How to Select a Tier Level Health Plan During Open Enrollment 2021

Fran
Dani Milton
August 3, 2020

The first half of 2020 has brought many unexpected, unprecedented changes to the United States because of COVID-19. Millions of people have lost jobs and insurance coverage because of the pandemic. Others have experienced unexpected health issues due to the virus. Later this year, Americans will have the opportunity to select new health insurance coverage when Open Enrollment 2021 launches this Fall. This year’s event takes place Nov. 1, 2020, until Dec. 15. For many people, it will be an excellent opportunity to sign up for new coverage or find plans that better suit their needs. In this article, you’ll learn several tips that will help you choose an Affordable Care Act plan that’s right for you.

Standardization of Coverage Leads to Better Options for Customers

The Affordable Care Act is a comprehensive healthcare reform bill passed in 2010. After the law’s passage, the federal government mandated insurers to provide value and scope for their coverage that meets standardization requirements. It helps individuals make more informed comparisons among the insurance options and pick plans that are best for them.

Insurers must provide a minimum amount of coverage for policyholders to satisfy the ACA’s central mandates. Under the Affordable Care Act (ACA), health insurance plans provide four metal levels of coverage: Bronze, Silver, Gold, and Platinum. These policies indicate how you, and your insurance company, will share costs. They have nothing to do with the quality of care policyholders receive. Each plan at every level must cover the same set of essential health benefits (EHB). Although the scope of benefits will be the same among all plans, their value will vary across each level. The federal government classifies them according to their actuarial value, benefits and cost-sharing percentages. Bronze plans are the least generous with the highest out-of-pocket fees for covered benefits; platinum ones are the most expensive with the lowest cost-sharing.

These metal tiers establish standardized levels of health coverage that people can sign up for through Healthcare.gov in the private marketplace or state-based exchanges. Insurers are not allowed to impose total out-of-pocket fees (deductibles, co-pays, or other cost-sharing forms) greater than the amount imposed by high deductible policies. For 2021, the cost limits are $8.550 for individuals and $ 17,100 for families. These figures represent a 4.9 percent increase from the 2020 OOP maximums of $8,150 for individuals and $16,300 for families. The limits apply to all OOP costs for in-network EHBs provided by non-grandfathered plans.

The ACA’s Ten Essential Health Benefits

The Affordable Care Act requires companies that sell insurance plans in the federal health insurance marketplace to provide ten essential health benefits (EHB). When selecting an ACA plan, make sure that it includes the following services:

Ambulatory patient services – This EHB, also known as outpatient care, is the top healthcare service Americans receive from doctors. Patients enter a physician’s office, receive medical treatment, and then leave. All ACA plans have to carry this coverage.

Emergency care –The law requires insurers to cover immediate treatment for health issues, such as heart attacks or strokes, in an emergency room. Insurers can’t charge out-of-network fees to their policyholders who didn’t get a pre-authorization for treatment.

Prescription drugs – In the past, insurance providers once charged a fee to provide pharmaceutical coverage. Under this legislation, plans should include drug coverage at no extra charge. Any shared costs also count toward out-of-pocket caps on medical expenses.

Hospitalization – Insurers must cover the costs of hospital stays, even though many people will pay some shared costs under the ACA.

Maternity and newborn care – Insurance companies have to offer maternity benefits, including prenatal care, preventative services, and childbirth. The ACA plans should reimburse medical treatment for newborn infants at no additional cost.

Mental health and substance use disorder services – All coverage has to pay for treatment for therapy with a psychologist for behavioral and substance use issues.

Rehabilitative and habilitative services – If you need rehabilitation for a medical issue, marketplace coverage should pay for your therapy. Some insurers will also pay for medical equipment, walkers, canes, knee braces, and wheelchairs.

Laboratory services – All ACA plans must cover preventative screening tests, including Pap smears, mammograms, magnetic resonance imaging scans (MRI) and prostate exams.

Pediatric services, including oral and vision care – All ACA plans must provide children under 19 years old dental and vision coverage.

Preventative and wellness services and chronic disease management – Some experts believe that preventative care for diseases can help lower the nation’s health care costs. Some providers provide free wellness visits with physicians to manage their health. The ACA also requires insurers to provide 50 preventive services recommended by the U.S. Preventive Services Task Force.

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The ACA’s Insurance Coverage Tiers

When shopping for health insurance, consider how much value each plan will provide you. The ACA marketplace currently offers four metal tiers of coverage that indicates their actuarial value. They tell shoppers how much financial protection policies offer. The actuarial value also reveals the percentage of cost that they cover for an average population. Actuarial values are different from the premiums paid by consumers. Premiums differ depending on the policy. Insurers base their actuarial values on their policyholders’ health statuses, the cost of negotiated medical services costs, and the management of patient services. For instance, policies that cover younger, healthier people have lower premiums. Those for older, sicker people tend to have more expensive ones. Additionally, health plans that manage their member services have lower premiums. The ACA has four actuarial values for their plans. These include:

Bronze: 60 percent

Silver: 70 percent

Gold: 80 percent

Platinum: 90 percent

The Average Costs Shared Under Different ACA Tier Levels

A plan’s actuarial value also represents how it shares average healthcare costs with a population of policyholders. For instance, under Bronze Plans, insurers cover 60 percent of health expenses, and their subscribers pay 40 percent. Insurance companies pay 70 percent of medical care in Silver Plans, and members pay 30 percent.

Unfortunately, average costs indicated by a plan’s actuarial value doesn’t always apply to every person. If a person has a serious health condition, their insurer may force them to pay more money, regardless of their ACA metal level.

In addition to these four coverage levels, individuals can purchase catastrophic plans that cover essential health benefits (EHB) but have high deductibles. These plans are generally reserved for healthier adults.

Types of ACA Managed HealthCare Plans

Shoppers should also consider how the insurance company manages their healthcare and shared costs under their plan. Americans can select from four types of managed healthcare plans under the Affordable Care Act. They include:

Preferred Provider Organization Plan (PPO)

– This option is popular with individuals and families who want greater freedom to choose their medical providers. The healthcare arrangement allows subscribers to visit any in-network provider without a primary care provider referral. Most subscribers will be responsible for a co-pay or coinsurance to receive services. PPO plans may be right for: Individuals who don’t want to get referrals from primary care providers to see specialists.

Members who prefer a choice to select medical providers that fit their needs.

People who need their out-of-network provider visits covered.

Health Maintenance Organization Plans (HMOs)

– Subscribed members will receive healthcare coverage for a monthly or annual fee through an HMO. Insurers contract exclusively with providers and hospitals to provide medical services for members at negotiated rates. Insurers limit coverage to medical care providers and facilities who have a contract with the HMO. These agreements help to lower premium rates, and they are generally cheaper than traditional health plans. When searching for an HMO plan, consider your premiums and out-of-pocket costs. If you have any specialized healthcare needs, make sure your plan covers it. They may be right for:

People who want ACA health insurance plans with low monthly premiums.

Individuals that require preventative care services.

Members who want a low-deductible ACA insurance policy.

People who aren’t concerned about having out-of-pocket limits on their medical coverage.

Exclusive Provider Organization Plans (EPO) – This coverage has lower premiums and healthcare rates than HMO and PPO plans. Under this coverage, members exclusively see in-network care providers, including doctors, specialists and medical facilities. Subscribers don’t need referrals to obtain treatment from physicians.

Insurers market EPOs toward people who don’t have extensive healthcare expenses and want to save money. Unfortunately, these policies won’t cover out-of-network providers. These plans work well for:

People who don’t want referrals to see a specialist

Individuals who enjoy seeing in-network preferred providers

Subscribers who require lower negotiated monthly premiums than what they would receive in HMO or PPO plans

Point of Service Plans

- POS – POS plans account for six percent of all individual and family insurance plans. They are hybrids of HMOs and PPOs. After enrolling, insurers ask members to select a primary care provider (PCP). This doctor will manage your healthcare and referrals to specialists. These plans may not cover visits to out-of-network providers. Policyholders may have to spend higher out-of-pocket expenses for covered services. A POS plan may be best for:

People who don’t mind having their care managed by primary care physicians

Individuals who prefer choosing from the insurance company’s in-network providers https://www.ehealthinsurance.com/resources/affordable-care-act/point-service-pos-health-plans

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Six Simple Tips to Follow while Shopping for an ACA Insurance Plan

There are six things that shoppers should keep in mind while searching for a health insurance plan during Open Enrollment 2021.

1. Identify the time and place you’ll need to sign up for health coverage

Federal agencies and local officials determine where Americans can enroll in medical insurance plans based upon residence. Most people will sign up using either the HealthCare.gov site, their state’s local exchanges or they can shop for health insurance with SmartFinancial. There are several states and the District of Columbia that host their own marketplaces. The federal exchange will open on Nov. 1, 2020, and run until Dec. 15, 2020.Compare health coverage from different plans against your current one. Do you want to skip 2021 Open Enrollment, because you love your current healthcare coverage? Always investigate all of your policy options instead of re-enrolling into the same plan. Even if you select the same insurance, your premiums or shared fees could increase, costing you more money. Compare your current policy against others, even if you decide to keep it. You may find insurance that provides the same actuarial value and services at a better price. Additionally, new insurance companies may also enter the marketplace that offers better services. Switch plans, if it makes sense for you.

2. Compare the annual costs and premiums of plans

Monthly premiums aren’t the only thing people should look closely at when shopping for plans. Use comparison tools on HealthCare.gov or your state’s marketplace to calculate the plan’s estimated total annual costs. Shoppers should find out how much they’re responsible for paying, including out-of-pocket fees and cost-sharing, such as copays, coinsurance, and deductibles. SmartFinancial also has a convenient tool to compare coverage options from different policies.

3. Evaluate how much health insurance that you use every year

Next, shoppers should list their current health issues and anticipate how much coverage they’ll need. This process can help people identify the costs they’ll have during the upcoming year. Another way to estimate this is by using age-related health issues. Additionally, have enough coverage to address any surprise health issues that may affect you. These include accidents or unexpected diagnoses (cancer, diabetes, heart disease or COVID-19).

Buyers should evaluate whether they want to pay more on a monthly premium. Choosing this option could mean lower out-of-pocket healthcare expenses. Paying a lower monthly premium may mean higher shared costs. Individuals should consider insurance that will pay for their current services and favorite providers. Additionally, they should see if the plans cover prescription drugs and other services they regularly use. HealthCare.gov allows you to add your primary care doctor and search for plans to find out if they’re covered.

4. Make sure your health plan is ACA approved

Some insurance providers will entice customers with deals that are too good to be true. Insurers may claim they can provide plans at discounted premium rates, but these options are generally short-term health insurance. Others promise that members pay a $0 deductible but they don’t mention the extremely high out-of-pocket costs. For instance, customers may pay a $1,000 coinsurance every day they stay in the hospital. These shared costs can add up to an expensive hospital bill in the end. Additionally, many of these policies don’t cover the ACA’s ten essential benefits, such as prenatal care, mental health treatment, and rehabilitative care.

Always search for plans that are ACA approved. There are online tools that attach star ratings to insurance plans. They also include member reviews about their personal experiences with certain insurers. This information can help people select coverage that suits them.

5. Trained professionals will help you apply for healthcare coverage for free

Although the federal government has decreased advertising for its 2021 Open Enrollment event, SmartFinancial will continue to blast readers with reminders of dates and tips on how to find the right coverage at the right cost. If you fill out a form with us, you’ll be connected to an agent free of charge. That agent can help you choose the right plan. See below for what you need to get started. If you do not qualify for a government subsidized plan, comparison shopping with SmartFinancial may save you money.

6. Assemble your documentation before signing up for plans

Before meeting with a health insurance agent (or signing up for an ACA marketplace plan), assemble all the necessary documents you’ll need. These include:

Copies of your Social Security cards.

Information about your household, including your spouse, children, dependents, unmarried partners, and individuals younger than 21 years old.

Address - Your residence can affect which health insurance policies that you’re eligible for on the marketplace. Enter your address to prove you’re a resident of the state where you’re seeking coverage.

Information about everyone applying for health insurance coverage. Include their names, social security number, and other pertinent information.

Immigration documentation

Tax information.

Employer and Income Information -These should include your wages and salaries (as reported on your W-2 form), tips, net income from self-employment or businesses, Social Security payments, alimony, retirement or pension income, rental income, and other taxable income.

An estimate of your household income - If you’re unsure about how much you make annually, provide your best estimate. Your tax returns or W-2 form can help you. You should also provide employer information for each person in your household.

To learn more about what documentation you’ll need to provide, download the Healthcare.gov application. You can apply or re-enroll in your healthcare marketplace coverage by visiting HealthCare.gov. You can also compare rates for several ACA compliant plans using SmartFinancial or call 855-214-2291. Our transparent insurance technology will allow you to search for plans in your local area and compare coverages. You’ll only need to fill out a quick form, and we’ll provide you with quotes from multiple insurance companies. It’s quick, easy, and simple. To get started, fill out the form below.

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