Health Insurance – Know Your Options

A friend was recently notified that her health insurance premiums are going up – a lot. She’s not alone. This is open enrollment season, when mere mortals have to choose between keeping their current insurance coverage – if they are lucky enough to have it – changing coverage options with the same carrier, or changing companies altogether.

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Some people don’t have much of a choice – it you get coverage through your employer, you may be limited to one carrier, with a choice of coverage options – higher deductibles and lower premiums, or lower deductibles but higher premiums.

Since my friend is a self-employed writer, she has to buy individual insurance on the open market. Most freelancers, sole proprietors, and employees that do not get work-related insurance benefits face the same challenge. So what are the options?

With insurance companies racing to hike premiums before several provisions of the Affordable Care Act kick in on January 1, 2011, it’s a question I’m sure that many people are pondering this month.

A good starting point is healthcare.gov and the insurance finder tool. Answering a few basic questions takes respondents to easy to understand information to help sort out their options. After entering some personal information, a number of compatible plans are presented for further investigation.  This tool is fairly comprehensive – it explains plan coverages and benefits in plain language; there is an option to compare several plans side-by-side.

My friend could look around for the least expensive plan by getting quotes from individual carriers and crunching numbers. However, as healthinsurance.org points out, you don’t save money if the plan doesn’t cover the care you need, when you need it. This site is another excellent resource for consumers to learn about options in their particular state, read up on the new law, get familiar with insurance terms, and use the online tools to make informed decisions.

I quickly ran some numbers for myself – three of my premium options were

• $195 per month for a bare bones, basic hospitalization-only plan
• $1,289/month with $0 deductible and $15 office visit co-pays
• $489 per month, with a $2,800 deductible, and 10 percent co-insurance after meeting the deductible.

Confused yet?

An insurance broker can help to lessen this confusion. The best place to find a broker is through a personal referral, of course.  However, if you don’t know anyone to ask, try the National Association of Health Underwriters to find an agent nearby.

If you want to do the legwork yourself, a third option is to research coverage from any unions or associations you belong to. In my friend’s case,the National Writers Union and Freelancers Union offer competitively priced coverage. It’s often worth the price of annual dues to gain access to health (and other) benefits. Your professional or trade organization may have similar perks.

The Affordable Care Act provides grants to the states to set up health insurance exchanges. If implemented as planned, individuals and small businesses will be able to pool resources and buy health insurance coverage collectively, to gain the same pricing advantages as larger organizations. According to the Department of Health and Human Services, these exchanges will provide consumers with “one stop shopping” to compare various plans and options. Unfortunately, this provision won’t fully kick in until 2014 – assuming that it remains intact following the shift in the current political climate.

Bottom line is, don’t panic. Just like my friend, you have options. Less expensive plans with higher deductibles might be good choices for those with few health needs; broader coverage plans with lower deductibles and copays mean higher premiums, but if you have a chronic condition or other reasons to need frequent care, it may be more cost-effective in the long run. The new law also mandates a “high risk” insurance pool – if you can’t find affordable coverage because of pre-existing conditions, it provides basic coverage regardless of health condition. This plan is valid through 2014, when insurance companies can no longer deny coverage based on prior health issues.

Whether you opt for do-it-yourself research or use the services of an insurance professional, just be sure to compare apples to apples – and see what each plan doesn’t cover, such as birth control or certain tests, as well as what it does cover. Don’t be afraid to ask questions, and make sure you fully understand what you are buying. Do your homework – it will help remove much of the guesswork from a very confusing topic.