Open enrollment for health insurance ends today, December 15, for the health insurance marketplaces under the Affordable Care Act (it ended for Medicare on December 7). After today, you’ll only be able to enroll or change plans if you qualify for a Special Enrollment Period.
When it’s time to renew my family’s health insurance plan each year, I dig through pages of options with different premiums, deductibles, co-pays, out-of-pocket maximums and exclusions. I know it’s important to pick the right plan. Health insurance is a big expense for our household, even though my husband’s employer subsidizes a lot of the cost. It’s overwhelming to sift through all the data, though, and I usually end up picking the same plan we had the year before.
Turns out, that’s a mistake. “You should be paying close attention and treating this like the big-dollar decision it is,” Greg Klingler, director of wealth management at Government Employees’ Benefit Association, told TODAY. “You can cherry-pick the plan that’s right for you in 2021 with the knowledge you have at your disposal today. You could save hundreds or thousands of dollars.”
For many of us, now is the time to make that smart decision. And the pandemic adds another layer of factors to consider as you make your health insurance plan decision. Will your insurance cover testing and treatment for COVID-19? Testing is generally covered. If you need hospital care for COVID-19, though, you’ll likely face co-pays and deductibles. So, if you’re at high risk for contracting COVID-19 or for complications, you’ll want to take a close look at hospital coverage.
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How to choose the health insurance plan that’s right for you
Klingler says to choose which health insurance is best, you want to narrow your options. Start by eliminating plans your doctors don’t accept. “That will narrow down the field quite a bit,” he said.
Next, evaluate your needs. What did you and your family spend on health insurance last year? Do you need a plan that includes dental insurance or vision insurance? Do you anticipate any major changes? Of course, you can’t predict whether you’ll be in an accident or get a serious illness. But maybe you plan to grow your family. Or you know you’ll need routine care for diabetes. Or you're considering a joint replacement. Be sure to factor those known expenses into your decision.
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Generally, higher monthly premiums mean you’ll pay lower out-of-pocket costs throughout the year. But that doesn’t mean the plan with the priciest premiums is the best one. “The most expensive plan may not be the most efficient use of your money,” Klingler said.
You’ll want to weigh what you pay in:
- Monthly premiums — the amount you pay each month for the health insurance
- Insurance deductibles — the amount you pay before your plan starts to cover costs
- Co-pays or co-insurance — the amount you pay after you’ve paid your deductible (for example, you may pay $25 for a doctor’s visit and your insurance might cover the rest)
- Out-of-pocket maximums — Medical out-of-pocket expenses for deductibles and co-pays can add up. Once you pay the out-of-pocket maximum in a year, your insurance pays for the rest of your covered expenses
If you’re choosing a plan through the Affordable Care Act (ACA), you can start at HealthCare.gov. From there you can connect with the affordable health insurance options offered in your state.
What are the different levels of ACA health insurance?
Plans come in four categories: the ACA bronze plan, ACA silver plan, ACA gold plan and ACA platinum plan.
Bronze plans have the lowest monthly premiums and the highest costs when you need care. They are a lower-cost way to cover yourself in worst-case scenarios. You’ll pay for most routine care yourself. Platinum plans have the highest monthly premiums and the lowest costs when you need care. They could be a good choice if you need a lot of health care. Silver and gold plans fall between bronze and platinum plans.
You’ll also see plans offered in the health care marketplace in different types of networks:
- Preferred Provider Organizations (PPOs), where you have access to in-network and out-of-network care (you pay more for out-of-network care)
- Health Maintenance Organizations (HMOs), where your primary care doctor refers you to specialists and facilities in the HMO network (there’s no coverage for out-of-network care)
- Point of Service Plans (POS), where your primary care doctor refers you to specialists, but you can access out-of-network care for a higher price
- Exclusive Provider Organizations (EPOs), where you can only get care in-network, but you don’t need a referral to see a specialist
How to find ways to save money on your health insurance
If you meet the income requirements, you can qualify for a premium tax credit to help cover your health insurance premium costs. You can also check your Medicaid eligibility. If you choose a high-deductible health plan (HDHP), you can set aside money for health expenses in a health savings account (HSA).
It’s a lot to dig through and evaluate. If you don’t feel comfortable doing it on your own, you can work with an agent who can help you navigate through your options and make your choice. Agents specialize in the needs of groups of people. “Some do nothing but senior planning, some do individual, some do employer-based. Find a specialist for the needs you have to help you walk through it,” Dane Rianhard, president of the National Association of Health Underwriters, told TODAY.
What to do if you lose your health insurance
Nearly half of U.S. workers get health insurance through their jobs. But 14.6 million people — employees and their dependents — have lost their jobs and their health insurance during the pandemic. If you’ve lost your job and need to find health insurance, you have a few things to consider.
You can probably use COBRA (Consolidated Omnibus Budget Reconciliation Act) to continue your employer-based health insurance for a while. COBRA insurance can carry you over until open enrollment, when you can find a plan that fits your needs.
Most employers subsidize the cost of health insurance premiums for their employees. With COBRA, you pay the full amount of the premiums. So, you’ll likely see a big jump in that expense. For example, if your premium costs $500 per month and your company covers 80%, you paid $100 per month. Your company covered the remaining $400. With COBRA you’ll pay the full $500, and maybe even a small administrative expense.
Keep these points in mind as you evaluate your options:
- You might meet Medicaid qualifying income requirements if your job loss puts you in a low-income category, or if you have a disability
- If you’re 65 or older, you may qualify for Medicare (more on that later)
- If your spouse’s company offers employer insurance, you might be able to get coverage through that plan
- If you’re a veteran, check veterans’ health care eligibility through the Veteran’s Administration (VA)
- You might save money if you choose different plans for yourself and your family members
- If you have children with medical problems, they might be eligible for Children’s Health Insurance Protection (CHIP)
As you look for a new job, evaluate the health insurance options the prospective employers offer. What they cost and what they cover are important parts of your overall compensation.
Here’s what you need to know if you have a chronic condition
What is considered a pre-existing medical condition? In the past, if you had a health condition like asthma, diabetes or cancer, insurance companies could charge you more or refuse to cover you. That’s not the case anymore. Health insurance plans offered under the ACA Marketplace, Medicaid and CHIP must cover treatment for pre-existing conditions and can’t raise your rates based only on your health. “The great thing with most plans with employers and the exchange is that you’re pretty much guaranteed acceptance,” Klingler said.
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But if you need a lot of health care, your costs can add up, so it’s important to estimate your expenses and pick the plan that meets your needs best. Rianhard told TODAY that he has a family member with multiple sclerosis whose health insurance covers $8,000 to $9,000 in medication expenses. “He doesn’t mind paying for the best plan because he’s getting so much more out of it,” Rianhard said.
As you compare plans and calculate costs, make sure look for a plan that will cover:
- Your doctors
- The services you need
- Your medications
If you expect you might need specialized care, evaluate what coverage is available for out-of-network doctors and services. “If you have chronic conditions, it’s probably worthwhile to choose a more comprehensive plan,” Klingler said.
Turning 65? Here’s how to find the right Medicare plan
What is Medicare? It’s the federal health insurance program for people age 65 and older. When you turn 65, you’re eligible for Medicare. And that means you’re faced with a lot of decisions. Medicare comes in four parts: Medicare part A, Medicare part B, Medicare part C and Medicare part D.
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What does Medicare actually cover? Each part covers different aspects of your health care. Some parts are priced based on your income. And some charge a penalty later if you don’t enroll when you’re eligible. If you’re still working, you’ll want to factor the health insurance you get from your employer into your decision.
Does your doctor accept Medicare? Like with other health insurance products, you’ll want to make sure your doctors, services and medications are covered. Medicare benefits are complex, and if you’re enrolling for the first time, you might want to work with an agent to help you evaluate the options. “It’s confusing to navigate for sure,” Rianhard said. “I wouldn’t want to try to TurboTax my way through the Medicare maze.”