Health insurance is no joke. By law, you are required to carry it. This seems scary, especially since premiums are so expensive, and only going higher. But health insurance is an incredible asset that everyone should have, even if mandates require you buy health insurance on the marketplace.
In this special episode, brought to you by the world’s top insurance marketplace PolicyGenius, I interview PolicyGenius co-founder and CEO Jennifer Fitzgerald about everything you need to know about buying health insurance during this open enrollment season. With deadlines coming up quickly, including one in just over 2-weeks on Dec. 15. This will be your last chance to get coverage for you and your family by Jan. 1, 2017 and avoid potential fees so read on.
How to buy health insurance on the marketplace
If Obamacare is really repealed in the next few months, what happens next?
No real changes can happen for at least one year, if not until 2018, and 2017 prices and plans are locked. The health insurance code is thousands of pages that slow down any potential changes.
What are the most important benefits I should look for when selecting a health insurance plan this year?
This depends on what is most important to you: Affordable monthly premiums, maintaining your current doctors or the total deductibles, including co-pays for office visits and prescriptions. PolicyGenius helps navigate these priorities over available policies.
Unfortunately, you’re not going to get everything you want out of this purchase upfront, so face that fact head on then put your research fingers to work. You’ll find big savings opportunities by tailoring your policy decision this year to your plan usage last year and any special health considerations you have in mind for this year. For example, if you have a surgery coming up this year or you’re planning to grow your family, dig into plans before you purchase to verify location of network doctors and specialists you’ll need and any additional costs that may come with these visits.
The Bronze plan is so expensive, and has such poor coverage. Why can’t I just skip insurance all together?
It is the law that you maintain coverage, and you will be fined if you do not purchase it.
As Jennifer Fitzgerald points out, the benefits to health insurance are huge, and the most an individual must pay out of pocket (in addition to premiums), is $6,500 for an individual, or $13,000 for a family — no matter how expensive your medical bills in the event of an accident or major illness. Fitzgerald shares about a 29-year-old client who had $1 million in medical debt from a motorcycle accident because he didn’t have health insurance. People: Buy health insurance.
More questions are answered in this interview with PolicyGenius CEO Jennifer Fitzgerald:
I’m going to the health insurance marketplace for the first time, and am completely overwhelmed. Where do I start?!
PolicyGenius is the largest marketplace for health insurance, including information about subsidies, which can reduce premiums to $75 per month for qualifying consumers.
First, check to see if you qualify for a tax subsidy.
In all states, you can qualify for a health insurance subsidy if your household income is up to 400 percent of the poverty level. For plans purchased during the 2017 open enrollment period, that upper subsidy threshold is $97,200 per year for a family of four, or $47,520 for single people. Last year, 2 million consumers who qualified for an Obamacare subsidy did not apply. Free money, people! Take it! Check here to learn if you are qualified for an Affordable Care Act health insurance subsidy.
Then, decide which is most important to you: out-of-pocket monthly premiums, the ability to stay with your current provider, or total deductions. Do your research to understand and tailor your plan to your needs.
Americans typically spend 5% of their annual salary on health insurance per year so it’s worth the extra time to get this right. Jennifer’s company PolicyGenius developed their health insurance app with the end customer in mind, so education and advice are built into the process. It’s a great example of how a self-guided process can actually help you save time and money while giving you the tools you need to find the ideal plan for your individual needs.
I’d love to start my own business, and build on my side gig, but I’m afraid that health insurance on the marketplace will break me. I currently get great coverage for my family from my corporate employer.
This is all about your own risk tolerance, but first do your research: Go to the marketplace and research your options. This year may be your last year to take advantage of the ACA subsidies that will help you bring healthcare costs down, especially since your first years of entrepreneurship may come with lower income. Then, ask your tax preparer if you can take your health insurance premiums as a deduction.
Most importantly, know how you’re going to use your plan before making the purchase. If you buy a low-cost, high-deductible plan as many do in an effort to save cash upfront, you could easily end up paying more than double your plan’s initial costs.
Consider the financial upside of owning your own enterprise, and health insurance is just one part of a very large equation of business ownership.
What kind of help is there for low-income families?
The Affordable Care Act comes with several options to help families pay for health insurance:
- Health insurance subsidies, which extend to households earning up to 400 percent the poverty level. See if you qualify here.
- Cost Sharing Reduction, for those earning 100 percent 250 percent the poverty level, these plans have reduced premiums, co-pays and deductions. See if you qualify here.
- Medicaid is free health insurance, and most states expanded their qualifications to 138 percent federal poverty line. See if you qualify for Medicaid here.
What about separated families? I have four kids, my ex-husband and I each claim two on our tax returns. As-is, neither of us qualify for a subsidy, and we each have to buy a health insurance family plan on the marketplace. Help!
There is no easy answer here. Take time to try different scenarios with this health insurance subsidy calculator. For example, see if it would make sense for the lower-income parent to cover all four, or three of the kids, compared with the tax benefits of doing the same. Or take turns claiming the kids on your returns and paying for health insurance, then switching the following year. A tax professional can help you do these calculations.
What open enrollment deadlines should I be on the lookout for?
To qualify for a plan that goes into effect Jan. 1, 2017, the deadline to lock in a plan is Dec. 15, 2016.
To qualify for a plan that goes into effect Feb. 1, 2017, the deadline to lock in a plan is Jan. 15, 2017.
The final deadline for 2017 coverage is Jan. 31, 2017, for which coverage goes into effect March 1, 2017.
Exceptions to these dates include qualifying events, including:
- Losing existing health coverage, including job-based, individual, and student plans
- Losing eligibility for Medicare, Medicaid, or CHIP
- Turning 26 and losing coverage through a parent’s plan
- Getting married or divorced
- Having a baby or adopting a child
- Death in the family that changes your eligibility
- Moving to a different ZIP code or county
- Changes in your income that affect the coverage you qualify for
- Gaining membership in a federally recognized tribe or status as an Alaska Native Claims Settlement Act (ANCSA) Corporation shareholder
- Becoming a U.S. citizen
- Leaving incarceration (jail or prison)
- AmeriCorps members starting or ending their service
This post about HEALTH INSURANCE is brought to you by PolicyGenius, the world’s top marketplace for life, health, disability, pet and renter’s insurance. This Like a Mother episode features PolicyGenius CEO and co-founder Jennifer Fitzgerald, who will answer all your questions about this ever-challenging benefit. PolicyGenius is dedicated to empowering consumers with the insurance information and comparison tools they need to feel good about the insurance they purchase. To learn more, and find the right health insurance policy for your family, head to PolicyGenius.com/health-insurance.