If you’re planning to purchase a new individual health insurance plan on a government exchange or want to change the one you have now, pay attention: Decision time is here.
In most states, open enrollment season for health plans on the federal and state exchanges only runs for six weeks, from Nov. 1 to Dec. 15, 2018, half the time that participants had to choose coverage two years ago. (At least six states—California, Colorado, Massachusetts, Minnesota, New York, and Rhode Island, plus the District of Columbia—extend their deadlines beyond the federal limit, giving residents an extra two to six weeks to pick a plan.)
For a change, there’s some good news about what you’ll find for 2019 coverage: This year, premiums for plans that offer the full range of benefits required under the Affordable Care Act (ACA) are expected to drop an average of 1.5% for benchmark “silver” plans, according to the Centers for Medicare & Medicaid Services (CMS)—a huge change from last year’s steep 37% average price hike.
Those averages, however, mask big differences from state to state. Among the 39 states using the HealthCare.gov platform, 2019 prices range from a 26% drop in premiums for the second-lowest-cost silver plan in Tennessee to a 20% increase for a comparable plan in North Dakota. In total, 17 states of those states will see premiums fall for next year, while premiums will stay flat or rise for the other 22.
Also critical to understand: CMS bases the expected premium changes on rates for a healthy, single 27-year-old. Older enrollees can still be charged far more, says insurance expert and broker Louise Norris.
Plus, networks and coverage can always change, notes Paul Rooney, vice president of carrier relations for online broker e-health.com. So even if you’ve been happy with your plan, you still need to check that it meets your needs.
To see if you can get a better deal on your coverage, follow these steps.
Narrow the network
Initially, most exchange plans were preferred provider networks, or PPOs, which give enrollees the greatest flexibility to use both in- and out-of-network doctors without a referral.
Now, more providers have shifted to HMOs (health maintenance organizations) or EPOs (exclusive provider organizations), says Rooney, which tend to have lower premiums than PPOs. The downside: You’ll have to coordinate all of your care through your primary physician, and you’ll have no coverage for out-of-network health services.
If you’re considering an HMO or EPO, first check that the doctors you rely on take that specific plan. Not every provider accepts all versions of every plan.
Check the drug coverage
About a quarter of all American adults take four or more prescriptions daily. Some plans fully cover generic, but not branded drugs; others charge a sliding co-pay for both.
Many do not pay for highly specialized drugs, such as those used in cancer treatment. Regardless, if you take several medications daily, the extra costs can quickly add up.
Your most critical move to make sure you don’t end up with a big out-of-pocket bill: Determine whether your medications are covered under specific plans before you sign up, using a tool such as the calculator at HealthPartners.com.
Consider a different metal level
Exchange-based health plans are divided into tiers—bronze, silver and gold—which have different levels of costs and coverage. Premium hikes and cost-sharing subsidies for lower-income enrollees are based on the costs of the mid-level silver plans, by far the most popular option.
To qualify for a subsidy, your income must be between 100% and 400% of the poverty level (up to $48,560 for individuals and $100,400 for a family of four). In addition, if your income is between 100% to 250% of the poverty level, you may qualify for help with out-of-pocket medical costs—but only if you enroll in a silver plan.
That’s why silver plans are typically the best option for lower-income consumers who qualify for the subsidy.
But if you don’t qualify, you may be better off picking a plan other than silver, says Norris. That’s because, due to changes in how insurers are reimbursed for cost breaks for lower-income enrollees, silver plans can actually end up being more expensive than other metal levels for anyone paying full freight.
Bronze plans cost less up front, but there’s a trade-off. Out-of-pocket expenses will be much greater if you become seriously ill or injured. Bronze plans not only have higher deductibles, but also higher copays.
You’ll also likely have to pick up the tab for a percentage of the cost of each office visit, a practice known as co-insurance.
Gold and platinum plans cost more up front, but cover more expenses and have lower deductibles.
If you visit the doctor often, say for a chronic condition like diabetes, it makes sense to consider total annual costs, not just monthly expenses, before selecting a plan. Sketch out what you can expect in claims during the year and then add up the premiums and out-of-pocket costs for the various plans you’re considering, says Norris.
Depending on what state you live in, you also may get a better deal shopping for coverage outside of the exchange. So it’s also worth comparing costs if off-exchange plans are available in your market.
Look (warily) at short-term plans
So-called short-term plans generally offer bare-bones coverage compared to the metal-level plans, and some have serious coverage gaps. That said, if you need a temporary bridge—say, you’re between jobs and expect to land a position with employer health coverage fairly soon—these policies can be a substantially cheaper option.
According to a new study from the Kaiser Family Foundation, short-term plans are able to charge 54% less than plans that offer all the benefits mandated under the ACA, primarily by excluding coverage for pre-existing conditions and restricting benefits. They are not available through healthcare.gov or state-run exchanges.
Despite the name, these plans are not really short-term anymore: The rules for these non-ACA compliant alternatives were recently modified to allow for up to 364 days of coverage, and coverage is renewable for up to three years.
These plans place significant restrictions on various services covered, according to a Kaiser Family Foundation analysis. Applicants with pre-existing health conditions can be turned down for coverage or charged higher premiums, based on health status—including how old you are.
Short-term plans don’t have to cover essential benefits like preventive care, prescription drugs, mental health care, chronic disease management or other care mandated under the ACA. Some states, like California and New York, simply don’t allow them.
If you’re considering this option, check the fine print to make sure the plan will at least cover your essential needs.
Get help with shopping
Overwhelmed? Don’t expect much help from Uncle Sam. The budget for government insurance counselors who help consumers with the process has been cut by 80% this year.
Still, you don’t have to go it alone. It may make sense to work a broker, who can help find the best coverage options. Brokers don’t charge a fee, and plans cost the same whether you purchase them through your state or federal exchange, directly through an insurer, or via a broker. You can find a broker in your area at HealthCare.gov.
“The dynamics of this market can be challenging, but there is help out there,” says Rooney, “Just remember—any coverage is better than none at all.”