Top 5 Things To Know When You Compare Health Insurance Plans

When you are young and new to the world of insurance, it is important to know what to look for when you compare health insurance plans.  There are a ton of plans and companies that want to sell you one of their policies.  If you are not careful, you can end up buying something that is not affordable or comprehensive enough.  With that in mind, here are some things to keep in mind when analyzing the right medical insurance plan for you and your family.

The Premium

The premium will probably be what grabs your attention right off the bat.  You cannot compare health insurance options without knowing the premium.  After all, you may not have a claim, but you definitely will be paying something to the insurance company each month.

The problem with only paying attention to the premiums is that you can buy a bad product from a bad insurance company if you just look at how much a plan costs.  Ever heard the saying, “you get what you paid for?”  The same goes with an insurance plan.

While the premium is important, especially with the increase in the cost of medical care, there are other things that must be considered when you compare health insurance plans.

The Benefits Available

Some plans cost less on a monthly basis because they leave more for you to pay out of pocket if you were to get sick or be in an accident.  If you want a plan that leaves you with less of a financial responsibility then you will have to pay more in your premium.

The main benefit provisions to look for are the deductible, coinsurance, copays, and out of pocket maximums.  As you compare health insurance benefits, be sure to take into account what you are willing and able to spend if you were to have a large medical expense.

The Network of the Insurance Company

Most insurance companies have networks of doctors that they contract with to provide lower cost healthcare services.  The billed charges of the services are discounted through the network, but in exchange, doctors and hospitals are able to attract more patients.

As you compare health insurance plans, make sure to choose an insurance company that has a network that your healthcare providers are a part of.  Do not just think of your family doctor.  Remember specialists, labs, and even pharmacies.  You can find yourself having to change doctors or pay big sums of money out of pocket if your provider is not in your new insurance company’s network.

The Health Insurance Marketplaces

The health insurance marketplaces, or exchanges, outlined in the Patient Protection and Affordable Care Act (PPACA), or Obamacare, are online locations where individuals and small businesses can quickly and easily compare health insurance plans.  Do not ignore these marketplaces, as they could have good options for you.

That does not mean that the marketplace is a better choice than other insurance options.  But it might be, so check  it out.

Tax Credits

Something that might make your decision easier is a tax credit.  If you make less than 400% of the poverty level, you are eligible for a tax credit if you purchase medical insurance through an exchange.  Check on this as it can help bring down the cost of a health insurance plan.

Compare Health Insurance Plans to Find the Best Fit

It can be time consuming, but if you want the most affordable and comprehensive plan for you and your family, make sure to take the time to compare health insurance plans in every way possible.  If you look at health insurance marketplaces and take into account premiums, plan designs, and networks, you can find a great fit.

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What is a Summary of Benefits and Coverage (SBC) and Why is it Important?

When you are new to the world of health insurance things can be confusing.  What is my deductible?  What is the most that I have to pay out of pocket?  Do my copays count toward my out of pocket maximum?  With many medical plans, the language of the plan summaries are hard to understand, and is can be difficult to compare plans on an apples-to-apples basis.  Under the rules and regulations of the Patient Protection and Affordable Care Act (PPACA), more commonly referred to as Obamacare, plans can be more easily compared using the Summary of Benefits and Coverage (SBC).

The entity that is insuring the plan is responsible for supplying the SBC.

How Does a Summary of Benefits and Coverage Make Things Easier?

An SBC is no longer than 4 pages (can be front and back, so really it is 8 pages long) and should be written in plain language.  It should also be in 12-point font.

All health insurers (whether insurance companies or self-funded plan sponsors) must insert plan design wording in predetermined rows and columns using the exact same wording, format, and layout.

These two features of the SBC make reading and comparing benefit designs an easier process than it used to be.

What All Must Be Included in a Summary of Benefits and Coverage?

An SBC must also include the following:

  • Coverage examples and expected out of pocket expenses for having a baby and managing Type 2 Diabetes.
  • A glossary of common medical and insurance terms.  This glossary must be provided upon request. <link to my own glossary>
  • A website and phone number where plan subscribers can receive additional information about their medical insurance plan.
  • The exceptions, reductions, or limitations of coverage
  • Provisions of renewability and continuation of coverage

Who Is Responsible for Supplying the Summary of Benefits and Coverage?

The entity that is insuring the plan is responsible for supplying the SBC.  That means that if the plan is an individual plan, then the insurance company provides the SBC.  If the plan is a fully-insured employer group plan, the insurance company provides the SBC.  If the plan is a self-funded employer group plan, then the employer provides the SBC.  If you are not sure if your employer plan is fully-insured or self-funded, ask your benefits department representative.

When Should a Summary of Benefits and Coverage be Supplied?

The SBC must be provided in electronic or paper format.  There are several scenarios about when it should be distributed to plan subscribers, but in all cases it must be provided near enrollment, or within 7 days of being requested.

Why Is a Summary of Benefits and Coverage Important?

One of the biggest complaints about health insurance is that it is too complicated for many people to understand.  With a Summary of Benefits and Coverage, a subscriber to an insurance plan, or someone considering an insurance plan, can easily read the plan benefits available to them.  When the decisions must be made about which plan to choose, the Summary of Benefits and Coverage helps people weigh the plan design and premiums to determine what is right for them and their family.

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So What is Cover Oregon All About?

By now, many of you have seen the Cover Oregon commercial that tries to make Oregonians aware of health insurance plans that will be available in 2014 (with Open Enrollment set to begin in October) under the state’s exchange, or marketplace.  If you have not seen the advertisement, here it is:

http://www.youtube.com/watch?v=Xv2UUcXCo9g&width=500

 

What is Cover Oregon?

Cover Oregon is a central online location where the people of Oregon can shop for and compare health insurance plans through the state’s exchange, or marketplace.  In addition, the site will assist potential customers with determining their eligibility for subsidies to make the insurance plans in the marketplace more affordable.

Gotcha.  Now What is a Health Insurance Marketplace?

The Patient Protection and Affordable Care Act (PPACA), or as most people know it, Obamacare, outlined what are called health insurance exchanges.  The terminology has been changed to marketplaces, but the idea is the same.  With one stated goal of the Affordable Care Act being to help more people obtain medical insurance coverage, lawmakers wanted to create a simple way for customers to compare plans while eliminating as much confusion as possible.  Enter the marketplaces.

The marketplaces will be set up by each state, but not all states are participating.  Citizens of states that do not have a marketplace will be allowed to purchase insurance through a federal marketplace.  Once set up, Americans will be allowed to go online to these exchanges, and compare health insurance plans.  The plans will have the same benefits, just different levels of potential out of pocket expenses.

The plans will be called Gold, Silver, Bronze, and Platinum.  The Platinum plan will have the least out of pocket exposure but will cost more than the other plans.  Conversely, the Bronze plan will have the most out of pocket exposure but will cost less than the other plans.

Will These Exchanges Cost More than My Group or Individual Plan?

Maybe, maybe not.  It is very hard to compare insurance plans on an apples-to-apples basis since there are so many variables that go into an insurance premium.  If you look for plans at an online marketplace like Cover Oregon and you are not satisfied with the premium, you are still free to look for insurance elsewhere.

Will I Be Able To Get Financial Assistance for the Premiums?

Financial assistance will be available to people if they make less than certain thresholds.  Individuals earning less than 400% of the federal poverty level will definitely be eligible for financial subsidies.  The subsidies work like a tax credit, but if you cannot wait until tax time to receive your money then there are options available to get the help immediately.

Will Other States Have Sites Like Cover Oregon?

For states that have marketplaces, then yes, they will have an online site where their citizens can buy medical insurance.  As time goes on, the sites will become easier to navigate and will truly be a one stop shop for finding solutions to your healthcare needs.  There is just no guarantee that they will have as catchy a tune as Cover Oregon.

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How Can Young People Find Low Cost Health Insurance

When you are young and low on funds, finding low cost health insurance is a must.  When you go out searching for medical plans to enroll in, the monthly premiums can be overwhelming.  Fortunately, there are ways to keep the cost of your medical insurance needs as low as possible.  One thing, to keep in mind, though, is that the Patient Protection and Affordable Care Act (PPACA), or more commonly referred to as Obamacare, prevents the premiums for young people being as low as they otherwise could be.

Be Willing to Accept Larger Out of Pocket Expenses

Insurance is all about how much risk you are willing to take.  You pay a premium in exchange for the insurance company paying your medical claims.  If you want them to pay more claims when you are in need of medical care, then you will pay a higher premium.  Therefore, one way to get low cost health insurance is to enroll in plans with high deductibles, copays, and out of pocket maximums.  This leaves less financial exposure to the insurance company, and thereby reduces your monthly premium.

Join Your Employer’s Health Plan, if Available

If your employer offers a health insurance plan, it will almost always be less expensive that what you could find in the individual insurance market, especially for the employee portion (the dependent portion could get expensive).  Most employers subsidize the premium as a benefit to their employees.  And due to PPACA requirement, the plan will most likely be comprehensive enough to cover your health care needs.

Look at Your State’s Health Insurance Marketplace

PPACA has created health insurance exchanges, or marketplaces, where individuals can shop online and plainly see different medical plan options and their prices.  The idea of the marketplaces is to lower health insurance costs by creating a competition amongst insurance companies.  If this quest is successful, it can be a great place to find low cost health insurance.

If your state does not offer a marketplace, you can shop on the federal exchange.

Search for Yourself for Health Insurance on the Individual Market

If the exchanges don’t work for you, and your employer doesn’t offer a medical plan, you are still free to shop for insurance on your own.  The marketplaces are not the only places to find insurance.  Insurance companies like Blue Cross Blue Shield, Aetna, Cigna, UnitedHealthcare, etc. will still sell individual plans.  To make things easier, contact an insurance broker.

One Bad Thing About PPACA and Being Young

One of the ingredients that goes into an individual medical insurance premium is the age of the applicant.  Younger people have less claims, and thus their premiums are lower.  However, PPACA has limited how much higher the premiums can be for older people than younger people.  Therefore, the premiums for older people and younger people have been brought closer together.  This means that a premium for a younger person will be higher than before.  In essence, the law is asking younger people to help pay the cost of medical claims that older people incur.

Low Cost Health Insurance is Available through Subsidies

PPACA helps low income earners with premium subsidies through tax credits.  There are online tools to help you determine if you are available for this assistance.  The online marketplaces will also be able to determine if you are eligible.

Medical insurance plans will never be a cheap expense, especially with additional coverage being required by the legislature, but for young people, low cost health insurance is definitely available; it just might take some time and research.

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