Obamacare open enrollment is upon us. If you’re currently uncovered, and you want to protect yourself against an unexpected illness or injury—or if you just want to avoid a tax penalty—then now is the time to do some insurance shopping.
The average price of a silver plan—the mid-tier and most popular type of policy sold on the Obamacare exchanges—is rising a stunning 34 percent for 2018, according to research from Avalere Health, a Washington D.C.
consulting firm. That jump from $554 to $743 a month is more than many people can handle.
Fortunately, thanks to subsidies (more on those in a moment), not everyone will have to shell out all of that money to secure a silver policy. But for those who can’t afford the traditional exchange policies, there are other, cheaper options that shouldn’t be overlooked.
Before you dive into those options, a note of caution, says healthcare expert Shelby George, Senior Vice President of Advisor Services at Manning & Napier. “The unfortunate reality today is that there’s so much jargon, complexity and misunderstanding in the health insurance world,” she says. “It’s become just like shopping for a car. Spend the hours necessary to understand what you’re getting for what you’re paying.” Here are some questions you should be asking.
Can You Get Insurance for Free?
Before you shake your head at the prospect of an unaffordable policy, figure out what you’ll actually pay.
For many people, the answer may be nothing.
To understand why, we need to look at the Trump administration’s recent move to eliminate cost-sharing subsidies—those payments that the government made to insurers to help cover health care costs for low-income people. Insurers, who foresaw this eventuality, boosted the cost of their silver plans.
But a side-effect of this development is that we saw an increase in the size of the premium subsidies paid to individuals who earn less than four times the poverty level (about $48,000 for individuals, and families of four earning less than roughly $98,000). In other words, low-income families will benefit.
If you’re still set on buying that silver plan—which covers 70 percent of health care costs, with the other 30 percent covered by the insured—you’ll have to make up the difference between the subsidy and the full premium. But if you take the subsidy and apply it to a bronze plan, which covers 60 percent of health care costs, you may not have to pay out of pocket at all. Every state has different rules and different costs, but this bears looking into before you evaluate any other alternatives.
Is a Short-Term Policy for Me?
Ironically, health insurance becomes more unaffordable for people who make too much to qualify for a premium subsidy, explains Nate Purpura, Vice President of Consumer Affairs at eHealth.com. The Affordable Care Act defines “unaffordable” when costs exceed 8 percent of your adjusted gross income. Purpura’s analysis shows that individuals who make between about $49,000 and $69,000, and families who make between $99,000 and $129,000, fall into that range.
At that point, you won’t be penalized for not buying coverage–but, of course, that’s not what we’d suggest. If you can’t figure out a way to make a traditional policy work by cutting other corners, a short-term policy is one thing to consider. President Trump’s Executive Order mandated the offering of short-term policies of up to a year, where before they were limited to three months. That hasn’t happened yet, but you can essentially get the same thing by purchasing a three-month policy that will renew for the next nine months.
Although these policies do not cover you for pre-existing conditions that transpired before you purchased the policy, Purpura explains that if you develop a condition during the term, you’ll have coverage for it for the rest of the year.
Short-term policies offer limited benefits compared with policies on the Obamacare exchanges—they don’t include maternity care, substance abuse and mental health, and can charge more at the outset for people with pre-existing conditions.
But, on the whole, they cost less than comprehensive policies without a subsidy. A 35-year-old could purchase a policy with a $5,000 deductible and $500,000 in total available benefits for about $100 a month.
Or, Perhaps a Combo Platter?
The other way to arm yourself is with a combo platter of sorts, mixing traditional indemnity insurance (designed to pay a set daily benefit if you’re hospitalized or in an accident) with a short-term or mini-medical plan that can enable you to get to the doctor a few times a year for your more minor ailments. eHealth noticed consumers jury-rigging these sorts of arrangements on their own, with sometimes troublesome results. Every claim had to be filed with all insurers on the menu so that every possible dollar could be recouped. That became complicated, so recently the company rolled out combo plans with single insurers to make the claims process easier. Still, Purpura notes you have to pay particular attention to two things: “Is the plan medically underwritten [based on your health], or guaranteed issue?,” he says. And secondly, “What will it cover on a daily basis if you’re hospitalized?” Don’t be fooled, he says: Make sure you understand what you’re getting for what you’re paying. What is Ambetter From Coordinated Care?
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