Navigating the process of purchasing health insurance is confusing and frustrating for the average consumer, especially given the current volatility of the health care industry.
As a licensed Virginia life and health insurance agent since 2006, I personally have seen numerous drastic and frequent changes within the industry, especially as they impact those insured through the Federal Marketplace. Now, with the impending withdrawal of Anthem from the exchange in January 2018, nearly 34% of those insured in the Commonwealth through the federally facilitated marketplace will have to find new coverage in 2018.
As a refresher, President Obama signed into law the Affordable Care Act (ACA) on March 23, 2010, which created the health care exchange. Since then, procedural changes made to the law by subsequent legislation have focused on provisions to expand coverage, control health care costs, and improve health care delivery system.
It can all be very unnerving to the average consumer. Many of the clients I work with, however, have one simple question: how can I contain costs and maintain a level of care for my family or me?
The first step to answering that question is to pull together some basic information: income, age, family needs, and current state of health. Do you currently take prescriptions medications or seek regular treatment for a health condition? Are you in need of an individual policy or are you seeking family coverage? What is your annual household income? What were your medical expenses in previous years?
During this process, keep in mind that you can only enroll in a new plan or change an existing plan during the open enrollment period (unless you qualify for a change of life exemption, such as marriage or birth of a child). Open enrollment for 2018 begins November 1, 2017 and end December 15, 2017.
After you’ve taken inventory, you’re ready to explore Marketplace plans, which are divided into categories according to how they split cost (known as the Metal Tier categories).
Bronze plans: on average will cover 60% of medical costs. This tier has the lowest premiums but will have the greatest out-of-pocket expense at the time of a claim.
Silver plans: on average will cover 70% of medical costs.
Gold plans: on average will cover 80% of medical costs.
Platinum Plans: on average will cover 90% of medical costs. This tier has the highest premiums but will have the lowest out of pocket expense at the time of a claim.
When you apply for one of these plans through the Health Insurance Marketplace, you estimate your expected income for the year. Based on your income, your premium for all of these plans can be lowered through use of a Advance Premium Tax Credit (APTC).
If you qualify for a premium tax credit based on your estimate, you can use any amount of the credit in advance to lower your premium. If at the end of the year you’ve taken more premium tax credit in advance than you’re due based on your actual annual income, you’ll have to pay back the excess when you file your federal tax return. If you’ve taken less than you qualify for, you’ll receive a refund.
While it all sounds simple, a licensed health insurance agent can help you find the policy that fits your needs and budget. The best part of using an agent is that the service is of no cost to you. We are paid by the insurers to help consumers like you find the best plan.
Brandon Sholar is a licensed Commonwealth of Virginia life and health insurance agent serving Hampton Roads since 2006. He is certified by the federally facilitated Marketplace.