The average person’s definition of health insurance might read something like, “a nice-to-have luxury that is impossible to afford.” Health insurance was once a big-ticket expense. However, now that the Affordable Care Act (also known as Obamacare) is in place, all Americans have access to affordable medical coverage, many times for only $50 a month, depending on their annual income level.
One of the main reasons individuals remain uninsured is perception of cost. Many people don’t think they can afford health insurance, so they don’t even look at their options. But the reality is, the amount of money the government provides individuals and families to help pay for their monthly health insurance bills can cover more than 70% of the cost, if not more.
Moreover, having health insurance is required by law. In 2015, failing to buy a health plan can result in a fine of $325 per person or 2% of your income, whichever is higher. The fine is applied to your income taxes, so if you expect a refund every year but don’t have health insurance, you could wind up paying Uncle Sam a chunk of cash. The fine goes up to $695 per person in 2016, or 2.5% of your income.
The first step in buying health insurance is to think about it as a necessary product you would shop for at any given time. Take shoes, for example. When you shop online for a pair of shoes, you have many choices. What happens when you want to look for a certain color or a certain style? You filter your options to see only what you are interested in. Shopping for health insurance can work in the same way. Here are some of the basics you need to think about when filtering through healthcare plans:
Comparison shopping. Think back to the example of shopping for shoes online. Most individuals have 30-40 health insurance plans to choose from, so it’s important to line plans up and compare price, including extra out-of-pocket costs that come from deductibles, copays and coinsurance.
The color of the plan. Health insurance plans are categorized by “metal level,” which are bronze, silver, gold, or platinum. Bronze plans are the most affordable on a monthly basis, but you have to pay more money out of your wallet for medical care. Silver plans offer more insurance coverage, gold even more, and platinum plans typically cover up to 90% of medical expenses.
Medical needs. Think about how much you use healthcare in a given year. Do you see a doctor only once a year or do you have children who are routinely sick or have accidents playing sports? The amount of medical services you need in a given year should dictate how much insurance coverage you apply for. For example, if you see a doctor or visit urgent care 12 times in a given year between all of your family members, a health insurance plan with a lower deductible and copay options might be a better fit for your medical lifestyle.
Check the doctor and hospital network. Once you have narrowed your options to a few health insurance plans, check the provider network. If you want to see a particular doctor or urgent care clinic close to home, you should know in advance if the health plan you are most interested in will pay for services at the clinic you want to visit. This goes for hospitals as well. If you believe you will have at least one ER visit each year, make sure the hospital you visit is in the insurance company’s network.
See if you qualify for financial benefits to help pay for your plan. More than 87% of Americans who have health insurance through the federal marketplace qualified for financial benefits, also known as tax credits, on their health insurance in 2015. That’s an average cost savings of $263 per individual per month. If you haven’t checked on plan pricing, the handy tax credit calculator at www.healthcare.com/subsidy-calculator can help you estimate if you qualify for financial benefits on your health insurance.
The next health insurance open enrollment period begins November 1, or you can apply for an insurance plan before this date if you have a special event happen in your life, like getting married, getting divorced, having a baby, or moving to a new zip code.
You might think having health insurance is outside of your monthly budget, but it pays to look at all of your options, avoid paying a fine on your taxes, and ultimately, having coverage to help pay for the unexpected illnesses and accidents of life.