Everything you need to know about buying your own health insurance (but didn’t know to ask)
Going out on your own or starting your own business can be scary enough, but the thought of figuring out health insurance can be downright daunting. The good news is you don’t need to put off that big career move just to have company health insurance.
And while the Affordable Care Act has given you some reliable individual and family health insurance options, it can still seem confusing and expensive.
Here at Friday Health Plans, we’ve outlined everything you need to know before diving into the health insurance shopping period. And with Open Enrollment around the corner (November 1), now is the perfect time to brush up on your knowledge.
Pick the Right-Sized Plan for You
A smart way to approach saving on health insurance isn’t always by comparing monthly premiums. It’s by evaluating health plans based on how much you’re going to pay over the course of the year when you add up premiums (your monthly payment to have insurance) and the costs you pay for medical services and drugs.
Even if two plans have the same premium, if one requires you to pay a lower cost for doctor visits and prescriptions, it could save you money in the long run.
For example, some plans cover generic prescription drugs for free, which can save you hundreds of dollars annually compared with other plans with the same monthly premium.
Honestly assess what healthcare services and drugs you’re likely to use for the whole year. That will help you select a plan that covers what you need and avoid paying for plan perks you aren’t going to use.
Here’s a few points to consider in evaluating which plan level might work best for you:
- Does the plan allow you to access the services you use most at a cost that works for you?
- What’s the copay (flat fee you pay each time you see the doctor or buy a drug) or coinsurance amount (the percentage you pay for services after you’ve met your deductible) for the medical services you use most?
- If you are in good health and don’t anticipate any major medical procedures, consider a high-deductible plan that costs less per-month than plans with a lower deductible.
See if You Can Score Financial Assistance
Financial aid for health insurance, otherwise known as a federal subsidy, is a type of financial assistance that can lower your monthly premium or reduce your out-of-pocket medical costs. The Advanced Premium Tax Credit lowers your monthly payment while a Cost Sharing Reduction subsidy helps lower the cost of deductibles, coinsurance and copays.
Whether you qualify for subsidies depends on your income, family size and the cost of health insurance in your area. Check your options on our subsidy page.
Shop Around for the Best Deal
You’d be surprised at how many independently insured people sign up for the same plan each year without shopping for better options. Would you make a major purchase at Target without checking the price on Amazon? Nope. So take the time to compare your current plan with new offerings to be sure you’re not paying more than you should for similar coverage. Most insurance companies will provide detailed plan options soon in preparation for the open enrollment period from November 1/
If you don’t have a chronic illness, only see the doctor a handful of times a year and have minimal generic prescriptions, it doesn’t make sense to have the Tesla of health insurance plans.
Look for a plan that covers what you need most, and acts as a safety net in case of an unexpected emergency.
Know the difference between ACA-compliant coverage and Health Care-sharing Ministries
Health Care-Sharing Ministries (HCSM)
Health Care-Sharing Ministries are organizations in the United States in which health care costs are shared among members who have common ethical or religious beliefs. While HCSMs may offer affordable coverage, they are not real health insurance. They are not regulated by the Department of Insurance, and do not guarantee essential health benefits or coverage for pre-existing conditions and may have limitations on what they will cover. Which means they can deny you coverage or drop you off the plan if you get sick or hurt, or deny covering you for anything related to a past medical condition. They often have fixed annual limits on how much they will pay, leaving you on the hook if you have a big hospital bill. They also do not have partnerships with doctors and hospitals, so you are on your own to negotiate healthcare costs. Many doctors and facilities do not accept these plans for this reason.
ACA-compliant coverage refers to health plans that offer benefits for a broad-range of healthcare services that meet the requirements established by the Affordable Care Act, which is also known as ObamaCare.
Major health insurance companies, like Friday Health Plans, offer ACA-compliant coverage. ACA-compliant coverage covers pre-existing conditions and guarantees access to essential health benefits like free annual wellness exams and preventive medications. There are also out-of-pocket maximums, which limits the amount you will spend in one year on medical expenses. Considering one night in a Colorado hospital averages about $10,000, quality health insurance can save you from bankruptcy after a serious accident or illness.
Skip the Shortcut: Going Uninsured is Risky Business
Do you think since you haven’t been to the doctor in years and don’t have any prescriptions, it’s smarter to just skip insurance altogether? Helpful Hint: it’s not smarter.
You’re leaving yourself open for financial catastrophe. Without health insurance, a car accident or major unexpected illness can turn into bankruptcy in a matter of weeks.
Every day you’ll need to worry about avoiding injury or illness—forget carefree skiing, travel, dance parties, bike rides or commuting with germy passengers. That’s a heavy burden to bear, not to mention the cost of getting treated if you do crash or get sick.
Get a comprehensive ACA-compliant plan, or risk saving a dime to spend a dollar (or a few thousand)
You Could Save Big by Opting Out of Your Employer’s Health Plan
So maybe you have a job that offers health insurance? Sweet. That means signing up for it is a no brainer … right? Well, maybe not. Here are some things to think about before you sign on the dotted line.
The pros of the group plan
Employer-provided group health insurance can be a great option, especially if you work for a company that pays a good portion of your monthly premium. And if you do need to pay a portion of your premium, you do that before taxes, which gives you a savings.
“Opting out” might be a better option
Even if your company pays for some of your monthly premium, you might benefit from “opting out” of the group plan. Depending on the type of benefits the company plan offers and how much your employer contributes, it might be more expensive than if you got insurance on your own. Your company may think everyone wants a health plan that’s loaded with all kinds of benefits. But these might be right for them, not you. That leaves you paying too much for a “rich” health plan when all you need are the basics. This is what we call being “over-insured.”
During the open enrollment period for individual health insurance, take a look at the individual health plans offered on the open market—you might find one with benefits and a price that fit you better.
Insuring your family separately often makes sense
Your company may contribute financially to your insurance premium cost, but they may not contribute to your spouse’s or kids’ plans (if they offer it to them at all). In that case, it probably makes sense to shop for private health insurance for your family members to see if there are other plans that fit their needs at a more appealing price point. You could be surprised at the savings you find here.
Step-by-step shopping guide
- I’ve honestly assessed what healthcare services and drugs I’ll likely use for the next year. That is: doctor visits, generic drugs, urgent care visits, and specialist appointments. I now feel prepared to pick a plan that covers what I actually need, because the last thing I want is a pricey health plan with perks I’ll never use
- I’m under 30 and super healthy and want to spend the least possible amount of money on health insurance, so I’m seriously considering a Catastrophic Plan.
- I’ve determined which level of plan I need based on my health needs: Catastrophic, Bronze, Silver, or Gold.
- I’ve looked carefully at the services a plan covers BEFORE my deductible kicks in. Services like free doctor visits, free generic prescription drugs, and discounted urgent care visits would all be great.
- When evaluating health plans, I’ve checked out their health networks (the doctors and hospitals that have agreed to provide healthcare services at contracted rates for the plan’s members). Why? Because a health plan is really only as strong as its health network. And I really don’t want to drive 45-minutes to get a sore throat looked at.
- I’ve checked to see if I qualify for financial assistance on my premium payment. [If your annual income is less than $47,000 you probably qualify. See here.]
Need more more help? Watch our video on how to shop for your own health insurance.
If you want to talk to an expert about your options, email us at firstname.lastname@example.org