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As a general rule, the option that gives you the greatest coverage, for the lowest price, for the longest time is the best choice.
As a general rule, the option that gives you the greatest coverage, for the lowest price, for the longest time is the best choice.

Navigating the HealthCare Marketplace has Never Been Easy: Start with the Main Options Available

Apr 30, 2020

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The growing numbers of unemployed Americans – likely to hit 20 million or more thanks to the effects of the coronavirus – bring with them a loss of employer-provided health insurance coverage. The pandemic has laid bare the deficiencies in America’s main vehicle for providing health insurance.                    

The system, which grew up after World War II as a way to attract workers, had already begun to decline. Over the past 20 years the share of non-elderly Americans covered by job-based insurance dropped from 68 percent to 57 percent. Significantly, that drop has been true for all income groups below $104,800 for a family of four and about $51,000 for a single person.

Those grim stats raise a crucial question:

How will laid off middle-income workers be able to pay for insurance premiums on their own let alone the deductibles, coinsurance, and copays that come with policies these days? Many cannot.

Still if you are in this predicament or know someone who is, this column lays out the main options available. A warning: All have drawbacks.

As a general rule, the option that gives you the greatest coverage, for the lowest price, for the longest  time is the best choice. 

COBRA: The Consolidated Omnibus Budget Act passed in 1985 gives employees who have lost job-based coverage the right to remain on their employers’ policies for at least 18 months, longer under some circumstances. COBRA applies to employers with 20 or more employees, and workers who’ve lost their jobs have to pay the entire premium plus a small administrative fee. The average annual family premium for employer-provided coverage last year was $20,500 with the employee paying only $6,000 of that amount. This isn’t likely to be a great option for someone who was just laid-off.

AFFORDABLE CARE ACT policies are a better option for many workers who’ve lost their jobs. While they are a good solution for some people, they are problematic for others. Those with low and middling incomes below 250 percent of poverty, or a little more than $64,000 for a family of four, should consider an ACA policy. You’ll receive government help paying the premium and, most important, help paying the deductibles, coinsurance, and copays, which are increasingly pinching family budgets, making it hard for them to afford care.

Families with incomes between 250 percent and 400 percent of poverty (nearly $105,000 for the family of four) do get some help paying the premiums, but the amount of help declines the higher the income. The biggest problem for families in this group is that there is no help from the Affordable Care Act with the cost-sharing expenses: deductibles, co-insurance, and co-pays. That makes these policies less attractive, especially when someone gets sick and finds that a deductible of $8,000 means they won’t get any help until they have paid at least that amount out of pocket. 

If you don’t qualify for cost-sharing subsidies, you’ll have to make this choice: Go with a cheaper premium but higher cost sharing and be prepared to pay more if you get sick. Or pay more up front and have more protection when illness strikes.   

Remember that having a pre-existing health condition is not a barrier to obtaining an ACA policy. That is a huge help to anyone who is ill. 

Since the president has said he will not open the federal ACA marketplaces now closed, you’ll have to apply for a policy through a special provision that lets people enroll if they’ve lost employer coverage in the last 60 days or expect to lose it in the next 60 days. You can also qualify if you’ve lost coverage you had through a family member. Go to this website for more information: https://www.healthcare.gov/glossary/special-enrollment-period 

MEDICAID is a good option for people with very low incomes. It provides comprehensive coverage, but it’s hard to get. In most states, an adult’s income must be no greater than $17,609 to qualify. Some states have even lower limits to receive benefits. Some have tried to impose work requirements as a condition for receiving benefits, but those are gone now. And the Families First Coronavirus Response Act that Congress passed on March 18 bans states from disenrolling anyone who was covered by Medicaid as of that date, making it easier to maintain coverage.

SHORT-TERM POLICIES are an alternative made available last year by the Trump administration. They offer coverage for up to three years and can cost as much as 50 percent less than more comprehensive policies. But they generally don’t cover preexisting conditions and often don’t cover maternity care, mental health, or prescription drugs. I call them the“buyer-beware” option because some consumers have purchased them only to be left with large bills when they got sick. If you’re offered one of these, proceed with extreme caution.

Navigating this marketplace has never been easy. 

Send your health policy questions and concerns to Trudy at trudy.lieberman@gmail.com.     

 

 

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