NEW YORK (MainStreet) At least one good thing has come from the Affordable Care Act. In spite of all the political posturing, Obamacare is causing a lot of people to ask questions about health insurance. The uninsured and self-employed have particular questions, as do young adults facing their first policy purchase. And annual enrollment for employer-sponsored health insurance is looming for millions of Americans who purchase their health insurance at work.
According to a recent Gallup poll, nearly two in three uninsured Americans say they will get insurance by the deadline of January 1, 2014, rather than pay a fine as mandated by the Patient Protect and Affordable Care Act (PPACA). One in four say they will pay the fine. Less than half of the uninsured say they plan on getting health insurance specifically through a federal or state health insurance exchange.
But among the age group most likely to be impacted by mandatory health insurance, nearly one-third (31%) of 18- to 29-year-olds might be faced with paying a stiff penalty. That's the number of young Americans who say they don't even know about the new law requiring health insurance.
Don't put it off
Joel Winston is a former deputy attorney general for the state of New Jersey, now a New York-based consumer issues attorney. He says that while the deadline for obtaining health insurance may seem a long way off, the application process will take quite a bit of time.
"Enrolling in a new health insurance plan with unfamiliar features and options is a lengthy process and consumers should budget extra time to understand their options and complete the application," Winston says. "The forms will take a few hours to complete, especially if you're not familiar with insurance industry terminology, such as deductible, co-payment, co-insurance, exclusions and out-of-network. And if you've never applied for health insurance in the past, expect the insurance application process to take as long as completing your yearly taxes."
Coverage previously unavailable at any cost
A major benefit touted by proponents of the PPACA is the strictly-enforced availability of coverage, regardless of previous medical history and pre-existing conditions. And millions of Americans will qualify for subsidies to help pay for health insurance, while millions more will be newly eligible for government programs like Medicare and Medicaid.
"Remember, before the Obamacare health care reforms, insurance companies could reject insurance applications based on their present or future risk and were able to rescind coverage, which resulted in insurer abuses," Winston says. "Prior to the PPACA, health insurance was one product that some people just could not buy, no matter how much money they were willing to pay. Under the new law, every health insurer must offer essential care and services, including maternity care."
Too much is not better
"Most people think health insurance is to cover every sniffle they have, so they buy way too much insurance and don't utilize the tax advantages of Health Savings Accounts," says Michael Battaglia of InsureYouToo, an independent insurance agency in McKinney, Texas. "Co-pays and prescription plans usually don't pay to have. So many people will pay an extra $150 per month to get a $35 co-pay they will use 3 times a year. Of course, they would never consider buying auto insurance to cover tune-ups, oil changes, or battery replacements. You need to look at the total yearly cost, including the tax benefits."
Not everything is covered
Barry Sloane, CEO of Newtek, a health insurance broker based in New York, says that health insurance is not a one-policy-covers-all proposition.
"It is important to note that for small business owners and individuals alike, that dental, vision, disability, life and critical illness policies are not covered under exchange plan options," Sloane says. "These coverages are going to remain in the private market, and will not be required under the Affordable Care Act."
Pay the premium or the penalty?
Some people facing the premium costs of health insurance for the first time may be asking themselves, "should I enroll in a plan or simply pay the penalty?" FAIR Health, a not-for-profit health insurance information provider, offers its Consumer Cost Lookup, a tool that estimates the cost of various medical treatments. It can be a real eye-opener. Since many exchanges won't offer out-of-network services, the tool helps consumers better understand their potential out-of-pocket expenses.
What to know about at-work enrollment
When open enrollment for employer-sponsored health insurance benefits rolls around each year, there is a common tendency to simply renew whatever coverage was in place for the previous year. Robin Gelburd, president of FAIR Health, says that can be a mistake.
"It's important that employees who are re-enrolling in an employer-sponsored plan look beyond the cost of their plan premium," Gelburd says. "Regardless of any changes to the plan's cost, there could be significant changes to their plan's benefits that should be closely examined -- have the services that the plan covers or the out-of-network reimbursement provisions changed? Has the plan's provider network changed? Consumers need to do their homework and not assume their plan benefits will remain the same."
She says it is also wise to assess needs each year from the ground up.
"To select the plan that best meets their needs, consumers should determine how a potential plan covers services that they, and their families, will use frequently," says Gelburd. "For example, are all of their current doctors in the plan's network and, if not, how much of their fees will the plan cover? Does the plan require referrals or prior authorization? And finally, how much will it cost to cover a spouse and/or children?"
--Written by Hal M. Bundrick for MainStreet