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The Top 5 Tips When Shopping for a Covered California Health Plan

While considering your health insurance options this year, it’s important to keep these tips in mind when shopping for a Covered California or private health insurance plan over the next two months.   The Affordable Care Act established an open enrollment period for individual and family health insurance plans which started on October 1, 2013 and goes through March 31, 2014.   People that don’t have coverage by then will most likely be subject to a penalty in April 2015 when they file their taxes for 2014.

If you don’t have coverage already, it’s time to get shopping California!

Here are our best 5 tips when shopping for a Covered CA or a private health plan:

TIP #1: Make sure your favorite doctors are in the health plans network.  California established its own health benefits exchange, called Covered California, in an attempt to make buying health insurance easier and to drive competition into the marketplace.  The thought was that if consumers could easily comparison shop among carriers with standardized benefits, this would drive costs down.  As a result, many health plans participating in California’s health exchange limited their provider networks, meaning that many doctors and providers that may have been in the same health plan’s network in 2013 may not be in 2014.  Read our previous blog post for tips on getting the provider you want.

TIP #2:  Comparison shop outside Covered California to explore all your options.   The only reason to buy a health plan in Covered California is if you are eligible to receive a premium subsidy.  The state run health exchange was set-up for primarily for people who receive a subsidy to buy a qualified health plan.    As we read in the previous tip, these health plans have limited their provider networks and offer limited choices.  The same carriers offering coverage in the Covered CA exchange offer the same plans and more choices outside of the exchange in the private market.    For example, both CIGNA and Assurant Health only offer health plans outside of the exchange and both offer PPO plans that are easy on the wallet.  To comparison shop both Covered California and private health plans, use a licensed insurance agent that is also certified by the state exchange.  A licensed and state-certified insurance agent, like the ones found at Affordable CA or at Healthy Halo, can show you the broadest choice of plans.

TIP #3:  Know the deadlines to enroll and when to pay. The Affordable Care Act established open enrollment periods with deadlines to get coverage.  The deadlines impact the date your coverage begins and when the window for open enrollment closes.  Failing to enroll by the deadline could mean a hefty tax penalty.

  • February 15, 2014 – the last day to enroll in health insurance for an effective date of March 1, 2014
  • February 28, 2014 – the last day to pay your first month’s premium to keep an effective date of March 1, 2014
  • March 15, 2014 – the last day to enroll in a health insurance plan if you want coverage to start on April 1, 2014
  • March 26, 2014 – the last day to make your premium payment to keep coverage starting April 1, 2014
  • March 31, 2014 – open enrollment closes.  This is the last day to enroll in a health plan for 2014.  You will need to enroll in a health plan and make your first month’s invoice by April 25, 2014 for coverage effective May 1, 2014.  You need to enroll in a health plan before by this date to avoid paying a tax penalty for 2014.

 

TIP #4:  Make sure to get the subsidies you are entitled to.  In order to make coverage affordable for many Americans, the Affordable Care Act set a maximum premium on the amount eligible individuals and families will pay for the second lowest cost Silver plan.  The difference between the actual premium of this plan and the maximum premium you pay is called a premium subsidy.  With your premium subsidy, you can use it to be a less-expensive, Bronze plan or more expensive Gold or Platinum plan.  In addition, individuals and families below a certain income level may qualify for Enhanced Benefits, also known as cost-sharing reductions.  The federal government pays more money on your behalf to lessen the out-of-pocket costs you pay when you receive medical care.  For example, decreasing your deductible from $2,000 to as low as $0 and limiting the cost for a doctor office visit from $45 to $3.   Watch our webinar to learn more about subsidies.

To determine if you qualify for a premium subsidy, use the Covered California Shop and Compare Tool or call a state-certified insurance agent, like the ones at Affordable California, to walk you through the entire process.

TIP #5:  Pick the type of health plan that works best for you.  Although benefits are standardized under the Affordable Care Act, there is one major difference besides price to consider when selecting a health plan – the type of plan.  Do you want an HMO, EPO or a PPO.  In a nutshell, a HMO is the least amount of flexibility and generally HMO plans cost less.  EPO plans offer a moderate level of flexibility and generally cost more than a HMO.   A PPO plan offers the most flexibility and can be the most expensive, although that is not always the case.  To compare plans and pricing, use a website like AffordableCA.com to shop and compare plans.

 

majeem@healthyhalo.com'

AUTHOR - Majeem M