Open Enrollment November 1 - December 15, 2019

More Than Cost: What to Consider When Buying Health Insurance

If you’re looking for the best type of health insurance in 2019, consider more than the cost at face value. Competing plans may seem alike, but the fine print will show how much an insurer covers for things like hospitalization, prescription drugs and lab work. When it comes to the real cost of health insurance, you may be faced will bills topping five figures or more even with coverage. Look beyond the premium price to see what a plan truly covers – and what your responsibility as a subscriber will be.

The Affordable Care Act (ACA or Obamacare) has been a boon for many people who might otherwise not be able to afford health insurance. It requires some research, though, to figure out the plan that works best for you. Costs will vary widely among plans, even plans offered by the same insurer in the same area. Obamacare requires all major medical policies to cover a set of the same types of services, but not all health plans treat this coverage the same. The premium is only one part of the cost. Copays, deductibles, coinsurance and out-of-pocket caps should also be considered when buying health insurance.

10 Essential ACA Benefits

Major medical plans today must cover 10 essential health benefits as mandated by law. These are types of services. The law doesn’t specify the degree to which a plan must cover the benefits, either, so one plan might require you to pay more for services like physical therapy while another limits prescription drug coverage. Nevertheless, every ACA-compliant plan bought on or off the exchanges will cover the following types of care:

  • Outpatient services
  • Emergency room care
  • Hospitalization
  • Maternity benefits
  • Mental health services
  • Prescription drugs
  • Rehabilitative care and equipment
  • Laboratory costs
  • Preventive care, including screenings and immunizations
  • Pediatric care, as well as pediatric dental and vision care

As you might imagine (and might have noticed), covering all of these services means that health insurance plans today cost more than they used to. Comprehensive benefits help you take care of yourself, but they also make insurance more expensive.

Network Plans

Some health plans rely on networks to keep costs low for subscribers. Health maintenance organizations (HMOs) usually only cover providers that participate in the plan’s network unless it’s an emergency. Preferred provider organizations (PPOs) typically cover both in- and out-of-network care, but non-network care is covered at a lower rate, meaning you’ll have higher costs if you see providers outside the plan’s network.  

Choosing healthcare coverage offered within a network can help with the cost of insurance. Insurers rely on a large market of healthcare consumers participating in the plan. This allows them to negotiate lower physician, hospital and prescription drug prices based on volume. That’s why network providers will rely on capturing a large share of the healthcare marketplace in 2019 to reduce costs. It’s also one of the reasons that an insurer can provide primary care and major medical coverage at reasonable rates.

What About Seeing a Specialist?

Some insurers hold down costs by requiring a referral from a primary care physician before a patient can get an appointment with a specialist. In general, any plan that allows the patient to visit specialists without a referral will require a higher premium. In some cases, it may be worth the savings in premium and copay costs to opt for a managed plan that requires referrals.

This is one of those important details of a health insurance plan that should be considered on an individual basis. Most people rely on their family physician the majority of the time. But for those with chronic conditions, the ability to see a specialist without a referral may be a vital feature of a health insurance plan. If the cost of the insurance is within the family budget, unfettered access to specialists can be an important benefit that’s worth the extra cost per month.

ACA Cost Assistance

Obamacare has built-in discounts for people who qualify based on income, one of those being advance premium tax credits, also called subsidies. If you earn between 100 and 400 percent of the federal poverty level (FPL), you can get a subsidy to reduce your monthly premium. About 80 percent of people who buy plans on an Obamacare marketplace qualify for advance premium tax credits.

For those who qualify for additional assistance, the ACA cost-sharing reduction (CSR) lowers the cost of health insurance deductibles, copays and coinsurance. Over half of those enrolled in a HealthCare.gov plan receive CSRs, which require enrollment in a silver-level plan. You must earn between 100 and 250 percent of the FPL to qualify. These reductions are available alongside the subsidies, so you can get both if you’re eligible.

Funding Problems

Obamacare has been a game of political football since it became law, escalating more quickly since President Trump took office. You might worry that the ACA’s built-in discounts will be discontinued. Given the conflicting news stories surrounding cost-sharing reduction payments and everything else related to healthcare policy, it’s not surprising that lots of people have lots of questions about where health insurance stands at the moment. In short, it stands where it has since 2010: The ACA is still law.

There have been some important changes, though. While insurers are still required by law to offer cost-sharing reductions to people who qualify for them, the federal government stopped reimbursing insurers for these payments in October 2017. Since insurers now carry the full brunt of reducing costs to consumers, they’ve raised premiums as a result. Silver-level plans got hit hardest since these plans form the benchmark for federal subsidies.  

Higher premium prices really only affect people who don’t qualify for cost assistance since that assistance increases with the price tag of marketplace health plans. For people who don’t get subsidies, though, these price hikes can be devastating.

We should note that families with an income too high to qualify for subsidies may have access to off-exchange silver plans at a lower price. Some insurers have opted to provide the same benefits and protections under ACA-compliant off-exchange plans, but without the increased premiums that reflect the cost-sharing burden.

ACA-Compliant Plans

When looking for health insurance outside of the ACA exchange, know that you can buy major medical coverage that meets the demands of the law and gives you comprehensive benefits. Off-exchange health insurance includes major medical coverage, and it provides the same benefits and protections as on-exchange plans. The difference is that off-exchange health insurance is purchased directly from an insurance company, via a broker or insurer, or through an independent marketplace like this one rather than through a state or federal exchange.

Unless an insurance plan is ACA-compliant, there’s no guarantee that it covers every healthcare need. All major medical plans are now required to conform to ACA guidelines, but some plans – like short term health insurance – don’t count as major medical insurance and don’t fall under that umbrella. In this case, it’s especially important to look at all of the costs of an insurance plan and to read the details about exactly what’s covered.

When scouting for health insurance in 2019, make sure that any plans you consider cover the services that matter to you. A good place to start is the list of 10 essential benefits provided by the Affordable Care Act and to determine whether a health plan you’re considering complies with the law. Beyond the face value of the health plan, look at how it handles your regular out-of-pocket expenses so you don’t get stuck with coverage that doesn’t really cover your needs.

Get started by comparing plan pricing with a personalized health insurance quote.