Purchasing health insurance can seem like a daunting task for anyone, but it doesn’t have to be. Thanks to the internet, it’s easier than ever to research, personalize, and buy your own health insurance. Below are outlined the most important points to understand about buying your own health coverage to help walk you through everything you need in order to get started.
Insurance Exchanges and Independent Brokers
What is an insurance exchange? Essentially, health insurance marketplaces, or exchanges, are the avenues through which you will buy your health coverage if you aren’t purchasing a policy through your employer. Instead of going to each individual insurer to obtain coverage, you will go to the website of an exchange where you can review information for multiple insurers at once. You can also use an independent broker to purchase your policy, although they are becoming increasingly difficult to find with the implementation of healthcare marketplaces.
The two main types of healthcare marketplaces are public exchanges and private exchanges. While both are available to the public at large as well as employers, only public exchanges offer tax credits and subsidies in accordance with the Affordable Care Act. Since the ACA requires each state to offer an exchange to its’ residents, there are multiple public exchanges available. Some are run by individual states, others are run by the federal government, and a few are the product of partnerships between the federal government and the state.
In contrast to public exchanges, private healthcare marketplaces are not run by the government at all, but rather by a company in the private sector such as a consulting firm. Most notably, private exchanges do not offer tax credits or subsidies to individuals who purchase their health insurance there. The greatest benefit of the private exchange seems to be their offer to employers. In the private marketplace, employers can give a health insurance allowance to their employees who can then shop for their own plan in the private exchange based on options chosen by their employer.
Metal Categories and Out of Pocket Costs
To simplify shopping for customers new to the health insurance marketplace, public exchanges have put into place several different categories for their available plans. Customers will have four or more options which will typically include Bronze, Silver, Gold, and Platinum. It should be noted that the plan names refer to price and out of pocket costs rather than level of coverage.
This is typically the most basic plan with the lowest premium (some carriers will offer a “catastrophic plan” which is lower than the Bronze level). On average, the Bronze plan will cover 60% of your medical costs and you will be responsible for the remaining 40%. Your monthly payments will be lower than the other levels but if you have any major medical needs over the course of the year, you’ll be responsible for almost half of the bill. For people who are in good overall health and have significant savings, this may be a good choice.
The silver plan is an average plan. Premiums could be lower if you went with the Bronze, but won’t be as high as the Gold or Platinum Levels. Usually 70% will be paid out on the Silver plan, leaving customers with just 30% out of pocket costs. This is a good option for people in great to okay overall health who may or may not have savings.
Premiums for Gold Plans will be higher than the two aforementioned levels but again, the plan pays more towards medical costs. In this instance, the Gold plan pays 80% of health insurance costs leaving the policyholder with just 20% to pay out of pocket. If you can afford the monthly premiums, this is a great option for people who may not be in great health or know that they will have significant medical needs over the course of the year.
This is as good as it gets as far as payouts go. While the Platinum level premiums are higher than any other plan, it makes up for the monthly cost since this plan pays up to 90% of your health insurance costs. For individuals not in great health, this is the best option if you’re able to afford the monthly premium.
If you are interested in learning more about selecting the right metal category, the National Health Council provides more information.
All healthcare providers will be classified as either in or out-of-network. However, some plans will only permit coverage by in-network providers. Before selecting a healthcare plan, it may be advisable to make sure that all or most of the doctors you currently use are in your network. Some of the different types of plans include:
- Preferred Provider Organizations (PPOs) give you the option of using either type of provider, although you will pay less if you use in-network providers.
- Point-of-Service (POS) Plans will also let you use providers from either type of network. The difference with a POS plan is the prerequisite that comes with using off-network providers. Before you can go to a doctor or facility off network, you will need to get a referral from your primary care physician and be prepared to pay more out of pocket. PPOs don’t require referrals.
- Health Maintenance Organizations (HMOs) may allow you to use an out-of-network provider in the event of an emergency but will otherwise generally require you to see providers who work with the HMO. Under an HMO plan, you will most likely be required to get a referral before you can see a specialist.
- Exclusive Provider Organizations (EPOs) will only cover visits to providers in the network unless there is an emergency.
Choosing a Doctor
Are you looking for a new physician in addition to your new health insurance? Be sure to note whether or not your new doctor is in the network for the plan you’re currently considering. When choosing a plan, you will find a list of in-network providers and facilities that are covered. While there may be some exceptions, any doctor, clinic, or hospital not listed in your network will be considered out-of-network and could be subject to higher out of pocket costs.
Sometimes, it may be necessary to travel out of your area in order to be seen by an in-network doctor or specialist. If travel is difficult for you, it would be beneficial to choose a plan with a network that is local to you. Conversely, if you have a doctor, specialist, or medical facility that you use frequently, it’s best to check and make sure this provider is in-network before you buy a new plan.
So, you may be wondering what all a typical health plan covers. The covered features of your plan are called benefits and should include at least all of the following:
- Prescription drugs, although co-pays will vary by plan
- Lab tests
- Emergency room trips
- Pediatric services including dental and vision care for children
- Inpatient care while hospitalized
- Outpatient care that is administered without being admitted to a healthcare facility
- Pre-natal and post-natal care when you have a baby
- Preventative services such as vaccines, screenings, and counseling
- Services for mental health and substance use disorders including psychotherapy and other behavioral health treatment.
- Devices and services necessary for recovery from a chronic condition, disability, or injury. Covered services may include occupational or physical therapy, psychiatric rehabilitation, speech language pathology, etc.
As with providers, before choosing a new healthcare plan, it is advisable to review your insurer’s website to find out if your current medications are covered. Alternatively, you can call the insurer directly to see if your prescriptions will be covered when you buy your new policy.
Planning for the Future
Health insurance isn’t something you can just buy and forget about. As the health needs of your family evolve over time, changes will need to be made to your healthcare plan. Each year as enrollment comes around, you will need to assess the needs of your family members as well as your own to determine if changes to your plan can or should be made. Since changes can only be made at enrollment time, it is essential that you don’t miss the opportunity as it will be another year before you have the chance to do so again.