Stern Advice-Braving the new world of Obamacare exchanges
WASHINGTON, Sept 25 (Reuters) - Here comes the day the Obamacare enthusiasts have been waiting for and the haters have dreaded: The state health insurance exchanges mandated by the Affordable Care Act open for business on Tuesday, Oct. 1.
Finally, Americans will start to see their health insurance options for 2014. Here's a key number: The average cost for the average plan will be $328 a month for one person. That figure covers a wide range of policies and prices.
Everyone from the never-covered to the complacently covered at work should find out what's being offered and get strategic. Even if you are satisfied now, you may find it pays to learn and shop.
There is time for deliberation. You can shop through the end of this year for coverage that kicks in on Jan. 1. And even if you take longer, you have until March 31 to sign up for 2014 coverage. After that, you can use the exchanges to purchase 2014 only if you have a life-changing event, such as a divorce or the death of a spouse from whom you've been getting coverage.
Here's how to shop for coverage:
- Study all your choices: With the addition of public exchanges, there will be three ways to find insurance: from an employer, by buying it from a public exchange or through a private exchange, usually run by an insurance brokerage, such as ehealthinsurance.com or healthcompare.com.
For most people who can get coverage at work, that will be their best choice because it will be subsidized by their employer. But if your employer won't subsidize coverage for your spouse, partner or kids, you might find a better deal on one of the public exchanges, where you can get coverage that meets federal guidelines that will limit your out-of-pocket costs.
The private exchanges will offer a third tier of coverage: Some plans will be cheaper and have higher out-of-pocket costs than those offered on public exchanges. Others may provide consumers with a wider network of in-plan physicians and hospitals than they will find on the exchanges. But the plans won't always have to hew to the same federal limits on deductibles, co-pays and cost sharing, so pay attention to the small print.
- Determine whether you'll qualify for a federal subsidy. If your employer provides comprehensive coverage that costs you less than 9.5 percent of your annual income, you will not qualify for a subsidy, even if you shop the exchanges.
If you don't get that affordable coverage at work, you'll qualify for subsidies on your premiums if your household brings in less than 400 percent of the federal poverty level for its size.
- Decide whether to split your family's coverage. There's a trap hidden in the subsidy rules: If your employer provides affordable coverage for you, nobody in your family is eligible for subsidized coverage on the exchanges, even if your finances would otherwise qualify the whole household and even if you opt out of your employer's plan to shop with the rest of the family. You may decide to shop on the public and private exchanges for your spouse or domestic partner and kids separately to find the coverage for them that would be best and most affordable.
- Emancipate your young adult. Your twentysomething child can be included in your health insurance plan until he is 26 - but he may find a lower-cost and subsidized plan on his own if he is a low earner and doesn't live in your household. Furthermore, if he lives in a different part of the country, your coverage may not be optimal for him. His doctors may all be "out of network" for your plan.
- Call your doctor. Just as you did pre-Obamacare, you'll want to make sure your favorite physicians and hospitals participate in the plan you choose, lest the higher costs you'll face for going out of plan blow your budget. You can get some data on participating provider lists from the policy listings on the exchanges, but it would be good to check directly with your family doctor to make sure she is participating in the plan you choose and has generally had a decent experience getting paid by the insurance company you're choosing.
Jonathan Wu of research site ValuePenguin notes that in some areas the policies will be very regional and may limit their networks to one county or two. If you regularly travel to a different state, check to see that your policy covers your care there as well.
- Choose your metal. The plans on the public exchanges are standardized, and shoppers can choose among bronze, silver, gold and platinum plans. The good news is you no longer have to check the policies to make sure they cover mental health or maternity care - all are required to do that. The various plans mainly differ in the way their costs are structured.
Bronze plans have the lowest premiums but offer the highest out-of-pocket costs. They are a good choice if you have some savings to pay those out-of-pocket costs, want to limit your premiums and can take advantage of the tax benefits you'll earn by using a linked health savings account to accumulate money for healthcare costs.
One important note: If you earn less than 250 percent of the federal poverty level (roughly $58,875 in 2013 for a family of four), you'll also qualify for some subsidies on your out-of-pocket costs - which you'll only be able to get in a silver plan. The high-end gold and platinum plans are for people who have frequent doctor visits and would rather have the certainty of higher premiums and very low out-of-pocket costs.
- Relax. In a post-Obamacare world, no insurer can reject you or charge you more for pre-existing medical conditions. So you won't be locked into any plan for life, as you might have been had you developed a chronic condition after signing up for health insurance. That means if you go through all these steps and still feel like you chose the wrong plan, the damage is limited - you can do all this again next year, for 2015.