With my 26th birthday just a few weeks away (Hey Scorpios!!) I have been forced to start contemplating what I’m going to do about healthcare coverage. Thanks to the Obama administration’s Affordable Care Act, we are all allowed to stay on a parent’s health insurance until the age of 26, after that you’re SOL and have to get on your own plan or face a penalty. Being a public health student and future doctor it was an easy decision to seek coverage, as oppose to paying the penalty, but where was I suppose to start?
I had the opportunity to attend a webinar on Obamacare and picked up a few pieces of important information that I thought would be valuable for anyone needing to get healthcare coverage. The Health Insurance Marketplace, accessible at www.healthcare.gov, will be your starting place. One of the cool things about the Marketplace is it allows you to compare plans from various companies all in one place. As a first time applicant, you will want to select your state of residence. States that have chosen to expand Medicaid frequently have their own marketplace website and you will be directed to it if you select applicable state. Otherwise, you will enroll through the federal market place. It is important to note that you are NOT allowed to enroll via the market place whenever you want. To enroll in 2016 coverage, you must do so November 1st, 2015-January 31st, 2016. Fortunately, people may enroll outside of this period if they have certain life events, like getting married, having a baby, losing other coverage (i.e. turning 26), or other qualifying life events.
For me, my coverage ends at the end of November, meaning I need to get 2015 coverage (for the month of December). I knew I qualified for the special enrollment period so I was able to immediately start my application, but if you are unsure there is a quick 11-item survey that only requires your zip code to check your qualification. Back to the application, you will be prompted to create an account. The application is fast and simple, requiring barely any detailed personal information. Upon submission, you will receive your eligibility results. These results will inform you as to if you are eligible to shop plans from the marketplace, whether you are eligible for Medicaid, and if you can receive a tax credit or cost sharing reductions.
What are tax credits/cost sharing reductions?
Cost-sharing reductions are discounts that lower the amount you have to pay for deductibles, coinsurance, and copayments (don’t worry we will cover those shortly). You qualify for this reduction if your income is below a certain level and you choose a plan from the Silver plan category (we will cover this too). Tax credits lower the amount you pay each month for your premium. You may apply all or part of your tax credit to reduce your monthly premium or receive the credit when you file your tax return for the year. Tax credits are also based on household size and income.
Once you know your eligibility you are ready to shop plans. There are five categories or “metal levels” of coverage in the Marketplace. Plans in each category pay different amounts of the total costs of an average person’s care.
- Catastrophic plans pay less than 60% of the total cost of care on average. Only people under the age of 30 or those who have hardship exemption may get these plans.
- Bronze plans cover 60%, you pay 40% of the total cost of an average person’s care.
- Silver plans cover 70%, you pay 30%
- Gold plans cover 80%, you pay 20%
- Platinum plans cover 90%, you pay 10%.
How should I pick a category?
If you frequently visit the doctor or need regular prescriptions, you may find that a gold or platinum plan makes the most sense. While you will pay a higher monthly premium, these plans will cover more of the costs when you do need care. If you don’t visit the doctor often outside of your annual exam, a catastrophic, bronze, or silver plan may be best for you. These plans will cost you less each month, but will cover less of the cost when you do need care. Remember, if you qualify for the cost sharing reduction, you must enroll in a silver plan to get the savings. If you’re under 30 or have a hardship exemption, a catastrophic plan will probably be your cheapest option (on a monthly basis) and will protect you from worst-case scenarios.
This seems like an appropriate time to define some terms:
- Premiums: The amount that must be paid for your health insurance plan. You will typically pay this monthly, but it may be paid quarterly or yearly as well.
- Copayments: A fixed amount that you will pay for a covered health service, when you get the service.
- Deductibles: The amount you must pay for covered health care services before your health insurance provider begins to pay. Premiums, copayments, and coinsurance cannot be applied to your deductible
- Coinsurance: Your share of the costs of a covered health care service, calculated as a percent of the allowed amount for the service
- Out-of-pocket maximum limit: This is the most you will pay during a policy period (normally one year) before your health insurance plan starts to pay 100% for covered health benefits.
Once you pick a health insurance plan, you will be prompted to select a dental plan if it was not included in your health plan. Here, there are two categories, high and low. The high coverage level has higher premiums, but lower copayments and deductibles. The low coverage level has lower premiums but higher copayments and deductibles. You will also be able to compare dental plans’ costs, copayments, deductibles, and services covered.
After you select your dental plan, all that’s left to do is pay your first month’s premium. It’s important to note that you must enroll prior to the 15th of the month before you want your coverage to start (i.e. if you want your coverage to start on November 1st, you must enroll by October 15th).
Whoo. That was a lot, but I hope it helps you all navigate the Insurance Marketplace with more confidence. While I’m no expert on health insurance, I am committed to helping people attain appropriate and adequate coverage. If you have any questions, please leave them below and I will try my best to answer them or provide you with a resource.
Disclaimer: We’ve taken every effort to ensure we accurately present information related to the US Health Insurance Marketplace (‘The Marketplace’). However, there is no guarantee that this guide has EVERYTHING you need to know to buy health insurance and we are in no way suggesting you should/must buy insurance through The Marketplace. We are not claiming the content above to be original and are crediting it to various sites on www.healthcare.gov. Nothing on our website is a promise or guarantee of savings and/or professional advice. You alone are responsible for your actions and results regarding your health insurance options. We recommend that you consult with a state sanctioned health care coverage professional.