With open enrollment beginning on November 1st, millions of Americans will be looking for new healthcare plans.
While it’s possible to buy good healthcare that’s not on the US Government’s healthcare exchange, we recommend buying healthcare on the ACA healthcare marketplace to avoid the risk of getting “Fake Health Insurance” (which is health insurance that looks great until it comes time to pay for actual medical services and then throws every excuse in the book at you for why they aren’t responsible. At resolve, we deal with this all the time).
However, even plans on the ACA are incredibly confusing – from deductibles and co-pays to in-network and out of network coverage, there’s a lot to think about. We wrote the Top 10 Key Health Insurance Terms as a primer.
And while there are certain things that are always included when buying an ACA certified health plan (such as no pre-existing condition exclusions, coverage for preventative care, and covering emergency out of network care as if it were in network), there are still a ton of decisions that need to be made.
Below are the 6 things to look for when selecting a health insurance plan on the ACA marketplace.
1. Hospitals and Doctors that are In-Network
The first thing to look for is to check to ensure that your local doctor and nearby hospitals are in-network. All plans on the marketplace will list the medical providers who are network – and you can always call your doctor’s office directly to confirm that they’re in network for a particular plan.
While all insurance companies must treat out of network care as in-network for purposes of paying coverage, it’s still smart to ensure that hospitals near where you live are in-network (it doesn’t have to be all of them, but some of them should be).
First off, if you have to go to the hospital for a non-emergency procedure, it can be an incredible pain to drive hundreds of miles to an in-network hospital.
Second – even though insurance companies must treat emergency care as in-network at all times, you can still get stuck with a huge bill for out of network emergency care. Hospitals charge uninsured and out of network patients on average over 3x what they charge insurance companies and in many states you could be stuck holding the bill for the difference between what your insurance company paid and what the hospital is trying to charge.
2. Your Out of Pocket Maximum
Things like deductibles, co-insuranace, and co-pays are all things that you as the patient are responsible for paying (again check out the 10 Insurance Terms to Know to better understand what these mean) and could have a huge effect on how much you have to pay out of pocket.
However, at the end of the day you also need to dig into your out of pocket maximum for the year – as this represents the maximum amount you have to pay for healthcare for the year before your insurance kicks in and covers everything 100%.
Put another way – you could still be liable for healthcare costs all the way up to your out of pocket maximum in a given year (in addition to the amount that you pay for premiums).
Again – as a reminder, you are responsible for all healthcare costs up to your deductible amount. After you have enough healthcare costs to hit your deductible, coinsurance kicks in. Here the insurance company will pay a portion of your additional healthcare costs, while you still have to cover the rest (this can be as much as 90% the insurance company and 10% you to as little as 50% the insurance company and 50% you). Only after your out of pocket maximum is hit will your insurance company cover all healthcare costs.
3. Monthly Premiums
We almost didn’t include this since this is one of the most prominent and looked at numbers on the healthcare exchange. Your monthly premium is the amount you’ll pay each month for your health insurance.
Usually health insurance with lower premiums will provide less care – in the form of smaller networks, higher deductibles/coinsurance/out-of-pocket maximums, among other items.
Make sure that you can afford your monthly premium in your monthly budget.
4. Prescription Drug Coverage
If you currently take prescribed medicines, this is extremely important. You need to check to ensure that the health insurance that you’re purchasing actually covers the drugs that you’ve been prescribed AND understand what your co-pay portion will be.
This can be a little difficult, as every health insurance company will have a different ‘formulary’ showing what’s prescribed, what the cost is, and how much of the cost they cover.
In addition, there might be other requirements to getting your drug covered. For example, some insurance companies will only cover generic drugs instead of brand name drugs. This isn’t necessarily a bad thing – as many generics are exactly the same as brand name drugs at a lower cost. However, if you’ve tried a generic already and it hasn’t worked as well as a brand name drug – you’ll want to make sure that your insurance company will cover the brand name drug.
5. HSA eligibility
An HSA, or Health Savings Account, can be a great way to save money for healthcare costs. HSAs allow you to put tax-free dollars into a savings account (that is you’ll get a tax deduction at the end of the year for the amount you contribute) to spend on healthcare.
This money can only be spent on approved healthcare purchases – but this can range from doctor’s visits and hospital bills to things like contact lense solution.
In order for a health insurance plan to be HSA eligible it must be a High Deductible Healthcare Plan (that is a plan that only contributes to preventative care upfront and in 2019 has a deductible of at least $3,500 for an individual or $7,000 for a family).
It’s important to note that depending on your situation, it may be better to enroll in a plan that has a much lower deductible, in which case you won’t be eligible for an HSA (which is perfectly okay).
However, if you do elect to use a high deductible plan, it’s always a good idea to check if its HSA-eligible.
6. Coverage for out of network care
While marketplace health insurance plans may be required to cover out of network emergency care – you may want to go out of network for other types of healthcare (at Resolve we see issues with this all the time).
HMO type plans will only cover in-network care, while PPO plans may cover some percentage of out of network care (though you may still be left holding a large part of the bill if you go out of network). These PPO plans will specify a price that they will pay for out of network care (usually as a percentage of the average list price for care in a region). This can provide you with some level of comfort should you decide to seek out of network care.
Note – that even if your health insurance plan pays for out of network care, depending on the state, the medical provider you went to may try to charge you even more. In some instances its possible to work with the medical provider to convince them to lower the amount you owe, but it’s not always guaranteed.
Braden founded Resolve after experiencing first hand how unfair the system is for patients. Prior to Resolve, he built and ran Operations for a renewable energy company and then built and ran Product, Growth, and Operations for a VC-funded edtech company. He received his MBA from Dartmouth’s Tuck School of Business and BA in Philosophy from the College of William and Mary. When not trying to lower healthcare costs he can be found outdoors mountain biking, skiing, or hiking with his dog.