Navigating Obamacare Open Enrollment in 2016

By Scott Glovsky on November 2nd, 2015 in Insurance

Despite the availability of subsidized health insurance through the Obamacare exchanges, there are still 10 million eligible Americans who have not enrolled in any health plan. A lot of this is the result of a process that can be intimidating and a general lack of information. This article is one resource for guiding those who are purchasing for themselves, as opposed to insurance that is provided by an employer, as the open enrollment period for 2016 insurance plans is opening soon. If you are a person who purchases insurance for themselves then you will soon have to decide whether to renew your current health insurance or purchase new health insurance for 2016.

Open Enrollment is the time period in which you can choose a new health coverage plan or policy. The Open Enrollment period for 2016 coverage begins on November 1, 2015 and ends on January 31, 2016. If you have not enrolled in coverage by January 31, 2016, then you will not be able to purchase new health coverage until next fall when the Open Enrollment period for 2017 will begin.

Since last year’s enrollment there has been one significant change to the process. This is the addition of a new cost calculator that is offered through the Healthcare.gov website and the state exchange websites like CoveredCA.com. This calculator will estimate the total cost of various health plans, including both premiums and out-of-pocket costs like deductibles and co-pays. This will allow you to estimate whether the plan with the cheapest premiums will actually save you money or not. There have not been any other significant changes to the process from last year but even if you enrolled last year it is important to review important pitfalls to avoid in enrolling so that you can again enroll in a plan that fits you best. What follows are hidden pitfalls to consider when enrolling:

THERE ARE NUMEROUS DIFFERENT TYPES OF PLANS

In order to make the best decision for you regarding a new health plan, you will have to recognize the varieties of health plans that might be available to you. This is necessary as the various types of plans provide for very different types of coverage. The most common types that you will encounter include Preferred Provider Organization (“PPO”), Health Maintenance Organization (“HMO”) and Exclusive Provider Organization (“EPO”) plans.

In PPO plans, members have choices. The members are allowed to receive covered access to a network of contracted providers. However, members can also obtain partially coverage for treatment and services from non-contracted providers.

In HMO plans, members must go to doctors who are in their plan’s network in order to receive covered care. Further, before members see a specialist they must get a referral from their general practitioner.

EPO are very similar to HMO plans. In an EPO plan, members can only receive covered care from contracted providers and cannot receive coverage generally for services provided by non-contracted doctors or hospitals. The biggest difference between an HMO and an EPO plan is that EPO plans allow members to receive coverage for services from in-network specialists without a referral from a general practitioner.

Keep in mind how these plans differ when it comes time to purchase a new plan.

BE CAUTIOUS OF MISLEADING INFORMATION ABOUT THE TYPE OF PLAN INTO WHICH YOU ARE ENROLLING

Understanding the types of health plans is not sufficient to guarantee that you will actually enroll in the plan that you want. Numerous clients have contacted us after insurers misled them into believing that they had enrolled into a certain type of health plan only to learn when it was too late that the insurer had sold them something else. Often, the members believed that they had purchased a PPO plan but were surprised to later discover that their insurer had actually put them into an EPO plan.

For this reason, it is safest to enroll either online or using a paper form instead of purchasing a plan over the phone or allowing your current insurer to simply put you into a new policy without any enrollment action by you. This should prevent the problem discussed above.

KEEP RECORDS OF THE IN-NETWORK PROVIDER LISTS

It is especially important to take the time to examine the provider lists for any type of health plan before you enroll, particularly if you are interested in an EPO or HMO. However, numerous clients have told us about how they confirmed over the phone and on their insurer’s websites that all of their doctors and hospitals were in-network before enrolling. Yet, after the enrollment period they learned that none of the doctors or hospitals were actually contracted providers. Consequently, you should always take screenshots of all of the insurance company webpages confirming the contracted provider status of your doctors and you should request written confirmation from phone representatives that your doctors are contracted providers before enrolling in a new plan. Keeping substantial notes, including the names of the people with whom you speak with and the dates and times of those conversations is also helpful. If your providers are not available in any available plan’s networks, then you should explore the possibility of enrolling in a group plan.

BE WARY OF CONFUSING DEDUCTIBLES

When exploring your health plan options, put special attention to the deductibles that the plans offer. A deductible is the amount of costs that you must pay out-of-pocket before an insurer will pay any expenses. Always figure out what payments each health plan counts towards the deductible as some health plans do not consider all member payments when deciding whether a member has met their yearly deductible or not. The way that the health insurer makes this calculation can substantially affect the payment that you might have to make for health care.

LOOK OUT FOR HIDDEN DEDUCTIBLES

Similarly you should be cautious of the types of deductibles that a plan might have. Some plans differ in the deductibles that they have for specific services. For example, some health plans implement a deductible for services but have another one for prescription drugs. Discover what types of deductibles a plan includes before you purchase that plan so that you can sufficiently compare it to other health plans in your exchange.

CAUTIOUSLY LOOK AT PRESCRIPTION DRUG FORMULARIES

Insurance plans often provide different coverage for different drugs. Consequently, it is important to review the different prescriptions that each plan covers before purchasing a plan to verify that the plan you buy covers all of your medications. If none of the plans in your market offer sufficient coverage for medication, contemplate enrolling in a group plan.

IF YOU ENROLL OUTSIDE OF EXCHANGE THEN YOU MAY NOT RECEIVE TAX CREDITS

If you do not purchase directly from a health insurer but instead purchase health insurance from your state’s exchange, you may then qualify for a tax credit. This is a tax credit designed for people who have low or moderate income and to help them afford health care. You are eligible for the tax credit if you:

Buy coverage through your state’s insurance exchange;

Have a household income that is between 100 percent and 400 percent of the federal poverty limit for your family size;

Cannot buy coverage through an employer that provides minimum value; and

Cannot receive insurance from a government plan such as Medicaid, Medicare, CHIP or TRICARE.

When you buy an insurance plan through the exchange, the exchange will estimate the amount of tax credit for which you are eligible. However, if you buy your insurance straight from an insurance company, then you will not be able to get the credit. Many insurers offer the same plans (albeit possibly with different names) on and off of the state exchanges. Therefore, you have no reason to purchase your plan outside of the state exchanges.

YOU WILL HAVE MAXIMUM FLEXIBILITY IF YOU ENROLL EARLY

As you can tell from the above pitfalls, there are many different scenarios in which you can end up with a health plan that either was not what you wanted or not what you expected. For this reason, it is a good idea to enroll into a new plan as early as possible, allowing you the time to potentially switch health insurance plans if you discover problems with the plan that you chose.