2016 will be the third year of the Affordable Care Act (ACA aka Obamacare) compliant health plans available to all. It will also be the third year where the law requires everyone purchase and own health insurance unless they meet a limited number of special exceptions. For those states where Medicaid was expanded if affordability is a significant issue and income is under specific low limits Medicaid coverage is an option.
Over the first couple years of the individual marketplace offering ACA compliant plans without regard for medical underwriting criteria, a lot has been learned about how offering coverage so widely will actually work. Throw in the subsidies and that alters the picture even more. Toss in other elements such as CO-OP plans, and smaller community specific plans and the picture changes even more. Ultimately, lots of lessons are learned thru the entire process of getting to where we are today.
With all of these lessons, and where some carriers have lost significant money on the plans they have offered, trends are emerging in how coverage is being offered. These trends are quite different from where the individual health insurance market was not too many years ago. One of the more significant shifts has been away from PPO plan offerings with large networks and out of network care coverage to more limited networks and fewer plans offering out of network coverage. Even some of the PPO plans are much more restricted than they were before.
As the carriers begin to better understand how utilization is affected by everyone being able to buy coverage they can more appropriately price the plans. Also, some are finding they priced too low and got a disproportionate share of the unhealthy insured population. This leads to more drastic modification of go-forward pricing and networks. In Houston for example MD Anderson Cancer Center is out of all but one network, which likely leads to higher utilization in that plan. For 2015 the other carriers who had the facility cut them out of the individual plan network because of that cost factor.
Carriers are also learning how previously uninsured populations seek care now that they are insured and have to take that into account as they design new plans. These and other lessons led to changes between 2014 and 2015 and will lead to more changes as now the data is more mature and trends are more firmly developing. This may lead to changes such as fewer PPO plans offered to the insured populations in some areas.
With all of these changes and new limits put on the overall plans coupled with a more liberal definition of covered care the carriers have limited and plan even more limited plan design offerings going forward. Thus, a few simple strategies should be applied when selecting the appropriate health plan for the new year. (Even those with choices among group plans offered by their employers can employ these same techniques to better pick their coverage going forward.) First is to evaluate what physicians you use and must continue using. If you have a chronic condition switching doctors all the time tends to degrade continuity of care so keeping your doctor where possible is a good goal. Now take your list of must have doctors and look at the networks on the plans you are considering and see which have your doctors and eliminate those who don’t.
Second, look not only at the premium of the plans you are considering but how the benefits are paid. How much money will you need to spend for your care and at what point will these costs hit you? For instance if you are picking a plan with a deductible only and no co-payments or co-insurance you will, for other than preventive care which is mandated to be cost free to the insured, have to meet the full deductible amount before any coverage kicks in from the insurer. For instance if you have a $6000 deductible and break your leg, the first $6000 comes out of your pocket. Can you afford paying the entire deductible at once? Sometimes there are slightly more expensive plans that pay out the benefits differently allowing you to spread the cost of care more over the course of the year, without spending much more on premiums.
Third, look at the annual cost of the premium and out of pocket costs for care. Consider what plans are truly more affordable plans. Know that higher premiums and lower out of pocket care costs may be a better option when considering the full cost of maxing out the cost of care during the year. Be sure to look at the maximum out of pocket costs under your plan both in and out of network. Know many plans now and in the future will offer no out of network care options so there are no limits on out of network expenses.
Fourth evaluate any drugs that you must take to ensure they are in the formulary for the plan you like. Some medicines are not in all carrier’s formularies which can lead to significant costs out of network. Also, the out of network costs likely will not apply to any maximum out of pocket limits, so this is important as it could be an extra few hundred dollars per month if the drug is not covered by the plan selected.
Fifth you need to look at how much you travel and if you plan to seek care outside your home area. Most HMO plans for instance do not allow normal care as in-network outside your home area. Thus, if you spend a lot of time outside the home area an HMO may not be the best plan selection. One exception is if you never seek routine care while away and would only use the plan for emergency care when away, then an HMO may still work.
With these five simple considerations it’s fairly easy to narrow down to a few plans the ones which are economically best for your needs. It may be with a carrier you don’t really like one year or another but ultimately if it’s a best fit economically it may still be better to go with a carrier you don’t like than pay more to avoid them, unless the cost difference is minimal. It’s always a good idea to use an experienced broker who can guide you thru the process.
The basic idea behind these steps is to look before you jump. It can be a very quick process to assess which plan is best. If you don’t have any medicine or any doctors then it’s really a pretty simple math comparing a couple of plans you like to determine which is most expensive thru the course of the year. Where doctors and medicine comes into play looking up to see if they are covered will eliminate surprises later in the year, however doctors can leave the network at any time. Use a good broker and pick your plan for 2016 wisely.
Please consider signing up for alerts when we publish new articles. It is as simple as clicking here.