Need Health Insurance? Look Beyond Sticker Price

Melissa McChesney

Next month marks the beginning of the third open enrollment period, during which Texans can purchase insurance from Healthcare.gov, the Health Insurance Marketplace created by the Affordable Care Act.

In this edition of the Countdown to Coverage 2016 series, we’re exploring questions you should consider when choosing among the many health plans available in the Marketplace. While many consumers may be tempted to purchase the plan with the lowest monthly premium, it’s important to consider other costs.

Will the plan pay for visits to my current doctor?

If you already have a primary care physician or other doctors that you would like to continue to see, you should confirm that your doctor is listed as an “in-network” provider in the health plan’s provider directory. Healthcare.gov will have a link to the plan’s provider directory. You should also call your doctor’s office to confirm. Services provided by out-of-network doctors may only be partially covered by the plan, or in some plan types they may not be covered at all.

What type of plan works best for you?

There are four different types of plans in the Marketplace, and each type of plan may charge you differently when you visit a provider who is not in the plan’s provider network. For complete details about each of the different types of health plans, please visit the links below:

What out-of-pocket costs should I consider?

When purchasing a plan, consumers should consider their monthly budget and decide how much they can afford to pay in monthly premiums for healthcare, and whether they are eligible for financial help. However, the premium price is not the only out-of-pocket cost to consider. People should also weigh the deductible, coinsurance and copays that are charged by each plan. Don’t forget to look at the out-of-pocket maximum, as well.

At this point you might be thinking, “Wait, you lost me!” Just click on each of the terms above to get a detailed definition.

This helpful illustration will give you an idea of how all of these pieces fit together:

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So how do I choose?

Let’s work through an example to see how you might go about choosing a plan. For this example, I did a quick search of 2015 plans available in the Austin area for a non-smoker, with a family size of three, and income of 130% of the federal poverty level or $26,720 per year (2016 plans are not yet available to browse).

If I looked at just Bronze-level plans (generally the cheapest), I could find a plan for $0/month after financial help was applied, but the deductible was $6,000 for an individual and $12,700 for a family. That means I would have to pay $6,000 out-of-pocket before my plan paid for almost any healthcare.

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Click to enlarge.

In fact, under Bronze plans, the lowest deductible I could find was $4,000 per individual and $8,000 for the family (this one did include vision, adult dental and 3 free PCP visits, so that’s something).

If I instead looked at Silver-level plans, I could find a Silver plan with a $49/month premium, a $1,000 deductible, a $1,500 out of pocket maximum, and copays for primary care and specialist visits. If I was willing to pay a bit more at $70, I found plans with no deductible at all and a PCP copay of only $5.

It’s not just that Silver level plans have better cost-sharing. If you choose a Silver level plan and your income is below 250% of the federal poverty level, you can receive “cost-sharing reductions” from the Marketplace that lower your out-of-pocket costs. All of the out-of-pocket costs on the Silver plans described above had cost-sharing reductions applied because my example family had income at 130% of the federal poverty level.

Consumers eligible for cost-sharing reductions can only use them on Silver-level plans, so it’s important to consider this when choosing your plan. It was estimated that as many as 2 million people missed out on cost-sharing assistance in 2015 because they didn’t choose a Silver-level plan.

This is a lot to consider all at once! How do I choose?

Choosing health insurance isn’t easy, especially if it’s your first time. But that’s okay! There are experts in your local community that can help you. To get local help go to the Enroll America Connector or check out my blog post from earlier this year to find people in your local community that can help you enroll in coverage through the Marketplace.

Don’t miss the other posts in our Countdown to Coverage 2016 series.

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