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Health insurance in the United States is undergoing radical changes due to the Affordable Care Act (ACA) and its many provisions. From October 2013 going forward, the market will be vastly different from what we presently accept for underwriting rules, premium rates, and coverage.Several healthcare coverage options will disappear, like limited benefit plans from private insurers, state risk pools, and the temporary federal risk pool option.

A brand new source of individual and small business insurance will be available, as well, if you trust a last-minute government affair touted to provide better services than the private market – the insurance exchanges. Though these new policies should be helping Americans get more out of their health plan than ever before, including tax credits to lower premiums, many states have yet to establish their program.

Enrollment for health insurance exchanges will begin in October for the coming year, when the new healthcare law kicks in fully.

New Options: Choosing A Plan Under Health Reform

The health reform law is inescapable at this point: whether you’re not quite sure it’s going to work, hoping for the best, or weren’t on board to begin with, insurance options will vary greatly from previous years.

Let’s start by looking at how the private market will change, and your options therein. Then, we’ll explore the new choices in public health care, including Medicaid expansion and the government-sponsored individual plans on the exchange:

  • Individual Plans

    Nondiscrimination laws under the ACA are adjusting underwriting rules such that insurers can only rate up for age and tobacco use, and must accept all applicants for coverage despite their risk. Benefit requirements will also change, as health plans must offer certain products that meet state and federal compliance for “essential health benefits.”

    For consumers, the advantage is getting accepted by reputable major medical insurance companies instead of resorting to a public plan when you get obscene rate-ups or declined completely. The downside is that we currently have no idea how much premiums will cost next year, and it may get interesting. Industry experts project that low risk policyholders could take on the financial risk of the freshly accepted sick plan members, resulting in unjustly higher premiums for certain groups. Some insurers may allow you to extend your current individual plan for another year without conforming to health reform laws, however.

    Those who support the law feel this projection about rate increases is an exaggerated figure and simply another complaint from the health insurance industry about healthcare reform. Either way, no one can be sure how the law will affect premiums in 2014, though the feds are firmly reassuring the public that rates will stay reasonable.

  • Employer-Sponsored Coverage

    One solution is to stay on your group plan, if you have that preferable choice. These plans are also subject to change, as the new law requires more active utilization of wellness programs to improve health, within reason. Wellness programs through group insurance will be more involved, making sure individuals with health problems are seeking the free help their plan is providing. However, the employer cannot offer a wellness program that is too strict or unrealistic, in order to maintain fairness.

    Not very much will change in terms of benefits and cost sharing, therefore you may have a potentially easier time than others in paying for and using your coverage. Employers are required to offer a certain set of benefits, to all full-time employees, if they were not already under the law. This has caused many larger corporations (mostly food franchises, such as Olive Garden) to attempt hiring more part-time workers in order to avoid lost income, though they found little success. If your job does not offer sufficient coverage, you can enroll in an individual plan or exchange plan.

    Employers also have the option of offering their workers a voucher for an exchange plan in an equivalent amount to the highest amount of coverage they offer, which certain companies seem hesitant to use.

  • The Online Marketplace

    Health insurance exchanges are operated either by each state or the federal government, providing individual and small business plans with benefits similar to a comprehensive group health plan. These plans will include every category of essential benefits (hospital, prevention, maternity, emergency, prescriptions, pediatric, mental health, etc.) and be eligible for use with tax credits to lower premiums.

    Expecting to insure the millions of people who don’t qualify for Medicaid yet can’t afford a private health plan, exchanges will be open to anyone who wants to test them out. If you want to have a child next year, are still unable to pay for a private plan, or want access to some form of care your insurance doesn’t cover, these are your back up plan.

  • Medicaid Expansion

    If your income is very low, but you haven’t been able to make the cut for Medicaid in the past because you don’t have children or a disability, your time has come. In many states, the Medicaid program will accept a new eligibility group in order to insure a wider population of needy individuals.

    Those who make up to 138 percent of the poverty guideline will be able to receive free and low-cost healthcare through their state’s public assistance program. 25 states presently plan to implement this provision.

Determining The Most Affordable Plan

Which coverage will actually save you the most money? It depends on what you qualify for. If you’re eligible for Medicaid, you won’t pay anything for coverage, which is clearly your best bet.

As the window of Medicaid eligibility is small compared to the country as a whole, individual plans through an insurer or the exchange may cost about the same, although no one is certain. The government is currently guiding consumers toward exchanges and subsidies as the most budget-friendly route, which may be true. Until we know how much individual health plans will cost on the private market, through trusted insurers like Aetna, UnitedHealthcare, and Blue Cross and Blue Shield, we will technically be unable to determine the answer.

Before the new health plans are offered through private insurers, exchange plans will have already been released, getting a head start when enrollment begins in October 2013. If you stay on your employer’s plan, you have the right to compare prices with the exchange and individual insurance if you find a better deal. At the time, it does seem the exchanges may be the most cost-effective, especially for those who are just barely over the Medicaid requirements. This population will likely be unable to afford coverage on the private market, and it will help insure this group of earners.

Whether or not you want to buy your health insurance from the government is another factor. The tax on being uninsured will be far less than the cost of coverage, so you still have a choice if you prefer paying for medical care out-of-pocket and avoiding the system.