How to Pick a Health Insurance Plan

Open enrollment for health insurance

Every year, tens of millions of Americans have the opportunity to enroll in a health insurance plan during a specific window of time called the open enrollment period. Consumers can sign up for coverage for the first time or change their existing plan during this period, with coverage kicking in on Jan. 1, 2021. Open enrollment for the 2021 health insurance exchanges, commonly known as the marketplace, runs from Nov. 1 to Dec. 15.

Health insurance exchanges vary by state.

The Affordable Care Act called for the creation of exchanges in each state, but the enactment varies widely by state. There are 15 state-based exchanges, 24 federally facilitated exchanges and six state-partnership exchanges for 2021, according to healthinsurance.org. The health insurance plans in the marketplace provide subsidies for some lower- and middle-class consumers, depending on their income.

Subsidies are available for people who earn between 100% and 400% of the federal poverty level, according to the U.S. Centers for Medicare and Medicaid Services. For a family of four, that would mean an annual income between $26,200 and $104,800, according to the 2020 Poverty Guidelines published by the U.S. Department of Health and Human Services.

Employer-provided coverage, Medicare and Medicaid

In 2019, about 153 million Americans — more than half of the non-elderly population in the U.S. — had employer-provided health insurance, according to the Kaiser Family Foundation. Millions have lost their employer-provided health insurance because of job losses caused by the COVID-19 pandemic.

For people with employer-provided coverage, many companies set aside a two- to three-week enrollment period between October and November, says Rebecca Madsen, chief consumer officer for UnitedHealthcare, a global health insurance company. The company serves individuals, employers and Medicare and Medicaid beneficiaries. For the more than 67 million people who have Medicare, the annual enrollment period runs from Oct. 15 to Dec. 7. Medicare is the government health insurance program that primarily provides health insurance for Americans age 65 and older. It also provides coverage for people with disability status (as determined by the Social Security Administration) and some younger people. Medicaid is a separate federal and state program to provide coverage for people with limited income.

Which marketplace ‘tier’ is right for you?

Marketplace health care plans are available in four categories: Platinum, Gold, Silver and Bronze. The tiers are separated based on their cost structure — specifically, how patients and their plans split the cost of health care, says Corey Ford, director, reimbursement and policy insights for Xcenda, a strategic consulting and field reimbursement services firm that works with pharmaceutical and biotech markets to help them navigate health care markets. “For example, patients who select Bronze plans generally will have lowest monthly premiums but highest out-of-pocket costs,” Ford says. “Meanwhile, patients who enroll in a platinum plan will pay the highest monthly premiums but the lowest out-of-pocket costs.”

In addition to the four tiers, certain patients meeting certain criteria can also select “Catastrophic” plans, which are affordable options to protect yourself against worst-case scenarios. When evaluating which plan is best for you, consider your medical history, Ford says. If you’re relatively healthy and typically have a low number of medical appointments, consider a lower-priced plan, such as a Bronze or Silver option, particularly if you can afford higher out-of-pocket costs. Conversely, patients who are managing a chronic illness — such as heart disease, diabetes or cancer — may want to consider a higher-priced plan, typically Platinum or Gold, that offers lower out-of-pocket costs.

Six key elements to consider

When evaluating different health insurance plans, Ford says, it’s a good idea to consider these six key elements:

— The plan’s health care provider network.

— Monthly premiums.

— Deductibles.

— Drug formulary.

— Copayments.

— Coinsurance.

Consumers should weigh all of these factors, Ford says. “Before selecting a plan, patients should confirm that their preferred health care providers, hospitals and pharmacies fall within the plan’s network,” he says. “Otherwise, patients may face additional out-of-pocket costs for services at those sites.”

When considering a plan, be sure you can afford the monthly premiums. Also, educate yourself on each plan’s deductibles — the amount the consumer must spend before coverage kicks in. Each plan also has a drug formulary, which is a list of prescription medications covered by the plan. “Patients — particularly those with multiple prescriptions — should assess coverage of (their) medications by the plan, out-of-pocket costs and any annual restrictions,” Ford says. It’s also a good idea to learn about each plan’s copayments, which is a fixed amount paid when you seek health care, and coinsurance, the percentage you owe on the total cost of a particular service.

Special enrollment period

People who purchase marketplace insurance but miss their state’s open enrollment deadline may still have an opportunity to get insurance for the year, Ford says. Those who have experienced certain life events — such as losing health insurance coverage, moving to another location, getting married, having a baby or adopting a child — qualify for a special enrollment period. The timing depends on the specific circumstance, but consumers may have as much as 60 days before or after the event to enroll in a plan.

How to avoid paying a tax penalty

Initially, the Affordable Care Act included a penalty for not obtaining health insurance. While you can no longer be penalized for being uninsured on a federal level, some individual states still enforce those mandates, Madsen says. New Jersey, Massachusetts, California, Rhode Island and the District of Columbia impose a penalty for not having health insurance. Penalties vary per state, and are either based on a person’s income or are levied at a flat rate.

Consider selecting a plan with telehealth services.

Telehealth visits have become increasingly popular during the COVID-19 pandemic. Virtual visits allow you to connect with a health care provider via a laptop, smartphone or tablet, Madsen says.

Look for wellness incentives.

Many plans now offer financial incentives that reward you for taking healthier actions, such as completing a health survey, improving your fitness by exercising or avoiding nicotine, Madsen says. Some plans offer gym memberships and wellness programs for members at no additional cost.

More from U.S. News

Guide to 2020 Medicare Enrollment and Best Insurance Companies

15 Things Millennials Should Know About Open Enrollment

5 Places to Get Health Care That Aren’t a Clinic

How to Pick a Health Insurance Plan originally appeared on usnews.com

Update 10/19/20: This story was published at an earlier date and has been updated with new information.

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