There’s no doubt about it—health insurance is complicated. With the yearly Open Enrollment Period running right now, it’s time to take stock of your health coverage and think about what health plan you want for next year for yourself and your family.
Your choice may impact your finances, so let’s walk through six common misconceptions some folks have about individual health insurance plans.
Misconception #1: Under the Affordable Care Act, all health plans are the same.
While it’s true that many health insurance companies offer the same health plans on and off the Marketplace, and that those plans must all include 10 essential health benefits, there are still differences among plans. The health care providers in each plan’s network can vary, as well as the extra services and programs that are included. You’ll want to check the provider network list to make sure the doctors and other health care practitioners you like are included. Discount programs for things like prescription eyewear and hearing aids can also be a big plus, so look for those as well.
Misconception #2: If I don’t like my health plan, I can drop it and sign up for another one anytime.
No, you can’t. There are situations where losing your health coverage triggers a Special Enrollment Period, but voluntarily dropping your health plan is not one of them. If you stop paying your premium and lose your coverage, you’ll have to go without health coverage until the next Open Enrollment Period. Going without coverage means you have to pay full price for health care.
Misconception #3: The cheapest health plan is fine for me.
A low premium is great, but it’s important to look at what kind of coverage you get for that low premium. Many cheaper plans leave you on the hook for large percentages of medical bills when you need health care. For example, a Bronze-level health plan requires you to pay for 40% of your health care. If you need a $2,600 MRI, that 40% responsibility could cost you more than $1,000 out of pocket. Take a look at what different metal categories cover. Your health plan choice should reflect how comfortable you are with the level of risk you’re willing to take on.
Misconception #4: I’m healthy. I don’t need health insurance.
If you go without health insurance, you’re taking a big financial risk. Medical issues are the leading cause of bankruptcy in America. Two-thirds of bankruptcies are related to medical issues, either because of expensive medical bills or time away from work. If you have an accident or develop a health issue, your financial situation could spiral out of control quickly.
Misconception #5: It doesn’t matter if I enroll through a health insurer or the Marketplace.
While it is true that most health insurance companies offer similar plans on and off the Marketplace, the only place that you can qualify for the Advance Premium Tax Credit is the Marketplace. This tax credit can lower the amount you pay for your health plan premium each month. If you like saving money—and who doesn’t?—you’ll want to see if you qualify for the credit.
Misconception #6: I got laid off due to COVID-19. I thought I’d be going back to work, so I didn’t sign up during my 60-day Special Enrollment Period. Instead, I ended up unemployed, so now I have to go without coverage.
You can still sign up for coverage! Because the Federal Emergency Management Agency (FEMA) declared COVID-19 an emergency, anyone who qualified for a Special Enrollment Period at any point since the beginning of 2020 and was prevented from enrolling due to COVID-19 can now apply at any time. The application must be completed 60 days after starting it, however.
Plan for now and tomorrow
There are many considerations when selecting individual health coverage. Take stock of your health and financial situation now, and then think about what may change over the next year. Your health insurance choice is important!
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