NEW YORK (MainStreet) — Many previous health insurance plans are getting phased out this year as insurers consolidate their offerings.
If you need to buy new coverage for 2015 that is comparable to your current plan and want to avoid hassles such as choosing new doctors, here are some tips to ensure the conversion is only a minor hiccup.
If being able to see your current physician for checkups is a primary concern, make sure your doctor is in-network when you are shopping for a new plan. If your carrier and plan both change next year, ensure that your preferred physician accepts both your new insurance carrier and your new health plan before enrolling, said Michael Mahoney, senior vice president of consumer marketing for GoHealth, a Chicago-based online health insurance exchange.
Since health insurance companies negotiate lower rates with a specific network of physicians and hospitals to keep costs low, you can also save money on out-of-pocket costs by staying within that network. If you have a PPO plan with a $20 copayment currently, an office visit might only cost you $20 if you visit an in-network doctor. However, if you visit a doctor outside of your network, you may be responsible for the entire bill, which could really hurt your finances, Mahoney said.
“Your portion of the bill depends on your health plan, but the bottom line is that you will pay more if you go out of network,” he added.
In order to maximize your savings, it’s important to shop for health insurance with an exchange that has the ability to enroll you in subsidized health insurance. During the last open enrollment period, 85% of consumers who shopped for insurance received tax subsidies that made health insurance more affordable. The average person who enrolled in a subsidized silver plan paid just $69 a month, according to the U.S. Department of Health and Human Services.
While government navigators can be helpful, it might be more beneficial to work with a free licensed insurance advisor who can still help you find out if you qualify for tax subsidies that would lower the cost of your monthly premiums and can recommend plans based on your budget and health needs from over 300 companies, he said.
If you want to make an appointment and see a doctor by January 1, 2015, you must enroll in coverage by December 15, 2014. In general, if you enroll and pay your first premium by the 15th of the month, your coverage should take effect by the 1st of the next month.
However, if you forget or wait until after the 15th, your coverage will not take effect until a full 45 days later. For example, if you enroll on January 16th, your coverage will not begin until March 1st, assuming you’ve paid your first premium.
Simply signing up is not adequate, and you’re not covered until you pay. Once you enroll in coverage, you will work directly with your health insurance company to pay your monthly premiums on time to ensure your coverage is active.
Open enrollment, which runs through February 15, gives you a chance to make sure that you are choosing an ACA-compliant health plan that fits your coverage needs and budget, said Carrie McLean, director of customer care at eHealth.com, an online health insurance exchange based in Mountain View, Calif.
Like many of your other bills such as car or house insurance premiums, the monthly premiums for your current plan may increase next year. While monthly premiums for some 2015 plans are still being announced, a 6% projected average increase in monthly premiums for individual coverage has been projected by Price Waterhouse Coopers, she said.
One piece of good news is that you may have some new plans to choose from for 2015. A few brand-name insurance companies that stayed out of the individual and family health insurance market last year will be offering plans for 2015, McLean said. Other insurers will also be introducing new health insurance plans.
Your eligibility for government health insurance subsidies may change. The ACA makes government subsidies available to people who earn up to 400% of the federal poverty level or roughly $47,000 for a single person or $95,000 for family of four. If your income has changed since the last open enrollment period, it’s time to reexamine your eligibility for a subsidy, she said.
“You may no longer be eligible for one or you may be eligible for a bigger subsidy in 2015,” McLean said. “Depending on the preferences you communicated when applying last time, your subsidy could actually decrease or vanish entirely, even if you stick with the same plan next year.”
The “benchmark” plan in your area may change with serious consequences. The “benchmark” plan in your area is a silver-level plan used to calibrate the value of any government health insurance subsidies you may receive, she said.
Since the benchmark plan is the second least expensive silver plan available to you and since rates are changing and new plans are being introduced, the benchmark plan in your area may change also. This means that the value and dollar amount of your subsidies can change, even if you don’t change plans in 2015, McLean said. It’s critical that you shop again during open enrollment to make sure you’re not missing out.
The tax penalties for going uninsured or underinsured are increasing for 2015. While there are still a few months until you have to pay taxes for 2014, many consumers haven’t felt the pinch of ACA tax penalties yet.
In 2014, the penalty for going three months or more without ACA-compliant coverage was $95 per adult or 1% of your annual income, whichever was greater. The penalties are going to increase substantially to $325 per adult or 2% of your taxable income in 2015, whichever is greater.
While you are shopping for insurance, consider how important it is for your health to get prescription drugs when you need them and if you are able to pick the doctors and hospitals who treat you, said Hector De La Torre, executive director of Transamerica Center for Health Studies (TCHS), a Los Angeles-based non-profit which conducts healthcare research.
Determine what type of health plan you can afford or want to have out of the three basic types of health insurance – fee for service, preferred provider organization (PPO) or health maintenance organization (HMO).
The fee for service option is the simplest choice, since you can pick any doctor or hospital at any time, but you will have a set cost, which is usually a percentage of the charges of whatever the doctor charges for their services, he said.
A PPO plan is similar, but you have a list of doctors or hospitals that are “preferred” and it will limit the costs you have to pay. You generally must pick a doctor who will be your primary care physician. This option allows you to see any other doctors or hospitals that are not “preferred” if you want to pay much more for their services.
An HMO plan is the most restricted one and there is a list of doctors or hospitals that you must use for your health care. This plan also requires that you chose a doctor who will be your primary care physician and refers you to specialists as needed. Generally, these plans will not pay for you to receive care elsewhere unless it is an emergency.
--Written by Ellen Chang for MainStreet