10 Things to Do When Choosing a Health Plan for 2016

Open enrollment for individual plans kicked off Nov. 1, and you need to choose a plan by Dec. 15 if you want coverage to take effect Jan. 1. If you don’t choose a new plan, your existing plan may continue your coverage, but don’t assume that will happen because not all plans continue.

Confirm that doctors and meds will be available in 2016

Even if you like your current plan, it’s important to reevaluate that plan and look at the options for next year. Your plan may have changed its providers or the drugs it covers. New plans may have become available that would be better suited to your situation.

Price shopping for plans can be a short-sighted strategy

When shopping for healthcare plans, estimate how much you are likely to spend on medical care next year, taking into account prescriptions, treatment for chronic conditions and how you will pay if you are in an accident or contract a serious illness. The plan with the cheapest premium could be the right one if you get through the entire year without an accident, emergency room visit or doctor appointments that necessitate lab work. All it takes is one emergency and you could end up paying more in medical bills than you saved in your premium.

Here’s a 10-item to-do list choosing a healthcare plan from the federal or state exchange:

1. Find out which plans include your doctors. If you have doctors you like and want to continue seeing, check provider lists, then call the doctors to verify their participation.
2. Compare the Summary of Benefits and Coverage. This federally mandated standard form makes it easier to compare plans by listing copays, deductibles, tiers of drugs and providers and other information.
3. Review drug coverage. Some plans have a separate drug deductible, and some don’t pay for any drugs until you meet your entire deductible. Some plans charge a copay for drugs, and others require you to pay a percentage of the drug cost. The same drug may be in different tiers in different plans–if you take an expensive drug, do some research.
4. Choose an HMO, a PPO or other option. With an HMO, you generally need a referral before you can see a specialist; most PPOs let you visit any doctor in their network, and some provide some coverage for out-of-network care.
5. File updated income information. If your income is between 100 and 400 percent of the federal poverty level ($11,670 to $46,680 for a single person and $15,730 to $62,920 for two people in 2015), you’re eligible for a subsidy to help pay your premiums. If your income is between 100 and 250 percent of poverty level, you’re also eligible for cost-sharing reductions, which means lower copays and deductibles on a silver plan.
6. Evaluate copays, coinsurance, deductibles and premiums together. If you have a chronic condition or visit doctors frequently, you are probably better off paying a higher premium that gives you lower copays. Someone who rarely visits a doctor may prefer high copays and deductibles in exchange for lower premiums.
7. Be prepared to pay a penalty if you don’t have health insurance. For 2016, the penalty for not having a qualifying health insurance policy will be $695 per adult and $347.50 per child or 2.5 percent of your income, whichever is greater. There are some hardship exemptions.
8. Stay on top of your income if you’re self-employed and receive a subsidy. Using the marketplace is tricky for self-employed people whose incomes fluctuate. Eligibility for subsidies is based on modified adjusted gross income, which for most people is the adjusted gross income on your tax return. If you guess wrong and stay below 400 percent of the poverty line, you can either get a tax credit or pay more at tax time. But if your income goes above that limit, you have to pay back your entire subsidy. However, if you take the cost-sharing reduction plan and guess wrong, you don’t have to pay it back. If your income changes during the year, you can go in and make adjustments.
9. Search both inside and outside the marketplace if you don’t qualify for a subsidy. Exactly what’s available will vary by location. In some areas, you may have additional options as a small business in addition to those provided for individuals. If you buy from the marketplace and your income drops, you can get a subsidy midyear. But if you’re outside the marketplace, you can’t join the marketplace midyear unless you experience a qualifying event such as the loss of a job.

Do you have questions about your healthcare plan for 2016? Contact Carly Ebenstein @ CJB Insurance Services: 510.342.2670.