.  If you purchase between the 16^th and the last day of the month, your coverage can begin on the first day of the second month that follows.  So if you purchase coverage January 10, your coverage starts on February 1, but if you purchase on January 21your coverage starts on March 1.

What Health Insurance Plans Are Available?

As of 2014, individual health plans are categorized into four standardized levels of coverage: Platinum, Gold, Silver, and Bronze.[2]  All plans provide the same minimum essential health benefits, cover pre-existing conditions, and provide free preventive services.  Some plans may offer additional coverage, but no plans in the marketplace can offer less.   The most significant difference among the plans is how you and the plan share the costs of your care.   

• Platinum –Plan pays 90%, you pay 10%
• Gold – Plan pays 80%, you pay 20%
• Silver – Plan pays 70%, you pay 30%
• Bronze – Plan pays 60, you pay 40%
• Catastrophic – Plan pays <60%

Based on average actuarial percentages.

 

 Selecting a Plan

When comparing plans, you’ll need to consider your health and your financial situation.  Finding a balance between coverage and costs can be challenging.  Here are some things to consider:

Do you expect a lot of doctor visits or require regular treatments?  You may be better off with a Platinum or Gold plan that pays for a greater percentage of your care.  However, if you are generally healthy and don’t anticipate many healthcare bills, a Silver or Bronze plan may be a better choice.  It will pay a lower percentage of your costs when you require care, but the premium will cost you less per month.  Unfortunately, even healthy people can have accidents or become ill, so you’ll have to factor in your risk tolerance as well.

What is the lowest cost for your healthcare needs?  The plan with the lowest premium may not provide the best value.  When comparing plans, out-of-pocket costs are just as important as premiums.  Your costs – like copays and coinsurance – can add up.  Deductibles for some plans can amount to thousands of dollars a year.  Plans with similar benefits may have varying out-of-pocket costs. 

Finding the right cost-sharing at the right price

	Platinum	Gold	Silver	Bronze
Monthly premiums	$$$$	$$$	$$	$
Out-of-pocket costs	$	$$	$$$	$$$$
Best option if you…	Require a lot of medical services or prescriptions	Want to save on your monthly premium while keeping out-of-pocket costs in check	Need to balance your monthly cost with your out-of-pocket expenses	Don’t plan on using a lot of medical services or prescriptions

 

What did you spend last year?  Don’t stick with a health insurance plan out of habit.  If you spent more in out-of-pocket medical costs than you had anticipated, you may wish to switch to a policy with more comprehensive coverage.  But if you didn’t go to the doctor very often, don’t require many prescriptions, and you have some savings, consider a plan with lower premiums.  While the deductibles will likely be higher, even if you visit your primary provider several times, it will probably still be cheaper. 

Which type of Provider Network is right for you?  HMOs match you with a primary care provider who is responsible for any referrals you need.  EPOs often don’t require referrals, but do require that you choose providers from within a set network.  PPOs offer more options by covering out-of-network care.  A POS (a mix of an HMO and a PPO) provides access to a variety of doctors, but generally requires a referral to see any kind of specialist.  POS plans are typically more expensive, but also provide the most flexibility.

Doctor and hospital networks vary widely among companies and also geographically.  If you aren’t attached to a particular doctor, an HMO plan could save you money. However, having more choice of providers can be valuable for some families, especially if you live in a rural area with limited access to healthcare providers. 

Are you staying healthy?   You may feel comfortable with a less expensive plan if you practice good health habits.  According to a study in the New England Journal of Medicine, preventable illnesses account for 70% of health care costs.  The fewer unhealthy behaviors you have, the less frequently you’ll need to visit the doctor, and the less you will spend.  The Centers for Disease Control and Prevention estimates that it costs 18% more for an insurance company to provide coverage for a smoker than a non-smoker.

It’s Time to Get Serious

So where do you go from here?

• Visit our Alumni Insurance Program’s website to gain access to our Private Health Insurance Exchange:   http://meyerandassoc.com/lu

Private Exchanges are similar to, but separate from, public Marketplaces.  Private Exchanges like the one offered by the Alumni Insurance Program allow you to:

1. secure subsidies (if you qualify),
2. purchase qualified public exchange plans , and
3. purchase other “off exchange” plans offered by multiple carriers.  

 

• Call 888-404-3121 to speak with an expert who can explain your options and help you crunch the numbers.