But that cozy arrangement is changing, based on several market factors and a hidden clause in the Affordable Care Act.
While individual coverage for health care increased in the first half of 2014, it declined in the second half of the year, according to research tabulated by the Heritage Foundation from state government reports. That’s because employers stopped covering employee health insurance, offsetting about 85 percent of the individual coverage gains.
While there’s still a net gain in the number of people who now have health insurance, a lot of that gain was because of increasing numbers of low-income people signing up for Medicaid.
Overall, that means that more than 4 million people aren’t covered by employer-based health care plans. That leaves the uncovered with three choices if they wish to remain insured: get insurance on their own; find a new employer willing to cover their health insurance; or apply for the government-funded Medicaid.
There’s bad news on the horizon even if you’re covered. The so-called “Cadillac tax” will arrive in 2018 as part of the Affordable Health Care Act. That’s a 40 percent excise tax that will hit those who have an employer-provided health plan higher than a certain benefits level.
For an individual, the tax kicks in at $10,200. That means if you have a health care package through your employer that’s worth $12,000, you will be taxed on the value of $1,800 of it. While efforts are underway to eliminate that clause, it may cause more people to head into the insurance marketplace to seek a better deal.
What to Look for in a Plan
The reason health care is difficult to shop for is that you’re never quite sure what you’ll need. Health care is unpredictable, and costs can be enormous if you’re caught with an unexpected disease or are involved in an accident that requires long-term care.
There are certain things you can look for in a plan. Here are a few tips:
1) Co-pays and deductibles cost money. When you visit a doctor, there’s typically a co-payment, and many less expensive plans have a high deductible, meaning you need to cover a large amount of your bill before insurance coverage kicks in. Co-pays and deductibles add up, and when comparing costs, it’s important to know that plans with similar benefits can have widely varying out-of-pocket costs. Your budget is important, but keep in mind that if you have an unaffordable deductible, it can spell disaster in an emergency. In general, if you pay a higher premium, you will pay less when medical services are rendered. But beware the fine print – you may have to pay a deductible for each family member, and some costs may not count against your deductible.
2) Find the right plan. Not every insurance company has every plan available, so look for a company that offers the plan that you need. HMOs will set you up with a primary care provider, who then is responsible for referring you to other medical professionals; EPOs restrict you to medical providers within their network; and PPOs have options if you choose to go outside of a network. If you have a health problem that requires a specific medical need, then you probably should go with the plan that offers you more options for care.
3) Choices are important. Usually, the higher the number of facilities and doctors you can visit, the better. But if you have a favorite doctor and hospital that are within your plan, then a small network may be just right for you.
4) Make sure your doctor is in. Call the office and make sure that your doctor accepts the insurance plans that you are targeting. This will help you make a final decision on whether a plan is right for you.
5) Check the references. No one wants to deal with a nightmare of phone trees and rude customer service if they have to make a claim. Is it important that you are able to reach your insurer 24/7? Do you want to avoid paper billing and just be able to access your account online? Are there negative reviews about how customers were treated (keeping in mind that happy people rarely go online to rave about service)? All of these are considerations when you’re choosing an insurance provider.
6) Make sure the essentials are there. A plan is mandated to cover certain benefits, deemed “essential health benefits,” by most state laws. These include emergency services, hospitalization, lab tests, mental health and substance-abuse services, maternity care, outpatient services, pediatric care, prescription drugs, immunizations and other preventive care, and rehabilitation services. If one or more is particularly valuable to you or may be in the future (like maternity benefits) make sure you know how deep the services run. Some individual plans that were purchased before the Affordable Care Act kicked in may not cover everything.
7) Premiums are tiered. Plans are typically sold based on precious metals. Bronze-level plans have the lower premiums but high out-of-pocket costs, while platinum plans likely will cover 90 percent and have high premiums/low out-of-pocket.
8) Check websites for independent research. There are websites that allow you to compare costs anonymously based on certain information, including eHealthInsurance.com, HealthInsurance.com and InsureMonkey.com (which is for you, not your monkey). Make sure the plan you choose is actually an insurance company. You can call your state insurance regulator to verify that information.
9) Check enrollment periods. Open enrollment into many plans is only available for a certain period each year. Make sure you can latch on during that period. There are income tax penalties for those not covered by some form of health insurance.
It’s probably a good idea to make a checklist of must-have items, and make sure you keep a budget in mind when shopping. Plan for the worst-case scenario if at all possible – nothing is worse than having a $10,000 deductible and needing that large sum up-front. Just keep in mind that many people have successfully navigated this complex realm, and while it can be confusing, ultimately there are enough safeguards in place that most people make a choice that works for them.