Health insurance is a key part of your financial wellness, but nearly half of Americans do not get insurance coverage through work. If you are one of the 44% who has to get healthcare on your own, the process can be a bit confusing.
Below is a quick breakdown of how it works and what you should know about the Affordable Care Act before you choose your health coverage for 2017 open enrollment.
Affordable Care Act Marketplaces
The Affordable Care Act is legislation signed by President Obama on March 23, 2010, that made historic changes in the availability and delivery of health insurance, Medicaid, and health policy nationwide. It is commonly referred to as the health reform law, Patient Protection and Affordable Care Act (PPACA), and Obamacare. While the changes were wide-ranging, here are some of the most important points that impact you:
- All Americans are required to have healthcare coverage or pay a tax penalty unless they meet specific exemptions.
- Large employers are required to provide healthcare coverage to employees that meet a minimum standard set by the Affordable Care Act.
- Healthcare plans must include the new consumer protections. Health insurers can no longer deny or refuse to renew coverage because of a pre-existing condition. They also cant charge a higher premium due to a persons gender or health condition.
- Health insurance coverage must be purchased during an annual enrollment period or immediately after certain qualifying events.
- The establishment of state and local marketplaces where insurance carriers list the plan benefits and costs.
- Individuals and families who need help affording coverage may have access to financial assistance when they shop in the new health insurance exchanges.
- Insurers cant deny coverage because of a pre-existing condition.
While it is essentially required to have health insurance, you cant just signup 24 hours a day, seven days a week. You can only secure your healthcare coverage during the open enrollment period or after a qualifying life event. Lets dig a little deeper to see how those work.
How the Open Enrollment Period Works
Open enrollment is a three-month period where you can sign up for health insurance for the next year. The window opens November 1st and closes on January 31st for following calendar year. For example, for 2017 health insurance plans, open enrollment runs from November 1, 2016, to January 31, 2017. If you work for a large company and get coverage through your employer, your open enrollment period may be different, so check with your companys human resources department to learn more about how the open enrollment period works for them.
Dont procrastinate, as its best to enroll at the beginning of open enrollment so you dont forget and end up with no health insurance. Once you sign up, you are covered until the next years open enrollment period when you will have the opportunity to continue with the same insurance plan (if it is offered) or change to a different coverage plan.
Qualifying Life Event for Enrollment Outside of Open Enrollment
If you missed open enrollment, you are not completely out of luck. You may qualify for a special enrollment period if you had a qualifying life event, or QLE, such as:
- Loss of existing health coverage – This is most common when changing employers or losing eligibility for Medicare or Medicaid.
- Changes in household size – This includes getting married, having a baby or adopting divorce, or death.
- Moving to a new zip code or county – Moving to a new state or across town commonly trigger a special enrollment period.
There are some other less-common special enrollment periods for American Indians in Alaska, service through AmeriCorps, becoming a new United States citizen, or if youve recently been released from incarceration.
Assess Your Needs — Bronze, Silver, Gold, or Platinum Health Plans
Everyone is different, therefore health care needs are unique, so keep in mind that one size does not fit all. For this reason, you can find tiered insurance offerings in the state or Federal exchange where you sign up for healthcare coverage.
Plans are broken down by cost in one of four categories: bronze, silver, gold, and platinum. Bronze plans cost less per month but have a higher cost when you need care. Platinum plans have the highest monthly cost, but also the lowest cost when you visit a care provider.
To make the best decision, look at your average spending on healthcare over the prior year and your expected spending the next year. People who have common medical needs and see the doctor regularly get the best savings through gold or platinum plans, while people who are generally healthy and dont visit the doctor as often do best with bronze or silver plans.
Within those four cost categories, you will find a handful of options for different types of healthcare plans. Those are Exclusive Provider Organization (EPO), Health Maintenance Organization (HMO), Point of Service (POS), and Preferred Provider Organization (PPO).
- EPO Plan: Subscribers are required to only see doctors and visit hospitals in the insurers approved network outside of emergencies. Outside of the network, you pay 100% of all costs out of pocket.
- HMO Plan: Your doctor is typically an employee of your insurance company, and you can only go to facilities approved by your insurer. Kaiser Permanente is a well-known example of an HMO.
- POS Plan: You have to see your doctor first for a referral before seeing a specialist or visiting a hospital. You can see any doctor you choose, but pay the least if you visit an in-network doctor.
- PPO Plan: You can choose any doctor at any time. You pay less if you choose providers in the plans network, and pay more for doctors outside of the network.
Pick the Healthcare Plan Best for Your Family
Just like with term life insurance, you have more people to worry about than just yourself. Health insurance saves you from paying an extra tax and saves you a lot of money in case someone in your family gets sick or injured. Make the right decision, and protect yourself and your family from bad health care or financial hardship due to poor or no insurance coverage.
When open enrollment comes around, pick a great healthcare plan for your entire family.