The 2015 Affordable Care Act ( aka Obamacare) open enrollment begins on November 15, 2014. There is a lot of information. Here is some information on what you need to know.
First you will see metal tiers of plans, Bronze, Silver, Gold, and Platinum. These are based on what is called “Actuarial Value” or AV. Basically it is how much the plan will cost you in an overall percentage of the claim. To keep it simple on a $100,000 claim, if the plan covers 100% of the claim that would be an AV of 100. That is important, but not something to get hung up on, that is just how they know whether a plan is a Gold or a Silver.
Under the ACA, all plans cover preventive care. That would be like an annual physical, mammogram etc. There are many tests that are considered preventive. So here are the other things you need to consider.
- What is covered by the plan? Some plans for say blood work will have that applied to the deductible. Some may say the first $500 per year are covered at 100%. That is just one of many examples of how plans differ.
- The Cost of the plan! This is more than just the premium. People get caught up in the premium and often choose the plan based on the lowest premium. What else goes into cost besides premium. Doctor’s office co-pays. The deductible which is what you pay before the insurance kicks in, and most importantly, what is the out of pocket maximum. Many family plans under the Affordable Care Act have out of pocket maximums over $12,000 per year.
- The third thing you need for and this is becoming more and more important under the ACA, is whether or not your doctor and hospital are part of the network. Many insurance carriers under the cost constraints of the law had to shrink their network of doctors to keep the premiums lower. You will find many of the doctors and hospitals are no longer in the network. If you go out of network, you will incur higher out of pocket expenses.
- The last thing you need to be aware of is the type of plan it is meaning a Health Maintenance Organization (HMO), a Preferred Provider Organization (PPO) or a Health Savings Account (H.S.A.).With an HMO, you need to get a referral from your Primary Care Physician (PCP), in order to see a specialist or to have testing done. A PPO generally costs more, but you have a lot more flexibility and normally do not need a referral to see a specialist. The Health Savings Account is a newer type of plan, which is more catastrophic in nature, but allows you to tie a savings account to the health plan used for medical expenses. The H.S.A. comes with some tax benefits. For more information on H.S.A’s see the article (http://www.foxbusiness.com/personal-finance/2012/05/03/tax-benefits-opening-health-savings-accounts/).
Under the Affordable Care Act, Advanced Premium Tax Credits are Available. These are more commonly known as a Federal subsidy. You can only qualify for these if you purchase through the insurance exchange or “marketplace”. To qualify for these your 2015 Modified Adjusted Gross Income has to be less than..
$46,960 for an individual
$62,040 for a couple
$78,120 for a family of three
$94,200 for a family of four
$110,280 for a family of five
$126,360 for a family of six
If you qualify for a subsidy you can have that paid directly to the insurance carrier on your behalf. So for example, if the cost of insurance is $1000.00 per month, and you qualify for a subsidy of $500 per month, you would pay $500 per month for the insurance.
You should always contact your insurance broker, before trying to select a plan on your own. As you can see it can get complicated.
Thanks for reading. Eric Wilson is President of I Sell Health, Inc. He can be reached at 888-448-5370 or online at www.isellhealth.com.