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Health insurance basics

Open enrollment for the Marketplace and individual health plans is open for 2019.

Last day to make plan selections of changes is December 15, 2018. Coverage will begin January 1, 2019.

You're not alone if you're struggling to understand all the ins and outs of health insurance today.

Since passage of the landmark Patient Protection and Affordable Care Act in March 2010, the health insurance market has undergone its biggest transformation in decades. Not since Medicare was launched in 1965 have we seen so many changes.

A change for 2019 is that Americans will no longer be required to have health insurance or pay a tax penalty. It's still a good idea to get health coverage. 

How to get covered

You can get covered in a variety of ways, including through:

  • An employer-sponsored health plan at work.
  • A spouse's employer-sponsored plan.
  • A parent's employer-sponsored plan, if you're under age 26.
  • An individual health plan that you purchase. Individual health coverage can also cover your spouse and children. You can also get a plan through the Affordable Care Act (ACA) exchanges. 
  • COBRA continuation coverage. COBRA is short for the Consolidated Omnibus Budget Reconciliation Act, and it gives people the right to continue coverage through a work-based group plan after a job loss, death of a spouse, divorce or loss of eligibility for dependent coverage. COBRA lasts as long as 18 months. 
  • A government health plan, such as Medicaid or Medicare, if you qualify. Medicaid is the state and federal insurance program for low-income individuals and families. Medicare is for people age 65 and older and for young people with certain disabilities. In addition, the Children’s Health Insurance Program (CHIP) insures kids from low-income families.
  • Short-term health plans. Most Americans now have access to these plans. They offer limited benefits, but have low premiums. Short-term plans last a year, but members can request two extensions. 
  • Association health plans. Small companies and sole proprietors can band together and buy health insurance. These plans may be low-cost, but offer few benefits. 

health insurance explainedSince 2016, employers with at least 50 employees must provide health benefits to 95 percent of their full-time workers (those who work over 30 hours per week) or pay a penalty.  Coverage needs to be offered to workers and their dependents, but doesn't have to be offered to spouses.

If you don't have access to health insurance through an employer or through a government program, then you'll need to buy health insurance coverage.

When to buy

You can buy or change health insurance during open enrollment. Most Americans get their coverage through their employer. Businesses' open enrollment periods vary. Ask your employer about your open enrollment period. 

Medicare beneficiaries' open enrollment runs from Oct. 15 to Dec. 7. Medicaid doesn't have an open enrollment period, so you can sign up for a Medicaid plan anytime if you're eligible. 

The annual open enrollment period for individual and marketplace health plans runs from Nov. 1 to Dec. 15 in most states. Your new plan's coverage will start on Jan. 1, 2019.

There are a handful of states with longer enrollment periods: 

  • California – Oct. 15, 2018 to Jan. 15, 2019
  • Colorado – Nov. 1, 2018 to Jan. 15, 2019
  • D.C. – Nov. 1 ,2018 to Jan. 31, 2019
  • Massachusetts – Nov. 1, 2018 to Jan. 23, 2019
  • Minnesota – Nov. 1, 2018 to Jan. 13, 2019
  • New York – Nov. 1, 2018 to Jan. 31, 2019
  • Rhode Island – Nov. 1, 2018 to Jan. 31, 2019

If you buy after the Dec. 15 date in the states that are extending the enrollment period, you'll need to check to see when the coverage will start as most still require you to obtain your plan by Dec. 15 for it to start on Jan. 1, 2019. If you buy after Dec. 15 your plan's start date may be Feb. 1 or March 1, 2019.

What happens if you miss the deadline? Unless you have a special circumstance, you have to wait for next year's open enrollment period.

The special circumstances that qualify you to sign up outside the open enrollment period are known as a "qualifying life events." Such events include getting married, losing health insurance coverage, having or adopting a child, moving to an area with different health plans, or a household change that affects whether you qualify for financial help to purchase coverage.

You can buy a health plan through an insurance agent, directly from an insurance company or an insurance website, or through your state’s health insurance marketplace (aka exchange). But if you think you might qualify for government assistance, you should start your search at the health insurance marketplace for your state.

You could qualify for premium discounts in the form of tax credits if your household income falls below 400 percent of the federal poverty line (FPL). That is $100,400 for a family of four and $48,560 for an individual in 2019. These thresholds may be slightly higher next year. You may be eligible for a tax credit to reimburse you for your deductibles and other out-of-pocket costs if your income falls below 250 percent of the federal poverty line -- $62,750 for a family of four and $30,350 for a single person in 2019.

Bear in mind you can't get the discount or subsidy if you have access to affordable employer-sponsored coverage. And you must go through the marketplace to get the discount or subsidy.

Shopping the health insurance marketplace

Worried about cost? You might qualify for premium discounts in the form of tax credits or subsidies to lower deductibles and other out-of-pocket costs if you have a low or moderate income.

Some states run their own marketplaces; the federal government runs the marketplaces for other states through its HealthCare.gov site. Go to HealthCare.gov to find a link to your state’s marketplace, or call 1-800-318-2596 for information.

Through your state marketplace, you can apply for financial help, compare health plans available in your area and purchase a plan. Although operated by the government, the marketplaces sell private health insurance plans. You can also see if you're eligible for Medicaid or the Children's Health Insurance Program.

Health plans fall into four categories to make them easier to compare. The categories vary according to how much the insurer pays and how much you pay out of pocket for deductibles, copayments and coinsurance.

  • Bronze: You pay 40 percent of your costs on average; the insurer pays 60 percent.
  • Silver: You pay 30 percent; the insurer pays 70 percent.
  • Gold: You pay 20 percent; the insurer pays 80 percent.
  • Platinum: You pay 10 percent; the insurer pays 90 percent.

Catastrophic plans, which have higher deductibles than other plans, are available only for people under age 30 and for those who have a financial hardship.

Health insurance consultants, called navigators, can help you apply for coverage in the marketplace. But they can't tell you which plan to pick -- that's up to you. Assess your health care needs, consider your budget and compare the costs, benefits and provider networks offered by each plan.

If you don't qualify for discounts or subsidies in the marketplace, then compare health plans outside the marketplace as well. Some major insurers are not selling plans through the government-run marketplaces. Instead, they're marketing directly to consumers or through health insurance agents.

Most health plans sold outside the marketplaces meet the government's requirements for having coverage. However, insurance plans that cover only certain diseases, such as cancer insurance, and temporary or short-term health plans, do not count as sufficient coverage under the health care reform law. Those plans don't provide a full range of benefits, and they can deny coverage to people with health conditions.

Compare health plans

No matter what type of health insurance you get, make sure you compare the plans and check that your providers are in those plans. Some costs to compare include:

  • Out-of-pocket maximums
  • Deductibles
  • Copays
  • Co-insurance

Also, make sure you're comfortable with the health insurance plan. Health coverage is a personal decision. One person may not mind getting a referral from a primary care physician and stay within a network of providers. Another person may want more flexibility and the ability to see more doctors out-of-network. 

Once you're comfortable with the plans, know your doctors are part of the network and satisfied with the costs associated with the health plan, then you're ready to make a health insurance decision. Knowing the basics of health insurance is key in making that decision. 

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