Guest Post By: Colleen McGuire, VP of Communications at Healthcare.com
Full disclosure – this article is about health insurance. Yes, dull, even yawn-worthy health insurance. But before you click away because you think this article will be a snoozefest, you should know this could be the best financial advice you’ll get this week.
First, here are a few little-known facts about healthcare plans to get you thinking:
- If you buy your own health insurance plan, you should almost never automatically re-enroll in your healthcare plan year after year. It can cost you up to $700 more on an annual basis sticking with the same plan.
- It is illegal to be uninsured. There are exceptions, but the majority of individuals must have health insurance or they will be fined by the government.
If you’re wondering why you have never heard of these rules, you’re not alone. More than 40% of Americans do not realize they face a tax penalty if they don’t have health insurance. And nearly half of those who had a health insurance plan in 2014 let it auto-renew for another year without price shopping for a lower cost plan.
To get you on the fast track of financial healthcare protection before the medical bills start to arrive. You need to think about these top five considerations.
1. Review health plans side by side. Most individuals have an average of 30 health insurance plans to choose from, so it’s important to compare price, and every out-of-pocket cost you could incur that comes from a deductible, copays and coinsurance. A $100 a month health insurance might look attractive on paper, but if you have a health condition or take several prescription drugs, a richer plan for $225 a month that pays for more care could actually save you money in the long run.
2. Research the big words. Most individuals don’t know the ins- and outs of health insurance terminology, which can lead to surprise medical bills. Do the math in advance. If the healthcare plan you are interested in has 80% coinsurance on inpatient hospital care, that means you will have to pay the remaining 20% of medical services. If you know you will have at least one hospital stay during the year, add that 20% estimated expense into your total out of pocket calculation when comparing plans.
3. Check the network. If you are committed to one doctor, clinic or hospital, make sure they are “in-network” so you don’t pay out-of-network prices, which cost more than in-network pricing. Even if you don’t have a regular doctor in your area, provider networks can vary in size. The insurance company you are considering should be able to tell you which network covers your doctor, clinic or hospital, and how big of a region the network covers, should you not have a set doctor in place.
4. See if you qualify for help from Uncle Sam. More than 87% of Americans who have health insurance through the federal marketplace qualified for a financial subsidy to help with the overall cost of their health insurance in 2015. Many states are reporting that the average health insurance customer is paying around $100 a month for a healthcare plan. If you accurately report your income for the year when applying for a healthcare plan, there’s little downside to taking a subsidy to help with your health insurance costs.
5. Don’t be illegal. Remember that little known fact from early in this article? Having a healthcare plan is required by most Americans, and can result in a fine of $325 per person or 2% of your income for 2015, whichever is higher. That equates to approximately $1,500 in fines per family. The fee is applied to your income taxes, so if you expect a refund every year but don’t have health insurance, you could wind up paying the government instead of the other way around. The fine goes up to $695 per person in 2016, or 2.5% of your income.
One last quick tip – if you already have health insurance but have a “life event” this year, you could qualify for a special open enrollment period to change your health insurance plan. A qualifying life event includes losing your health insurance coverage from your employer, getting married, getting divorced, having a baby or adopting a child, moving to a new ZIP code or having a change to your reported income level that impacts your subsidy. If one of these events happens to you, it’s an excellent time to look at your potential medical expenses in the coming months and review your healthcare coverage.
Once you have your health insurance ID cards in hand, you can continue saving on your medical bills by using services like SaveOnMedical.com. It’s vital to your healthcare finances to be an advocate of your health care every step of the way, from health insurance purchases to procedure price shopping to understanding your medical bills to ensure they are accurate. You, the consumer – the patient – are always in control.
This information is courtesy of HealthCare.com, the nation’s leading health insurance search engine and comparison tool.