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5 things to look for in a health plan under Obamacare

When the major changes in the Patient Protection and Affordable Care Act (ACA) take effect in 2014, an estimated 25 million Americans will be looking to buy their own health insurance coverage.

For some, enrollment will be forced on them when their employer drops their coverage; for others, the federal government will force them to enroll.

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For almost all of them, choosing a health plan will be a new, complicated and difficult experience. Consumers remain confused about health care system changes, concludes research by CVS Caremark.

Here's a crash course in what you need to know.

Game changer

In June, the U.S. Supreme Court upheld the ACA, often called Obamacare, which requires everyone to have health insurance or pay a "penalty," with some exceptions. For more information, see You must buy health insurance . . . or not.

A Republican victory in the November presidential election would likely spark another attempt to overturn the act, but only if the GOP can also control both the House and Senate. Some of the 170 million workers now covered by employer-sponsored plans could lose their health insurance in 2014 or the ensuing years, if companies determine that it is more cost effective to pay a $2,000 federal penalty for not providing coverage than spending an average $10,000 per worker to provide it. That would force workers to find their own coverage.

Generally, employers plan to pass on the additional costs of health reform to workers, in one form or another, concludes a survey of more than 2,300 employers conducted by Willis Group Holdings, a global insurance broker.

Consultants such as McKinsey & Co. estimate that three out of 10 employers are considering dropping their health plans.

"Morality won't enter into it," predicts Sam Geraci, director of corporate strategy at insurer Liberty Mutual.

Choosing a health insurance company

Whether you're buying health insurance through your employer, on your own or through a health insurance exchange or broker, there are fundamentals you'll want in a health plan.

Bob Carey is principal of RLCarey Consulting, an independent health and welfare benefits consulting firm. In 2006, he helped set up the Massachusetts health insurance exchange, known as the Connector Authority, which now consists of eight insurers. Here are his criteria for choosing a health insurance company:

  • Your current health care providers should be covered in the insurer's network. This means not only your primary care physician, but also any specialists you see on an ongoing basis. If you need surgery, make sure that any ancillary specialists, such as an anesthesiologist, are also in-network. "Otherwise you wake up with a $5,000 bill," says Carey.
  • The health care services you use most should be covered. Examples are dialysis for kidney function, blood work as needed for hyperthyroidism or hypothyroidism, and brand-name medications if you cannot substitute generics.
  • The annual cost should be affordable. If you use a lot of medical services, a low-cost plan may be penny-wise and pound-foolish since a cheaper plan will likely have a higher deductibles and/or copayments.
  • Your insurer should be stable and reputable. Find out how long the insurer has been in business. Identify the best health insurance companies by looking at customer satisfaction ratings. When insurers spend too much on nonmedical services, they now have to issue rebates to customers, and disclose it publicly.
  • Your insurer should be responsive to your questions even before you sign up. Don't be afraid to call. Go online to see if the carrier has a website that's easy to use. Carey says that what people most want from Obamacare is for insurers to offer short descriptions of benefits and coverage that are easy to understand.

Anticipating higher medical costs

Even after you sign up, you'll want to monitor your health plan each year because it's likely that costs will rise and services will change. Hospitals are already buying up medical practices and services. Critics say the new regulations will create a barrier discouraging new entrants from coming into the medical market.

And as more people get health insurance, the supply of doctors won't keep pace, says Liberty Mutual's Geraci.

More from Ed Leefeldt here

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