Personal finance experts reveal their health insurance shopping secrets
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Does buying health insurance feel like you need to learn another language or join a secret society or decipher a black box where you don't know the questions you should be asking, nevermind the answers you should be looking for? It can definitely feel that way sometimes, but we've got two secret weapons to help you out: the new PolicyGenius health insurance app and advice from top personal finance experts.
With the PolicyGenius app, you can cut through industry lingo, line up all your must-have and nice-to-have features to meet your coverage needs, and apply online. And with tips from some of the most popular personal finance experts online -- with years of experience in buying their own health insurance -- you can get that little extra bit of guidance you need before Open Enrollment ends on January 31st.
We narrowed their advice down to their top 5 secrets, which are sure to make your health insurance shopping enjoyable - or at least painless - this year.
When it comes to health insurance, your finances play a big role in your coverage. But your health does, too - and they're related. That's why My Fab Finance's Tonya Rapley stresses that you need to understand both.Let's look at your premium - the amount you pay each month, no matter what - versus your deductible - the amount you need to pay before your insurance kicks in. These two costs are the inverse of each other. If you have a high premium plan, you pay more upfront but your insurance starts covering things earlier; if you have a high deductible plan, you'll pay less each month but when you go to the doctor, you'll be footing the bill for a longer period of time.You might think this is just about when you want to pay for healthcare, but it's also about your health lifestyle, too. For example, if you're a relatively healthy person who sees the doctor a few times a year for checkups, it's probably cheaper to get a high deductible plan. The amount you pay for healthcare may be less that what you would've paid in premiums.On the other hand, if you're planning on getting pregnant, you know you have a surgery coming up, or you have a medical condition that requires lots of medication or tests, those costs will add up quickly. You might not want to pay for a high premium plan, but you'll hit your deductible quickly and save over the course of the year.Chelsea Fagan of The Financial Diet says to be honest with what you do, and that includes being honest with your situation. The cheapest upfront plan isn't always the best option; you need to take a holistic view of your health and your finance to see what makes sense for you and your budget in the long run. Paying more each month could make your plan more affordable overall.
When's the right time to buy health insurance? We'd like to say "anytime" but you're actually limited to a 3-month period called Open Enrollment - which runs from November 1, 2016 to January 31, 2017 this year - to buy it unless (you have a special circumstance).
Grayson Bell of Debt Roundup](http://www.debtroundup.com/) says, "don't wait," and he's right! In order to have health insurance in 2017, you need to buy it by the end of January; if you want it to kick in on January 1st, you need to buy by December 15th. And waiting until the end of Open Enrollment to start shopping for health insurance means you'll likely be caught up with millions of others, dealing with long hold times on the phone and overtaxed websites.Unfortunately, if you instead decide to "just skip it this year," you'll subject yourself to the individual mandate penalty. That's a tax fine that's either $695 per adult or 2.5% of your annual income - whichever is higher. Yep, that means you're paying without actually getting any health insurance coverage.
There are a few special enrollment periods throughout the year called, appropriately, Special Enrollment Periods. These occur when there are changes to your life that require new health insurance and let you buy even when it isn't Open Enrollment. Special Enrollment Periods include things like having a baby, losing your job where you had employer-provided health insurance, and moving to a new zip code where you may need to look for a new plan.So Grayson is right: don't wait! Besides the financial implications, you just don't know what the future holds. Why put off protection?
Do you know which of your doctors are in your network? What about whether or not you need a referral to see a specialist? Or what about which prescription drugs your plan covers, and which are generic - or not covered at all? These are the costs that can add up throughout the year.Money Peach's Chris Peach bring up prescription drugs and making your medication is covered by your plan. That's definitely important: If a medicine you need isn't on your plan's drug formulary, you could end up paying a ton. But you need to know all aspects of your plan - and of health insurance in general - to make the right choices.We recently took a survey of 10 of the largest cities in America to see how well they knew common health insurance terms. A lot of them thought they knew definitions for cost-related plan terms like co-pay, coinsurance, deductible, and out-of-pocket maximum. Turns out, most of them didn't.If you aren't educated about your plan, you don't know the true cost of your health insurance. Talaat and Tai McNeely, from His & Her Money, reiterate this, saying, "You want to make an informed decision." You need to know how much you pay each month versus when you'll hit your deductible. You need to know what your co-pay and coinsurance means for your bottom line. You need to know what's covered and what isn't, because that determines your health insurance costs for the year.A little research into health insurance in general, and your health plan in particular, can save you a lot of grief - and money - over the coming months and years. Before you sit down to buy a plan, sit down to educate yourself about what providers and plans are in your area, what your "must haves" and "nice-to-haves" are that are covered, and what your healthcare budget is for the year. You won't regret it.
Your premium and deductible isn't the only part of the health insurance balancing act. Money Under 30's David Weliver says that there are always tradeoffs, and knowing those tradeoffs can help you find an affordable plan.For example, you need to make sure your doctor is in your network. An HMO is strict about which doctors you can visit, but is also a lot cheaper than a more flexible PPO plan. Of course, if you have to drive 45 minutes to get to a doctor that's in your network, is that worth the savings to you? Or let's go back to the prescription drug issue. A brand name drug will be more expensive than an otherwise-identical generic drug. Do you care which one is covered by your plan? That's up to you, but it'll affect how much healthcare costs you.
"You have choices," says David Auten of Debt Free Guys. There are a lot of options for health insurance plans out there; thanks to the Affordable Care Act, a lot of things shoppers used to worry about are gone: all plans come with free preventative care, essential benefits, and protect against pre-existing diseases. That means you can focus on the choices that matter to you, like convenience, affordability, and what makes you comfortable.
Tonya from My Fab Finance wraps this all up nicely: You might think you can't afford health insurance but what you really can't afford is to not have it.But the thing is, you can afford health insurance. More than 70% of shoppers can find a plan for under $75 a month, and 2.5 million people are eligible for federal subsidies that they aren't using. A lot of people hear the health insurance horror stories, but that doesn't mean yours has to be one.And it's true that you can't afford to not have health insurance - literally. 60% of personal bankruptcies are due to medical bills. Without health insurance, you're asking for trouble.Everything we've talked about - the tradeoffs, knowing your plan, narrowing down your choices - all lead to a more affordable plan and more affordable protection. It's important to be informed about them, which is what we've done with the PolicyGenius health insurance app: All of the information explained to you, upfront and transparent.Image: Matthias Ripp
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