10 Tips to Ace Obamacare Enrollment
By Colette Snyder of FUEL Financial, Inc. in Lakewood Colorado
If you’re shopping for health insurance through the state, you may have some concerns about the process. There’s definitely a lot to learn but there is also good news! Two major changes have come about since the Affordable Care Act that could make shopping for health insurance less painful. First, starting next year, health insurance applications will no longer ask you questions about your health. You can no longer be denied or be forced to pay more for premiums because of your current health situation. Second, depending on your income, and what state you live in, you may be eligible for some premium assistance. So take heart! But be aware, big changes mean learning curves and confusion. So here are 10 tips to help you enroll.
- 1. Buy health insurance. One of the functions of the Affordable Care Act, is to impose a tax penalty on individuals who do not purchase health insurance. In most states, that penalty is based on a percentage of your income. But the penalty shouldn’t scare you as much as living day-to-day without health insurance. You’ve probably heard about the close correlation between bankruptcy and medical bills, but did you know that not having health insurance can actually kill you? Most hospitals are not required to treat you if your situation does not appear to be life threatening, and you don’t have health insurance. So buy it, even if all you can afford is the catastrophic plan. That insurance card may just save your life.
- 2. Don’t wait too long. The federal and state exchange sites still have some kinks to work out. Trying to purchase a plan in early November could be frustrating, so I would suggest waiting until late November or early December to purchase your plan. However, be sure to get your shopping done before the 15th of the month PRIOR to the month you need coverage to start. So for many of us, that’s December 15th. Many carriers are forcing their enrollees to pick a new Obamacare-compliant plan to start January 1st of 2014.
- 3. Get the right plan first. It is my understanding, that you will have limited opportunities to shop for insurance in the future. In the past, you could apply for a plan and go through underwriting at any time, if you were healthy. Starting next year, you will need complete your shopping during open enrollment (this year is Oct 1st through March 31st, every year after will be October 15th through December 7th), or during your own personal qualifying event. These events include divorce, marriage, coming off of COBRA, change in employment, birth of a child, and more. If you want to purchase a plan or need to make a change, and you’re not within this time frame, you will need to wait. That could mean waiting up to ten months. So do your research, and get a plan that suits your long term needs.
- 4. Don’t be subsidy greedy. In Colorado, if your income falls between 133% and 400% of the federal poverty level, you might be eligible to receive money in the form of a premium subsidy that will decrease the cost of your health insurance. Subsidy thresholds vary state-to-state. Though it may be tempting to take every dollar the government offers you in premium subsidies, you may regret it. If your income increases during the year, the state expects you to report that change, and adjust your subsidy down (this is confirmed for Colorado, but I’m not sure about all states). If you don’t, you will be expected to pay the overdue subsidy amount BACK when you reconcile your taxes that year. You have the option to adjust your subsidy amount if you expect changes in the coming year, so be sure to plan ahead!
- 5. Know your exposure. In order to control costs, companies are getting creative with plan designs. Some of them have relatively low deductibles, but have higher out of pocket costs. Get a plan that you know will fit your current medical expenses; and it’s also important to understand what your worst case out-of-pocket costs are. That number is what you will owe if something serious happens to your health. Be sure you are comfortable in your ability to cover that worst case out-of-pocket amount, not just the deductible.
- 6. Consider using non-taxable funds first to increase subsidy amount. If you’re near retirement, you may have some assets or potential income streams that you can access tax free. If you’re close to the subsidy eligibility range, or looking to get a higher subsidy, take income from these kinds of accounts first. They don’t count toward you MAGI (modified adjusted growth income) which determines your subsidy amount. Examples include: Roth IRA’s, money from the sale of a house, personal savings, and cash value life insurance.
- 7. Check your doctor. Once again, companies are attempting to control costs, and one way to achieve this is by limiting the size of their networks. You may have had a large network with your carrier in the past, but don’t assume that you doctor or preferred hospital are still going to be available under a plan through the exchange. If your doctor is not in the network of the plan you are considering, and you don’t want to change doctors, you should look for another plan.
- 8. Check your drugs. The same goes for drugs. Don’t assume your drug is covered by a company that previously covered it. It might only be covered as a generic now, or will be covered at a different rate. Some companies are scaling back on expensive drug coverage, or forcing enrollees to try generic versions of drugs before covering brand name versions. Ask your broker to check all of your drugs and dosages before you sign up.
- 9. Know all of your options. If you make more than 400% of poverty level (which is about 40% of the population) then you probably won’t be eligible for a subsidy. You still have the option to shop on the exchange, but you don’t have to. There are more companies and more plans available in the private market that you can shop as well. Both on and off exchange plans will be available to you with no medical questions during the open enrollment period.
- 10. Talk to a broker. In Colorado, individuals working for the state exchange can help consumers navigate the website, and can answer many common questions. They cannot, however, recommend a specific plan or company. That’s where independent brokers take over. Brokers can help you with all of the above obstacles, and help you find the plan that’s right for you. There’s no extra charge to work with a broker, so you might as well get some extra help.
Colette Snyder is a licensed health and life insurance agent certified to sell state exchange health insurance plans in Colorado. Colette and her mother, Jo-Ann Holst, are the owners of FUEL Financial, Inc. (Finances Understood, Empowerment Launched), an insurance and financial services company based in Lakewood Colorado. Both Colette and Jo-Ann give public seminars on a wide range of financial topics including: Healthcare Reform, Social Security, Medicare and Planning for Retirement.
For help with health insurance enrollment in Colorado on or off the state exchange, or to view an upcoming classes by FUEL Financial, visit www.fuelfinancial.com, or call 720-287-5880.