Switching jobs? Just graduated college? Need a plan that better fits your family’s needs, but can’t find one through your work? Finding a plan on your own can be tough, but a little knowledge goes a long way. These 5 health insurance facts will clear up the confusion and get you closer to the coverage you need.
1. HMO vs. PPO
HMOs (Health Maintenance Organization) and PPOs (Preferred Provider Organization) are different in terms of flexibility and cost. HMO plans require you to designate a PCP (Primary Care Physician). You must consult with your primary physician for a referral before you can see specialists that are in your network. Doctors and specialists outside of your network are not covered. These plans sacrifice flexibility for lower monthly premiums and lower out-of-pocket costs. PPO plans allow you to seek care from any doctor you choose and referrals are not required to see specialists. You also receive coverage for doctors that are out-of-network. These plans tend to have higher monthly premiums but offer the most flexibility.
2. Premiums and Deductibles
A premium is the cost of your insurance plan that is usually paid monthly, but can be billed in a number of ways. You must pay your premium to stay covered throughout the year. A deductible is a fixed amount you must pay before your medical coverage starts paying out. For example, if you need a procedure done that costs $3000 and your deductible is $1000, you will have to pay that first $1000 before your insurance covers the cost (insurance will only cover a percentage until you reach your out-of-pocket maximum for the year). You are only responsible to pay the deductible when you receive care.
If you earn between 100% and 400% of the Federal Poverty Level, you may qualify for a subsidy. Subsidies are a type of cost assistance that helps to lower your monthly premiums. These are only available on plans offered by your state’s health insurance marketplace during open enrollment. This subsidy calculator is an easy way to check if you’re eligible for a federal subsidy.
4. Tax Obligations
If you don’t purchase a health insurance plan, you are subject to a tax penalty (unless you qualify for an exemption). The penalty in 2015 for not having insurance is $325 per adult and $162.50 per child or 2% of your taxable income—whichever is greater. In 2016 the penalty will raise to $695 per adult and $347.50 per child or 2.5% of your taxable income—whichever is greater.
5. Comparing Plans
Researching plans can be time consuming, but choosing without researching may leave you with a plan that doesn’t suit your needs (or breaks your budget). If cost is your priority, off-exchange plans (not found on your state’s exchange site or healthcare.gov) may offer better monthly rates. Comparing plans is the only way to find the best option that fits your budget and healthcare needs. HealthMatchup.com can help you compare plans both on and off-exchange, ensuring that you have the info you need to make the choice that is right for you.