Health Insurance
Choosing the Best Option for You and Your Family
When it comes to buying health insurance, you want to have the right amount of coverage, but it can be confusing to determine how much insurance you really need. The NAIC provides these tips to help you make the best choice for you and your family.
When You Can Buy Health Insurance
Coverage Through Your Employer
If your employer offers health insurance, you can buy your plan or change your existing one during open enrollment. This is when all members of your group health insurance plan can enroll or change certain benefit programs. It is generally held once a year, but certain exceptions apply for new employees or if you have a major life event (such as the birth or adoption of a child, marriage, divorce or a job change). Check with your human resources department to see when your company holds open enrollment and when policy changes go into effect.
Buying Individual Coverage
For those who do not have the option to buy health insurance through their employer, you can buy insurance in the individual market. As part of the Affordable Care Act (ACA), you can purchase insurance through a state or federal marketplace, or exchange. Depending upon your household income, you may be eligible for premium subsidies and cost-sharing reductions. The Kaiser Family Foundation offers a free subsidy calculator that will help you estimate how much you could spend on premiums. The calculator uses your income information and number of dependents who require coverage to generate an estimate. Your family may also be eligible for Medicaid, or your children may be eligible to enroll in the Children's Health Insurance Program (CHIP). Contact your state insurance department for more information on CHIP.
You may also purchase coverage outside the exchange through an agent or broker or directly from a health insurance company, though you may not receive subsidies unless you purchase your plan through the exchange. For coverage starting in 2015, the open enrollment period starts on November 15, 2014. You can find more information about the open enrollment period for the health insurance marketplaces on healthcare.gov.
Read and Understand the Materials
Your insurer will make available materials that detail the terms of the plan, including which in-network medical providers (physicians, hospitals, labs, pharmacies, etc.) you may visit to receive covered care. In some plans, you may also receive care outside the network, though insurers have negotiated rates with in-network providers, resulting in discounted prices. These materials will also note how much the insurance carrier will pay under each type of plan. The ACA mandates that group health plans and health insurance issuers offering group or individual coverage must provide a Summary of Benefits and Coverage (SBC) and glossary of commonly used terms before consumers enroll in a plan and at renewal time to help consumers understand their policies. You can find more information on the SBC here.
There are many different types of major medical plans typically offered by insurers. For help understanding the differences between preferred provider organizations (PPO), health maintenance organizations (HMO), point of service plans (POS) or indemnity plans, read this FAQ.
Compare the Costs and Coverages of the Plans Offered
It's important to carefully evaluate your family's health care costs when deciding on a plan. To pick the best coverage, first calculate your costs from recent years and try to estimate what they might be for the coming year. Don't forget to include co-pays for doctor's visits, prescription medications and any procedures you might need.
Next, compare the premiums, out-of-pocket expenses and benefits under each plan. If you are buying a policy from a state or federal marketplace, you will be able to do a side-by-side comparison of the plans offered on the exchange. All plans offered in the individual and small-group markets must cover 10 essential health benefits (EHBs). The plans' SBC will also help you assess which plan offers the best coverage for your needs.
Finally, decide how much you can afford to pay. If your dependents have health insurance coverage through their employer, school or the Veterans Administration, compare their costs and benefits to the family plans you are considering to ensure that you choose the best plan for every member of your family. Make the same type of comparisons for any dental or vision care plans that you are offered.
More Information
Contact your state insurance department if you have questions about your insurance company or the information it sends to you after you sign up for a plan. They may also be able to assist you in buying a plan from the exchange, or you can check out this consumer alert from the NAIC.
For more information about your changing insurance needs and tips for choosing the coverage that is best for you and your family, visit InsureUOnline.org.
About the National Association of Insurance Commissioners
As part of our state-based system of insurance regulation in the United States, the National Association of Insurance Commissioners (NAIC) provides expertise, data, and analysis for insurance commissioners to effectively regulate the industry and protect consumers. The U.S. standard-setting organization is governed by the chief insurance regulators from the 50 states, the District of Columbia and five U.S. territories. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer reviews, and coordinate regulatory oversight. NAIC staff supports these efforts and represents the collective views of state regulators domestically and internationally.