Open Enrollment Survival Guide: How to Shop for Individual Health Insurance

It turns out that over 88% of Americans choose the wrong plan and end up wasting more than $500 a year. Before you sign up for a plan, it’s important to understand your options, understand the health insurance market and read the fine print.

Here are a few tips from Take Command Health to help you save money on health insurance during open enrollment. And remember, you have until December 15, 2018 to enroll in a plan for 2019 coverage.

1. Shop around every year
It’s tempting to want to stick with one plan out of convenience, and the thought of trying something new can be intimidating. Unfortunately, health insurance isn’t something that should be put on auto-pilot. Plans, doctor networks, prescription coverage and your family’s health needs are changing every year. Not to mention, the market is changing significantly due to several emerging trends: narrowing provider networks, rising premiums, insurers leaving the exchange and offering off-exchange only plans. What was great for one year may be terrible the next, and insurance companies are frequently shifting things around to maximize their earnings—not necessarily your health.

Here are a few things to keep in mind:

  • NEVER let yourself get auto-renewed in a plan: 80% of plans will have a significant change each year that you may not be aware of.
  • If you’re leaving a company and COBRA is an option, 99% of the time, COBRA is a bad deal. Don’t just accept it because it’s easy. You can be billed for up to 102% of the total cost of coverage; 100% of the cost of your previous plan plus a 2% administrative fee!

2. Look at ALL of your options
There are several ways to purchase health insurance. When you shop at Healthcare.gov, you’re only seeing “on-exchange” plans. However, insurance companies only make a fraction of their plans available “on exchange.” If you go directly to an insurance company’s website, you’ll see their “off-exchange” plans. There are also private exchanges, co-ops, faith-based “medical sharing” plans (also see this article), and even short-term plans that function similar to insurance.

3. Estimate your out-of-pocket expenses
Statistically, over 75% of your costs in the next year are predictable based on your known needs. What really drives costs, and your plan choice, are the things you know about: prescriptions, doctor visits, therapy, medical equipment, etc. If you’re healthy, maybe you don’t plan on using any of these things–which is just as important to know.

4. Take advantage of tax credits, HSAs, and HRAs
One way to pay too much for health insurance is to leave money on the table. Many individuals assume they’re not eligible for tax credits when they actually are. Depending on where you live, a family of 3 or 4 that makes $90,000 a year will likely qualify for a tax credit.

If you do make too much money for a credit, then you should probably consider using a Health Savings Account (HSA), like the Lively HSA we offer for free with our premier membership. HSAs allow you to pay for your care with tax-free dollars. For high-earners in a higher tax bracket, that’s like a 30 to 35% discount on health costs!

Another relatively recent tax-advantaged strategy if you work at or own a small business is a QSEHRA (Qualified Small Employer Health Reimbursement Arrangement). Efficient, flexible, and predictable, this allows a small business employer to reimburse for premiums and medical expenses tax-free while the employees choose their own individual plans. It’s not surprising this strategy is gaining so much popularity across the country!

To learn more about which HRA is right for your business, head on over to the Small Business HRA Strategy Guide to learn the best way to optimize your tax advantages.

5. Keep your doctors “in network”
Keeping your favorite doctors “in network” is critical to saving money. If you try to see a doctor that is out of network, your health plan won’t help very much or may not pay anything at all. Many people are familiar with “PPOs” and “HMOs” but there are actually several options in between that are worth considering. While PPOs provide the most flexibility, they are also the most expensive. If your doctors happen to be in an HMO or if you don’t have preferred doctors yet, the HMO can be a great money saving choice. These aren’t the HMOs of the past with long lines and long wait times. You can get referrals online (check with your provider), and going to see some specialists (like an OBGYN) no longer requires a referral.

Get covered
To see all of your options side by side, head on over to Take Command Health and their data-driven platform to find the best plan for you and your family.

Article by Amy Skinner from Take Command Health