Health Insurance Considerations for Individuals and Families

Health Insurance Considerations for Individuals and Families

There are many considerations when purchasing health insurance coverage for you and your family members. And with the new ACA (Affordable Care Act or aka Obamacare) environment, your options are now a bit more confusing and probably somewhat more limited. This article intends to touch only on the primary variables of importance when deciding on the plan that meets the needs of your family.

1. Out-of-pocket maximum. This is the maximum amount per calendar year that you and your family members will pay for deductibles and coinsurance of all eligible expenses. This maximum, in our opinion, is among the most important variables as it directly limits your total exposure in the event of significant or catastrophic health care costs.

2. Choice of provider – Provider network. HMOs (Health Maintenance Organization) are designed to provide benefits ONLY to in-network providers. This is acceptable so long as the network is very saturated in your area of residence and includes coverage for regional hospitals for specialty care in the event of a serious health care need. POS (Point of Service) networks are very similar to HMOs except that they allow for out of network benefits with typically higher deductible, higher coinsurance and higher out-of-pocket maximum. PPO (Preferred Provider Organization) is the most flexible for providing in-network benefits at lower coinsurance and out-of-network at higher coinsurance. Sometimes, deductibles and out-of-pocket maximums are also different for in/out network benefits.

3. Premium rates. With the new ACA environment, families who are between 100% (133% for expanded Medicaid states) and 400% of the Federal Poverty Level who are not offered affordable coverage through an employer plan might be eligible for premium subsidies when purchasing coverage on-exchange. Rates can be as low as $0 in some cases for high deductible plans if your income is closer to 100% of FPL. If you receive self-employment income, you might also be able to receive a tax deduction on the premiums you pay for family coverage. While premium rates are important, don’t shop just on price as you might sacrifice with provider choice or additional out-of-pocket expenses.

4. Health Savings Accounts (HSAs). Certain Qualified High Deductible Health Plans (QDHP) offer the benefit of creating a special bank account to fund payments of qualified health care expenses, even if your plan doesn’t cover that expense – such as dental or vision services or to pay for long term care insurance. These plans will typically not cover any expenses other than preventive services until your deductible has been met. The advantage to the special bank account is that the contributions are tax deductible and qualified distributions are tax-free! If you and your family are in very good health and your income is high enough where this tax benefit helps, QDHPs joined with an HSA bank account might be your best option.

5. Deductible. The deductible is simply the amount that you have to pay out-of-pocket before the insurance plan will begin to pay. Some plans will waive the deductible for certain services such as physician visits or prescription drugs in favor of a co-pay instead. Lower deductibles typically mean higher premium rates. Most consumers prioritize a lower deductible, but a lower out-of-pocket maximum is far more important when protecting against catastrophic expenses.

6. Selecting a Plan. If you are not offered coverage through an employer, the first step is to check subsidy eligibility here: https://www.healthsherpa.com/?_agent_id=703 . By simply entering zip code, ages and income, you will able to get all quotes for your area within seconds. Next, start looking at plans comparing out-of-pocket maximum, deductible and premium rates. When you find the best balance for your comfort level, click on “details” and search for providers to be certain that you are also comfortable with the saturation of providers in your local and regional areas. Consider a QDHP plan coupled with an HSA bank account if very healthy and would benefit from tax savings. If within an eligible enrollment period, simply click “Enroll” to be enrolled within just a few short minutes.

If you have additional questions as a Virginia or West Virginia resident, please contact Creekside Insurance Advisors directly at (800) 467-5425 or mailto: info@creeskideadvidors.net.

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