(Photo Details: Last weekend, celebrating my friend's 50th birthday on the Lagoon at Stinson Beach, CA. Can anyone guess the relevance to Obamacare?)
Last week, I thought I’d be blogging about my experience shopping for health insurance on the exchange. In what I interpret as a good sign, it’s taken me one week to be able to get to the “apply” section of my state’s health insurance exchange. It looks like a lot of people are looking to get themselves insured, and I’m glad about that. Apparently I was one of over five million people shopping on the California exchange last week.
From the second day, I was able to review my choices, compare prices and coverage, and select the plan that I wanted. But until yesterday I was unable to actually submit my application. Yesterday, my application was accepted, but I haven’t been able to purchase the policy of my choice just yet. Maybe later today—I’ve still got a couple months, so I’m not worried.
Here’s what I’ve learned so far.
Should you even care?
If you have health insurance at work, no, you shouldn’t care. Don’t bother reading any further.
If you are retired and on Medicare, you shouldn’t care either. Stop reading here.
If you are retired and have retiree health insurance through your former employer, you don’t care either. Go read a good book.
If you are on Medicaid, you shouldn’t care either. Follow the instructions above.
That doesn’t leave many people who still care, I know. But for those of you that are retired or are thinking about retiring before you are eligible for Medicare, read on.
Up to now, when you retired (or otherwise found yourself without a job), I would have advised you to sign up for health insurance through COBRA. It’s an expensive option, but it was the only way to guarantee that you could get health insurance. Then, while you had the safety net of COBRA coverage, you could shop for an individual policy on your own.
Two problems existed if you went out on the open market to buy an individual policy outside of COBRA. The first was that you wouldn’t know the actual price of your policy until you went through underwriting. The second was that at the end of the lengthy underwriting process, the insurer could decide not to insure you anyway. So it was a cumbersome process, to say the least.
Now you can shop for an individual policy, compare the actual prices, and actually wind up with a policy at the end of your application process.
Do I have to buy my insurance on the exchange?
No. You don’t have to buy insurance on the exchange. In fact if you wish, you can shop and compare providers, coverage, and prices on the exchange. Then when you find coverage you like, you can go directly to that insurer and buy it through them, avoiding the exchange application process all together.
Or you can go through a broker (or on-line broker like ehealthinsurance.com) and do the same thing.
However, if you qualify for subsidies under the new law, you must buy your insurance on the exchange. On the other hand, even if you don’t qualify for a subsidy, you can still buy your insurance on the exchange, if you have the patience to wait a week or two.
I assume this is the same in all states, but all of the policies I found on the exchange are the exact same policies I found on the individual carrier websites: same policies, same prices, same provider networks.
Can I still go to my doctor?
This issue was the most important factor to us, even over price. When you shop on the exchange, you can filter results by which policies carry the network with your doctors. While there are five insurers I can choose from in my region, only one of them includes the network with our doctors.
How much will it cost?
This is the part that requires the most work. As I’m sure you’ve heard by now, new policies are grouped into categories: Bronze, Silver, Gold and Platinum. Bronze level carries the lowest premiums, but those policies are designed to cover only 60% of your total health care costs. Platinum plans are designed to cover 90% of your costs, but carry very high premiums as a result.
We don’t use much health care right now, so the Bronze level works out to be the lowest cost overall. When you consider costs, don’t just look at premium cost, but at how much out-of-pocket you expect to spend under each plan for the types of services you use, or expect to use regularly.
The carrier that covers our doctors offers an HSA-compatible plan in the Bronze level. That way, we can still take advantage of the tax deduction for funding our Health Savings Account (HSA).
While our premium will be higher with this new policy than our old one, our out-of-pocket expenses will be lower for a typical year’s health care expenses. Most of our health care is preventative in nature, which is 100% covered under the new plan. So overall, the line item for medical expenses in our budget remains unchanged, even though the breakdown is different. Basically we are pre-paying for preventive care, so maybe I won’t boycott my doctor this year after all.
You really have to sit down and run the numbers—if you have some ongoing health issues, you may save money by actually purchasing a more expensive policy. It’s all going to depend on your individual situation.
Do I qualify for a subsidy?
If your annual income falls between 138% 100%-400% (correction--the range can begin as high as 138% if your state expanded Medicaid) of the federal poverty level, you will qualify for some amount of subsidy to purchase health insurance. You can elect to offset your premium as you pay it if you qualify. If you turn out to be wrong about your income at the end of the year, you will have to true it up on your tax return and either pay back some of it if your income was higher, or get a refund if your income was lower.
You can also elect to pay the full cost of the premium each month, and then if your income turns out to be low enough to qualify at yearend, get the credit on your income tax return. But as I said earlier, you can only get the subsidy credit if you purchased your insurance directly through your state’s insurance exchange, not if you purchased through a broker or directly through the insurance company.
If your state’s exchange isn’t working properly yet, here’s a link to the Kaiser Family Foundation’s subsidy calculator to see if you qualify for a premium subsidy,
What if I make the wrong decision?
At the end of the year, if you feel like you chose the wrong plan, you can change plans at the next open enrollment period. So don’t think of this as a life-long decision. This is another advantage over the old rules. Previously, we could not change plans without going through underwriting again.
If you opt out of insurance all together, and instead decide to pay the penalty, you can opt in at open enrollment as well. But if you get cancer in May, you’ll have to pay your own way until you can get into coverage the following year. Not that I’m expecting cancer next year, but that’s not a gamble I’m willing to take.
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