Choosing health insurance coverage for you and your family is no small decision. Even though the Affordable Care Act (ACA), which is also known as Obamacare, requires that all ACA-compliant major medical insurance policies cover certain preventive services and include essential health benefits at no additional cost, there are nuances.
The following steps can help you get started with the health insurance policy selection process. Learn how to compare coverage, narrow your options and decide what policy makes sense for you and your family in the year to come.
1. Consider your healthcare needs and budget
Finding the “right” health insurance policy is usually about striking a balance between monthly premium and annual out-of-pocket spending. As you start shopping for coverage, you’ll want to ask yourself a few questions, starting with:
- What can you afford to pay as a monthly premium?
- How much can you afford to pay out-of-pocket toward your policy’s annual deductible, coinsurance and copayment amounts, as well as any healthcare not covered by your policy?
Also consider the following as they relate to a typical year:
- How often do you seek medical care?
- What is the nature of your healthcare needs (e.g., routine or maintenance care, hospitalization, surgery, emergency department visits)?
- How much do you cumulatively spend out of pocket on healthcare?
If you have a pre-existing health condition and/or expect to use your health insurance policy for more than preventive care, you may want to consider what is most cost-effective in your situation. The policy with the lowest monthly premium may not be the best deal.
- Bronze – 60% of covered medical expenses paid by the policy; 40% by the consumer
- Silver – 70% of covered medical expenses paid by the policy; 30% by the consumer
- Gold– 80% of covered medical expenses paid by the policy; 20% by the consumer
- Platinum– 90% of covered medical expenses paid by the policy; 10% by the consumer
Bronze policies generally have the lowest monthly premiums and highest cost-sharing percentage. Platinum policies generally have the highest monthly premiums and lowest cost-sharing percentage.
Additional cost + healthcare considerations
Keep in mind that you may also qualify for subsidies (i.e., premium tax credits, cost-sharing reductions) that help lower your monthly premium and reduce your out-of-pocket responsibility. This may factor into your decision, and we’ll talk more about this below.
Furthermore, you may want to consider supplemental insurance and insurance add-ons, which provide benefits that can help lower what you pay out of pocket for covered medical expenses.
2. Consider the health insurance policy’s benefits
While all major medical insurance policies are required to have the 10 essential health benefits and preventive care, policies will differ beyond that as far as what treatments, services, prescription drugs, specialists, and other medical expenses are covered and at what rate.
As you compare policies, consider how each covers healthcare and services such as the following:
- Urgent care visits
- Emergency room care
- In-patient hospital care
- Surgical care
- Mental health services
- Out-of-network care
Also consider the following policy-related questions:
- What is the copay for doctor office visits?
- How much is paid under the coinsurance percentage?
- Are the brands of prescription drugs you take covered?
Where can you find this information? HealthCare.gov, state-based exchanges, carrier websites and other websites that sell Obamacare policies will provide these details when you browse and compare plans or get a quote.
There may also be links to more information or brochures that offer additional details. When in doubt, ask—contact the health insurance carrier associated with the policy or policies you are considering for answers to your questions.
3. Consider the provider networks
If you have a preferred doctor or hospital, you want to be certain they are covered by the policy you are considering.
HealthCare.gov or your state-based health insurance exchange may provide a way to search provider networks when you look at policy information. If it does not, you may visit the carrier’s website and search its provider directory.
You may want to call the physician directly and verify that the office or doctor is still part of the network so you won’t have any surprises (for example, the doctor was part of the network and now they are not).
4. Consider your subsidy eligibility
ACA subsidies include:
- Premium tax credits, which lower your premium amount (monthly or annually), and
- Cost-sharing reductions, which lessen what you pay out-of-pocket for medical care by lowering your policy deductible and other cost-sharing including coinsurance, copayments and other similar charges .
To obtain premium tax credits and cost-sharing reductions, you must meet certain household income requirements and buy your health insurance through HealthCare.gov or a state-based exchange. Furthermore, cost-sharing reductions are only available under silver plans.
If you qualify for subsidies, then you will want to purchase from HealthCare.gov or a state-based exchange in order to receive them. You can learn more about Obamacare subsidies here.
Estimate your tax credit using our Obamacare Calculator. Your results, though only an estimate, may help you determine whether or not you wish to buy from an exchange.
Don’t qualify for a subsidy?
If your household income is too high and you don’t qualify for subsidies, you may want to compare your options through the exchanges and in the private market to find the best rate.
You may also want to consider alternative health insurance options for 2019 when the individual mandate tax penalty will be repealed—though alternative health insurance is not ACA-compliant, it does provide you with coverage options if you qualify.
Summary + next steps
Whether it’s open enrollment time or you qualify for a special enrollment period, you will want to put careful thought into your health insurance selection.
For help choosing a major medical policy and other products that can help pay for out-of-pocket medical expenses, contact a licensed health insurance agent. Use Agent Finder to search for local assistance.
Not sure an Obamacare policy is right for you? Learn about alternative health insurance.