Whether you’re in good health naturally or you rely on medication and specialists to stay that way, finding the right health insurance plan is key—and you could pay a penalty if you don’t have it.
If you’re self-employed, your employer doesn’t offer health insurance, or even if you simply think you might be better off on a different plan than what your employer offers, you may find yourself buying individual health insurance. While shopping for your own health insurance may seem daunting, breaking down the plans can help you make a more informed decision.
“People need to be careful when comparing plans,” says Joel Cantor, director of the Center for State Health Policy at Rutgers University. “People tend to make the mistake of looking at the premium only and not cost-sharing. It’s a little more of a complicated calculation.”
Some individual plans may leave more money in your pocket than others, even though at first blush they may not look that way.
For example, if your employer does not offer health care coverage, you may qualify for tax credits and other subsidies in an individual plan, making your costs lower. Though less likely, you may be at an age and state of health where you can buy an individual plan that is less expensive than the one your employer offers.
If you are employed you are likely paying only 15 to 20 percent of the premium, says Paul Fronstin, director, health research and education program at Employee Benefit Research Institute in Washington, D.C.
“Premiums in the non-group [individual] market are age rated, and the younger you are, the lower the cost. But it still might be more than your work,” Fronstin says.
For those with health concerns, some individual plans may also offer more value than others, or even more than an employer-offered plan. These may allow you to find the right network, specialists, and prescription coverage for your needs.
Bear in mind, however, that you have to be on your toes when it comes to finding a healthcare plan that will really offer valuable savings, because plans and their costs change frequently.
The Kaiser Family Foundation, a health policy nonprofit, released an analysis in June 2015, projecting changes to premiums in the individual marketplace in 2016. The report found the most popular individual plans are increasing on average 4.4 percent from 2015 to 2016, which they said is moderate but a bigger jump in price from the previous year. The report stresses the value in shopping at each open enrollment period, as premiums fluctuate.
Open enrollment for 2016 begins Nov. 1, 2015 and extends to Jan. 31, 2016. It’s always worth considering all options, especially where your health and budget are concerned. Here are some things to consider when evaluating the pros and cons.
1. Your medical needs: Make a list of any doctors, specialists, prescriptions, or other services you require to maintain your health or to prevent health issues.
2. Your budget: Figure out how your budget will allow you to spend on health insurance and health care each month.
3. Premiums + network + cost sharing: Check the premiums, network, and cost-sharing specifics of each plan. Cost sharing includes deductibles, co-pays, and coinsurance. Compare not only the premiums, but also whether all your anticipated medical costs are covered in-network or if you will have to pay for out-of-network to see your preferred doctors. Evaluate all of these costs to determine if there is a better savings (monetary) or value (more affordable access to your required specialists and prescriptions) in one plan vs. the other.
4. State vs. federal coverage: Keep in mind that in most states, individual coverage is federally managed, while in a handful of others, it’s managed at the state level or some kind of hybrid between the two. If applicable, evaluate any benefits in your state’s coverage. For example, some coverage that may vary includes birth control, breastfeeding, dental and vision.
5. Tax credits and other savings qualifications: Determine whether you qualify for tax credits and other savings offered in the state marketplace. This will be an important factor in determining whether an individual plan makes more sense for you, cost-wise. According to Healthcare.gov, your employer can tell you if its plan meets the standards of the Affordable Care Act, thereby disqualifying you from any savings on the individual plan.