Affordable Care Act
Five Essential Tips for Last-Minute Obamacare Shoppers
Published on February 06, 2016
Open enrollment is the time of year when anyone can sign up for a new individual or family health insurance plan. Under the health reform law popularly known as Obamacare, the nationwide open enrollment period only comes round once each year.
Too many health insurance shoppers wait until the last day or two of open enrollment before looking into their health insurance options and enrolling in coverage. The following tips were developed to help last-minute shoppers choose a plan that meets their personal coverage needs and budget.
- Beware of killer out-of-pocket costs. Affordable monthly premiums are really important. But no less important are the out-of-pocket costs (copayments, deductibles, etc.) that you could face if you get sick or visit the doctor. What good is a health plan that you can’t afford to use? An eHealth survey report shows that out-of-pocket costs for medical care and prescription drugs will be the biggest factor in your satisfaction with your coverage over time1.
- HSA-eligible health plans can save you a bundle. A lot of people these days are turning to plans with higher annual deductibles because these plans tend to come with lower monthly premiums. What many don’t know is that plans meeting certain requirements, including an annual deductible of at least $1,300 for individual coverage or $2,600 for family coverage, are generally eligible for use with a Health Savings Account (HSA). HSAs let you save money on a tax-deductible basis for qualified medical expenses (including copays and deductibles!), up to $3,350 for individual coverage or $6,750 for family coverage in 2016.
- Subsidies (if you’re eligible) can save you hundreds per month. If you earn about $47,000 or less per year ($97,000 or less for a family of four), you may be eligible for government subsidies that can effectively lower your monthly premiums by hundreds of dollars per month. Subsidies can make all the difference when it comes to affording health insurance. Don’t leave money on the table! Licensed agents and government exchanges can help you learn if you qualify for subsidies.
- But watch out for the “subsidy cliff.” Health insurance subsidies are based on how much you expect to earn during the year. Any discrepancy in your expected earnings and your actual earnings will be reconciled on your federal tax return. Be cautious about estimating your income when applying for subsidies. If you earn more than expected, you may be required to pay back some or all of your subsidy dollars at tax time.
- Government exchanges won’t show you all your options. The government-run health insurance exchange in your state will show you the plans eligible for purchase with a government subsidy in your area. If you’re not getting subsidies, however, you may be better off shopping with private exchanges like eHealth where you can often find the same government exchange plans PLUS other Obamacare-compliant plans not available through government sites.