In modern times, health care has gotten complicated, and controversial. However, the bottom line is that health insurance is still the best way to reduce health care costs to an amount you can manage by sharing the risk with others. Here are the basic facts you have to know about Obamacare and how to get the best health insurance coverage for you.
How Obamacare Changed Health Care
Everyone talks about Obamacare, but few actually know what it’s really about. Here are the important changes that Obamacare has made:
- Individual mandate. All Americans are now required to get health insurance, and if they don’t, they have to pay a fine. The Supreme Court has upheld this tax as legal. As part of the mandate, no one can be rejected from health insurance for a pre-existing health condition. The IRS enforces the mandate on individuals via disclosure on annual tax returns.
- Health insurance exchanges. Each state will run a health insurance exchange to provide important information, increased choice in plans, some level of insurance standardization and increased consumer protection. California’s exchange can be found at coveredca.com.
- Independent Payment Advisory Board. Obamacare has created a board of 15 experts who are empowered to make budgetary health care decisions independently unless counteracted by a three-fifths vote in Congress. It remains to be seen how this board will affect health care decisions long term.
- Essential health benefits. All health insurance sold to individuals and small businesses must now cover these 10 essential health benefits:
- Emergency services
- Laboratory tests
- Maternity and newborn care
- Mental health and substance abuse treatment
- Outpatient care
- Pediatric services
- Prescription drugs
- Preventative services and management of chronic diseases
- Rehabilitation services
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How to Choose a Plan
Choosing a health care plan can be complicated, but here are some basic tips everyone should start with. Begin at your state health insurance exchange to see what plans you can get. If your income is very low, you will probably qualify for Medicaid (Medi-Cal in California). This is medical insurance paid for by the government that covers individuals and families who have incomes of up to 138% of the federal poverty level.
If your income is above Medi-Cal level but still beneath a certain threshold (up to 400% of the federal poverty level for Covered California), you may be eligible for premium assistance by the government. This means you will still have to purchase a private health care plan, but the government will help pay for it. All other individuals and families will have to pay for private plans on their own or receive insurance through their employer.
Unless you are on Medi-Cal, your private insurance options will be the same no matter what your income is. Marketplace insurance (those policies purchased through an exchange) will guarantee that you get the minimum essential coverage, and it is segregated into five categories based on the amount the insurance will pay vs. the total amount you will pay (including premiums, deductibles, coinsurance, copayments and out-of-pocket maximums). The categories are:
- Bronze—60/40 split. This choice is good if you don’t expect to use medical services on a regular basis and do not have any ongoing or regular prescriptions.
- Silver—70/30 split. This is the best choice if you qualify for lower out-of-pocket costs due to income. It will offer you the best value compared with Gold or Platinum.
- Gold—80/20 split. This is a good choice if you expect regular doctor visits or need monthly prescriptions. Your premium will be higher than Bronze or Silver, but more costs will be covered.
- Platinum—90/10 split. This type of plan has the highest premium but will cover most of your costs. It is the best option for people who go to the doctor several times a month.
- Catastrophic. This will pay less than 60% of your costs and is available only to individuals under 30 or to those who have a hardship exemption. If you qualify and you want the lowest monthly premiums, this is your best bet.
A final consideration is whether your preferred health care provider takes your coverage. If you have a favorite doctor, call them to ask which insurance providers they would accept before making your decision.
Consult an Expert
Health care has always been an ever-changing industry. We’ve gone over some basic changes, but things can still get complicated, and laws are changing all the time. We would recommend to always consult with a knowledgeable insurance broker before you make a change in your health insurance benefits.