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For a long time, I never thought about health insurance. We simply had a health plan through my husband’s job. But now that my husband has shifted his focus from a full-time job to several consulting and board positions, we don’t have a group health plan like we’ve enjoyed in the past.
On top of that, and maybe many of you are in the same boat, my husband is a bit older than me and already reaping the benefits of Medicare. But being young and fierce, I still need normal health insurance. Now that I’m on my own during open enrollment, I’ve realized that the health insurance marketplace is 1) expensive, 2) confusing, and 3) sends me into an emotional tailspin that only crafting or a Great British Baking Show binge can cure.
Even though I am pretty healthy, keeping up with my Weight Watchers goals, and exercising regularly (hello, triathlon!), I still need health insurance. Like I mentioned in a recent retirement planning post, numbers aren’t really my thing. And that includes health insurance, and all its tricks and numbers and costs and acronyms and weird jargon that I may or may not be pronouncing correctly.
Navigating Open Enrollment
This is one of those things that I usually push to the back burner. Writing books, blogging, crafting, quilting, and all the other fun things I get to do sound so much more better than thinking’s about health insurance. But since it’s November, and my Living Well Spending Less planner is reminding that November 1st marks the first day of open enrollment, it’s time to sort this out.
I’m calling in another expert there, now that open enrollment is officially in full swing. Health insurance startup, Take Command Health, is aimed at helping people shopping on the individual market make smart shopping decisions. Sounds good to me.
Please note that I am not an affiliate of this company. Their services may or may not be right for you. I’m not making a recommendation one way or the other. However, the tips and insights they offer helped me sort through some of my confusion to better understand what questions I need to ask when choosing a health plan.
Here’s what they have to say.
Smart Shopping Tips for Individual Health Insurance Before Medicare Kicks In
You did it. You finally retired or reached a point where you (or your spouse) are slowing down your career to focus on friends and family. Medicare is on the horizon once you turn 65, but what are you going to do before then? The truth is, individual health insurance can be daunting especially if it’s the first time you’ll be shopping on your own.
And you aren’t alone if you think health insurance is difficult to navigate. It turns out over 88% of Americans choose the wrong plan and end up wasting more than $500 a year!
Before you sign up for a plan this year, it’s important to understanding your best options, especially with all the changes in the market this year. Take Command Health is here to help you understand the health insurance market, see through the fine print, and make a smart decision.
If peace of mind and no hassle sound good to you, let’s get started with a few insider tips on how to buy individual health insurance and get the most bang for your buck.
Always shop every year.
It’s tempting to want to stick with one plan out of convenience, and the thought of trying something new can be intimidating. Unfortunately, health insurance isn’t something that should be put on auto-pilot. Plans, doctor networks, prescription coverage and your family’s health needs are changing every year. Not to mention, the market is changing significantly due to several emerging trends: narrowing provider networks, rising premiums, insurers leaving the exchange and offering off-exchange only plans.
What was great one year may be terrible the next, and insurance companies are frequently shifting things around to maximize their earnings—not necessarily your health.
Here are a few things to keep in mind:
- NEVER let yourself get auto-renewed in a plan: 80% of plans will have a significant change each year that you may not be aware of.
- If you’re leaving a company and COBRA is an option, 99% of the time, COBRA is a bad deal. Don’t just accept it because it’s easy. You can be billed for up to 102% of the total cost of coverage; 100% of the cost of your previous plan plus a 2% administrative fee!
Look at ALL of your options
There are several ways to purchase health insurance. When you shop at Healthcare.gov, you’re only seeing “on-exchange” plans. However, insurance companies only make a fraction of their plans available “on exchange.” If you go directly to an insurance company’s website, you’ll see their “off-exchange” plans. There are also private exchanges, co-ops, faith-based “medical sharing” plans, and even short-term plans (now 90-day plans that can be renewed consecutively four times for 12 months of continuous coverage). While each of these has their drawbacks, they are all worthy and affordable insurance alternatives if they fit your convictions, lifestyle, and needs.
And remember, faith-based plans like Medi-Share are cost sharing programs, not traditional insurance. While one of its biggest perks is its affordability, it’s important to remember that it operates a little different than what most people are used to. For one, everyone must attest to living a Christian lifestyle, you pay for preventative care and immunizations, there’s limitations on pre-existing conditions (especially if you’ve had symptoms or treatment in the last five years), and it doesn’t cover things like mental health or substance abuse counseling. Once you meet your deductible (or what they call an annual household portion on Medi-Share), you “share” everything and pay nothing for things that are covered. The flip side is that you pay the full cost of expenses until you hit the deductible.
Estimate your out-of-pocket expenses
Statistically, over 75% of your costs in the next year are predictable based on your known needs.
What really drives costs, and therefore your plan choice, are the things you know about: prescriptions, doctors visits, therapy, medical equipment, etc. If you’re healthy, maybe you plan on none of these things–which is just as important to know. At Take Command Health, you can quickly search for your prescriptions or tell us about any health needs you are managing such as “physical therapy” or “planning a knee replacement.” We’ll run all the numbers for you and help you estimate your out-of-pocket costs on each plan! Brilliant!
Take advantage of tax credits, HSAs, and HRAs
One way to pay too much for health insurance is to leave money on the table. We see many individuals assume they’re not eligible for tax credits when they actually are. Depending on where you live, a family of 3 or 4 that makes $90,000 a year will likely qualify for a tax credit.
If you do make too much money for a credit, then you should probably consider using a Health Savings Account (HSA), like the Lively HSA we offer for free with our premier membership. HSAs allow you to pay for your care with tax-free dollars. For high-earners in a higher tax bracket, that’s like a 30 to 35% discount on health costs!
Other relatively recent tax-advantaged strategies if you work at or own a small business is a QSEHRA (Qualified Small Employer Health Reimbursement Arrangement) or an ICHRA (Individual Coverage HRA). Efficient, flexible, and predictable, this allows a small business employer to reimburse for premiums and medical expenses tax-free while the employees choose their own individual plans. It’s not surprising this strategy is gaining so much popularity across the country! If you want to see if QSEHRA, ICHRA or some other tax-advantaged HRA would work for your business, check out the Small Business HRA Strategy Guide.
Keep your doctors “in network”
Keeping your favorite doctors “in network” is critical to saving money. If you try to see a doctor that is out of network, your health plan won’t help very much or may not pay anything at all. Many people are familiar with “PPOs” and “HMOs” but there are actually several options in between that are worth considering.
While PPOs provide the most flexibility, they are also the most expensive. If your doctors happen to be in an HMO or if you don’t have preferred doctors yet, the HMO can be a great money saving choice. These aren’t the HMOs of the past with long wait times and long lines. You can get referrals online (check with your provider) and going to see some specialists (like an OBGYN) no longer requires a referral.
We’ve built the first universal doctor search tool that let’s you quickly search for your doctor across all plan types and networks. Don’t waste time digging through each insurance company’s site or calling every doctor. When you go through our survey at Take Command Health, we’ll help you search for your doctor or you can use our stand-alone doctor search tool to quickly search for your doctor.
Common pitfalls to avoid
We want you to feel like an expert and that means understanding how these terms really impact plan choice. Here are a few of the most common pitfalls we see each year:
“I need a plan with a low deductible”
We’re programmed to think that we don’t get anything before the deductible (in all fairness, it was this way for many years). However, with individual plans, all of your preventive care is covered before the deductible. That means all of your annual physicals, screenings, immunizations, flu shots, etc. cost $0. You could see the doctor multiple times a year, get monthly prescriptions, and never touch your deductible because you don’t need to. Plans with low deductibles are very expensive and rarely best. Instead, focus on more important numbers like estimating your cost of care and the max-out-of-pocket limit.
“I need a low copay”
Insurance companies have done lots of research and know that individuals pay the most attention to a plan’s deductible and primary care visit copay when choosing a health plan—and they will use fancy marketing to trick you. Aetna had a series of plans recently with names like the “Aetna $15 copay Bronze Plan.” Here’s what happens. The $15 covers the cost of the doctor visit only. Literally, just the 20 minutes the doctor spends talking to you. Recall from above, if you’re seeing the doctor for a screening or annual physical, this is $0. If you’re sick or injured, you’ll almost certainly need a strep test, bandages, lab work, etc. that is not subject to the $15 copay. We see clients get frustrated by $200 bills that they thought were going to be $15.
In addition, copays do not count towards your deductible. That’s a huge surprise to most folks, but we promise it’s true. If you have a plan with a $1000 deductible and a $500 ER copay and have to go to the ER for something minor, you’ll pay $500 no matter what (even if it wouldn’t have been that much if you just paid cash) and will have paid $0 towards your deductible.
“I need a plan that covers my prescription”
Here’s a good rule of thumb: if you take a name-brand medication, then, yes, you do need to make sure it’s covered by your plan. However, most maintenance drugs are available in generics. Many people think they take a name brand when they’ve actually been taking the generic for years. Most generics have a very affordable cash price. We had one client—a very nice lady—who insisted she needed an expensive Silver plan that was going to cost her $250 more a month because it had a $15 copay for her drug. Well, we found her drug cost $8 cash at her local pharmacy. Make sure to check the cash price of your prescriptions!
“I need a PPO”
Maybe you do, but you may also be way over-paying.
“My doctor won’t take any ‘exchange’ (Healthcare.gov) plans”
We hear this a lot, often from front-office staff or doctors who may be great physicians but don’t understand their insurance contracts. The reality is that doctors (or their hospital systems in some cases) negotiate with insurance companies, not with plans that are on or off-exchange. If your doctor has negotiated with an insurance company to accept one of their networks, it doesn’t matter if you buy your plan on the exchange (Healthcare.gov) or on a private exchange.
About Take Command Health
Take Command Health is here to empower you to be a smart shopper when it comes to your health insurance. Our online tool is free, easy to use, and takes five minutes. We are data driven, innovative, and trying to shake up the health insurance industry. Give it a try!
Compare all of your options side-by-side including off-exchange plans, marketplace plans, short-term plans, and faith-based options. You can use our award-winning tools to search for your doctors, check your prescriptions, and even simulate conditions and health needs to make sure you get the most of for your money.
We even offer a membership program that allows you to call a doctor 24/7 for $0, enjoy medical bill negotiation support, a personal health advocate, dental discount programs, vision discounts, and pharmacy discounts, etc.
Our team of licensed health insurance professionals (real people, not robots!) are here to help answer any questions. Just chat with us on our website or shoot us an email at firstname.lastname@example.org