Time Well Spent: Picking the Right Health Plan for 2015

By Dena Mendelsohn on Tuesday, November 18th, 2014

Picking a health insurance plan should be a part of everyone’s annual healthcare routine. Consumers Union can help make this hard decision easier. We have three tips to help you ask the right questions when choosing the health plan that’s best for you.

Do you want to renew your current health plan or make a switch?

If you bought your health plan through Covered California and do not want to change it, you will be automatically renewed into the same plan you had in 2014 (with some limited exceptions). Although being automatically renewed seems like an easy option, it might not be the best choice for you. It’s likely that the plan you had in 2014 will be more expensive in 2015. It may also have a different network of providers. If you received a premium tax credit in 2014 and think you might be eligible for one in 2015, you should compare to see if the plan you have now is still the best choice for you and your family. You can apply your premium tax credit to whichever plan you prefer in 2015. Also, if your income or a family member’s income will change in 2015, the financial help you are eligible for might be different. It’s worth taking a second look to make sure you get the best plan for 2015.

Compare the costs

When researching your plan, don’t just look at the monthly premium. That’s only one element of the overall cost of the plan. It’s also important to take a close look at the deductible, co-payments (or “co-pays”), co-insurance, and out-of-pocket maximum – collectively called “cost-sharing.” (For a glossary on those terms, click here.) It may seem more affordable to buy a health plan that has a low monthly premium, but look also at how much you will have to pay each time you visit the doctor or have to buy prescription drugs.

Consider any financial help you qualify for: depending on your income, you may be eligible for premium tax credits to help lower the cost of your monthly premium. These premium tax credits are only available if you get your health plan through Covered California. You may also be eligible for cost-sharing reductions (discounts that lower the amount you have to pay when you visit the doctor or purchase your prescriptions) depending on which tier plan you choose. Cost-sharing reductions lower your costs, but only if you buy a Silver plan in Covered California.

Know your network

Your provider network –the list of doctors, hospitals, labs, pharmacies, and other providers who contract with the health plan–will depend on what plan you purchase. If there are specific doctors you want to see in 2015, check which health plans include them in their networks. If you plan to purchase through Covered California, confirm that your doctors are in their Covered California health network. While there is no comprehensive provider directory on Covered California’s web site, plans have them available on their web sites. If you already have a relationship with a doctor you like, talk with him or her about which plans s/he will accept in 2015.

Getting care from outside of your network could be a costly mistake: you might end up paying much higher co-payments or co-insurance or, worse, paying the whole bill yourself.

The type of plan you purchase will determine whether you need a referral from your primary care physician to see a specialist or other provider, or if you can see a provider outside your network at all. In some plans, you can only use doctors, hospitals, or pharmacies that are in the network. The plan will not pay if you use a doctor or hospital that is “out-of-network.” You will have to pay the full cost yourself. Health maintenance organizations (HMOs) and Exclusive Provider Organizations (EPOs) are examples of plans that don’t pay for out-of-network doctors or hospitals. (There are exceptions, of course, including for emergency care).

Other plans will pay for some of the costs of out-of-network doctors or hospitals. However, they won’t pay as much. That means you will have to pay more. Plans that will pay for some of the cost of out-of-network doctors or hospitals are called Preferred Provider Organizations (PPOs).

For more information, check out www.HealthLawHelper.org, a tool created by Consumer Reports to help you navigate your health insurance options, this blog post on how to use your insurance, and Covered California’s Shop and Compare Tool, which assists Californians considering their options on the state’s marketplace.

One response to “Time Well Spent: Picking the Right Health Plan for 2015”

  1. Dick Neubert says:

    Premium assistance, like many entitlement programs (property tax rebate is another), are determined by Adjusted Gross Income. Problem for many of us is this: If withdrawals from a traditional IRA are a significant part of your AGI, the fact that the income is from 20-50 years ago is ignored – your perceived need for assistance is determined as if this were a limitless steady stream of income. Even if IRA withdrawals are only a small part of the total income, the IRA is used to make up the shortfall between other income and total expenses. Thus, total income = total expenses, including insurance premiums remaining after subsidy. This increase in “income” counts against you at tax time because it reduces the assistance you were supposed to receive, so now you have to pay the difference, which again comes out of your IRA and increases your “income” again,… This is a major bug in the system. Sure, some of this IRA income is yield on the investment, which could be justified as counting against entitlement, but we file Form 8606 every year that we contribute to the IRA, so the original basis is known and the fraction of present value which is basis versus gain is not difficult to determine. I might be on the wrong forum to bring this up, but it was the most pertinent one I could find. I think Consumers Union would be the best voice to bring about a change to this paradigm.

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