With the Affordable Care Act less than 3 months away, you may have to make some decisions soon about either changing your health insurance policy or looking for a new plan. Going without insurance is going to cost you a federal tax in 2014 so you’re better off all the way around having adequate health care insurance. Yet, trying to navigate the amount of information out there about which health plan covers what can be confusing and overwhelming. If you keep these 5 things in mind, though, you’ll make the choice right for you.
1. Employer plans may not be the best choice. If you’re working and your employer has been paying for your health insurance you’ve had the benefit of having coverage that likely covered pre-existing conditions, if you had one. However, many employers deduct money from employees’ paychecks to cover their premiums, albeit at lower group rates. If you lose your job, you can still keep your health insurance under the COBRA act for 18-36 months, but the rates are very high. You can also opt out of your employers’ plans and pay for your own policy, which may save you money, especially if your health is very good. A good place to comparison shop between plans is ehealthinsurance.com, or the government’s healthcare site, healthcare.gov.
2. Will you be able to keep your current doctor? Many people like to stay with a favorite doctor that they’ve seen for years. Some health plans, though, require you to change to doctors that are in their payable networks. If you take one of these plans, and still want to see your old doctor, they won’t be covered and you will pay out of network fees to continue to see them. Other health plans require you to get a referral to see a doctor you want.
3. Will your prescriptions be covered? If you take regular prescriptions, you’ll want to make sure that they will be covered, and/or what co-pay cost to you. Buying a health plan that requires you to pay higher co-pay for your prescriptions will need to be worked into your budget, but sometimes the other benefits of the plan may be worth paying a little extra co-pay.
4. What is the deductible? If you have a pre-existing condition or two, you will likely want to pay a little more premium up front and have a lower deductible. If you need to visit your doctor more than twice a year, for regular checkups, you can really accumulate a lot of medical bills paying off the high deductible fees. Yes, you can write those bills off from taxes each year, but you’ll still need to pay the bill during the year.
On the other hand, if you’re in very good health, it would be to your benefit to choose a higher deductible/lower monthly premium plan. If you only visit your doctor once or twice a year for check ups and preventative tests (like covered mammograms, PSA’s, bone scans, etc), you will never reach the deductible amount anyway and will have only minimal pay outs for deductibles. For example, if your deductible is $2,500 and you only incur medical bills that are never more than $500 annually, you’re still paying out less than, or equal to even a $500 to $1,000 deductible, but are paying a much lower monthly premium. Keep in mind that $0 deductible plans are very expensive monthly.
5. Consider Health Saving Accounts. These are plans that sometimes go along with higher deductible health care plans. It allows you to save money tax-free in a health savings account and be able to use it later to pay for deductible fees.