 Personal Finance PowerPoint Presentation. Options for purchasing health insurance. Prepare to get financially fit by practicing personal finance. Remember that health insurance is part of our long-term risk mitigation strategy where we follow the adage of measure twice, cut once. We're going to put a formal plan in place, something like set the insurance goals, develop a plan to reach those goals, put the plan in action, review the results, and then repeat the process periodically. We're now looking at how to get health insurance. Most of this information can be found at Investopedia, which you can find online. Take a look at the references, resources, continue your research from there. This is by Amy Fontenille, updated January 24, 2022. Choose among these five different options. So we've been talking about insurance in general and prior presentations. We've been looking at the health insurance specifically here, noting that the health insurance can be more complex than other types of insurance due to, in part, the complexity of the health industry and the rules and regulations that are imposed upon it. So we probably have to spend a good deal more time to really wrap our mind around what is covered, what is not the best plans, and so on. So if you need to buy health insurance, you're in good company. For the fourth year in a row, the number of uninsured people in the United States increased to approximately 30 million individuals in 2020. So we'll explain each option for buying your own health insurance so you can decide which path might be best for you. Option number one, use the government's health insurance marketplace. So when we're thinking about trying to purchase insurance, oftentimes if people are uninsured at this point in time, it might be because they're not working for someone or an employer that has the ability or has the option of buying health insurance because that's possibly or most likely the first place you look for because as we've seen in prior presentations, the employer traditionally gave benefits. That's why the health insurance kind of got linked to an employer, but even though times were kind of different before where people often worked for one company for a long period of time, and the employer might have benefits such as being able to provide a group plan which might lower the costs and have tax incentives. So if you don't have an option of getting health insurance through the employer, then you're going to be possibly looking for other places to purchase the health insurance. One place you might go is the government's health insurance marketplace. So the health insurance marketplace is often referred to as the health insurance exchange. So when you hear these terms, the marketplace or the exchange, you can kind of use them interchangeably depending on your income and your eligibility for other health insurance coverage. You may qualify for subsidies also called premium tax credits. So the premium tax credits, this often applies to lower income individuals and if you're looking at the exchange, so you're purchasing from the exchange or the marketplace that and you qualify for the credit, they might be able to lower the premiums for by anticipating the credit that you would get when you file your tax return and then when you file the tax return, you'll have to take the credit into consideration. So it's a bit complicated, but it can of course lower the premiums basically subsidizing health insurance. So you got the premium tax credit when you buy health insurance through the marketplace. You can buy a marketplace policy even if you are eligible for insurance through your employer and it doesn't hurt to see if you can find a better plan for your situation. You probably won't be able for subsidies if you have access to job-based coverage though. So if you work somewhere and you got access to the job-based coverage, usually oftentimes that's the cheaper and better option because the employer has those benefits of the group plan and so on. But you might still say, now I'm not going to do that, I'm going to go through the marketplace. But if you're going to the marketplace in that instances, note that the subsidy for the marketplace, this kind of credit is available or there because it's trying to help people out who don't have access to health insurance and some other way in part at least and or for people whose income are below a certain threshold. So if you have access, you could still go to the marketplace, but you might not get that same benefit with the credit. Open enrollment for 2022, coverage began on November 1st, 2021. You must enroll by December 15th for coverage that begins January 1st, 2022. In 2021, amid ongoing COVID-19 pandemic, the open enrollment period was extended from February 15th to May 15th. So you got this window that you need to make sure that you're kind of looking at when you're going to be purchasing the health insurance. So you got to take that into consideration. State exchanges may have slightly different enrollment dates. Note that when you're talking about these exchanges, they set it up so the states, some states have their own kind of exchanges at this point in time, which is the bottom line. So you might want to first look at your state exchange if that's the option you're going for. And then if you don't have the state exchange, go to the federal exchanges. It's important to buy a policy during this annual enrollment period because you won't be able to buy a policy for the rest of the year unless you have a qualifying life event like moving, getting married or having a child. You can apply online by phone or in person. If you need help applying, you can work with a marketplace navigator in some states, a certified application counselor or in-person assistant personnel. You must be a U.S. citizen or lawfully present present in the country to buy a marketplace plan. Start your search for a marketplace policy at healthcare.gov. So again, you might want to go to your state organization and see if you have a state healthcare policy or plan first. And then go to healthcare.gov, which might help you to find whether or not you have the state as well. Enter your zip code and you'll be directed to buy a policy through the federal marketplace. If your state has its own marketplace, you'll be redirected to your state's website. So you could go to the federal website here. And if you enter the zip code, it'll take you to the state website if the state has a website. If not, you'll be on the federal side of things. So you can also find direct links to state exchanges at healthcare.gov, the marketplace in your state site. If you aren't sure whether you qualify for Medicaid or the Child's Health Insurance Program, the CHIP, you can find out by visiting your state's Medicaid website or by filling out an application at healthcare.gov. Option number two, work with an agent or a broker. Work with an agent to kind of help you to navigate through the healthcare kind of scenarios, although, you know, you might have to pay an agent if you're trying to get through an agent to work for you. Remember, most people think of an agent kind of like a lawyer working as your agent in like a law case or something like that, or a real estate agent. So these are people that are going to be making some form of decisions on your behalf, supposedly looking for your best interest within a specific field of expertise, generally that you have granted them that kind of help or decision-making power over. So an agent or broker can help you find a good policy for you because they have experienced a value-weighting health insurance plans. The federal government's find local health tool can help you locate a marketplace-trained private insurance broker to learn more about greatest number of options and get the least biased advice. You may want to work with a broker that sells both marketplace and non-marketplace plans. So notice when you're working with somebody like a broker, you've got to think about what their interests are because any time you have an interest, your agent's interests often line up with you to some degree, but not possibly completely. If you're selling at home, the agent is supposed to be working on your behalf, but clearly their incentives don't line up financially exactly with yours because they would obviously like to make the commission on the sale. So similarly, any kind of agent situation, you have to think about what the compensation is for it. And if you're talking about a broker, you might be talking about someone who has access to multiple different insurance companies and is trying to compare and contrast those multiple companies to give you the best option. But if they are limited to the companies that they are comparing and contrasting and they're making a commission on the sale that they're limited to, then obviously they're going to be working within that more limited spectrum. So just be aware of that. You might want to talk to someone that's even outside of a commission-based type of thing. You might want to talk to like your friends, a local CPA or a lawyer. If you work with someone in that area or someone in the healthcare industry, a doctor that might be able to give you some advice that would be independent from the commission that they would get if they were to purchase the actual plan because their incentives then do not line up. You might actually pay someone just for advice on what you think the best healthcare options would be so that you can get an independent decision that's not biased by whatever decision you actually make. So health insurance companies pay brokers when they sell policies. Consumers don't pay a fee to brokers. No do they hire premiums to work with them. Agent usually means someone who only sells policies from one insurance company, while broker means someone who sells policies from multiple insurance companies. So these terms you're listening to, like if you say the agent, then you're kind of talking to someone that's basically like a salesperson for a particular company, right? So you're going to be talking to someone who's going to give you the range of options in particular to a particular company, whereas if you're talking about a broker, meaning it's kind of similar if you're going to get like a home loan or something like that, and you talked to the person that works at your local bank about basically the loan options, they would give you the loan options available at their particular financial institution, whereas when you're talking like a broker, you might be talking to someone who has access to multiple institutions that has a wider access, you've got a similar kind of thing here. The broker means someone who sells policies for multiple insurance companies and has a wider net to do comparisons between. But again, their incentives still are kind of tight. You can see how their incentives are going to be tied to how they're going to get paid and what kind of policies they have access to and take that into consideration when you're working with them. So private insurance brokers may also show you options on private enrollment sites from insurance companies and web brokers. If you want to qualify for subsidies, however, you should apply through healthcare.gov or your state exchange. So the government's health insurance navigators will only show you marketplace plans available through healthcare.gov. So when you go to the marketplace, note that the marketplace is specific as of the marketplace, right? So you're not really going outside of that. You can use that as kind of a baseline type of thing and then possibly expand your search from that point to consider other options if that would be applicable. So all of these plans are eligible for subsidies and navigators help is free. Option three, buy directly from an insurer. The health insurance marketplace does not include every health insurance plan available. So remember that if you're going into the health insurance marketplace, that's not the whole world of the health insurance. Those are the ones that are under the health insurance marketplace and those are the ones that you might be able to have the access to if your income is below a certain threshold to the other subsidy kind of things like the credit. But you might then expand on that, especially if your income is above the threshold and you're not going to get that credit, for example, then you might widen your search, your scope out a bit at that point. So some people might be able to find a plan that better meets their coverage needs or their budget outside the marketplace. When you're shopping for a policy on a single insurer's website, you will of course only see options available from one insurer. So you might have an insurance company in your mind and you could go to their website. If you're familiar with a particular insurance company, that might be a good place to start. But then you might narrow down what insurance company you're used to or what you think is appropriate to you and then expand that out doing comparing and contrasting using website tools which are getting better and better for comparison with other companies that have similar plans. So there's kind of two things, two broad categories you're keeping in mind. You know, what's the insurance company I'm going to be using and or am I going to be doing something within the health insurance marketplace and then what kind of plan, the general plan I'm going to be doing and then you could be doing comparing and contrasting. If you're in the marketplace, you're probably saying I also might be able to get the credit. That's because my income is below a certain threshold possibly which would give you further incentive to go to the marketplace. If you don't get the credit, you might expand your search and then now you're thinking, you know, what kind of insurance policy do I need and then what company would be best for that kind of policy. So you'll need to visit several insurers website to see all your options if you want to buy direct. So the ACA, that's the Affordable Care Act, complaint plans sold outside federal and state exchanges must meet the minimum essential coverage standards of the Affordable Care Act. The ACA, such as covering pre-existing conditions, providing essential benefits and offering a pre-emptive care at no cost before you meet your deductible. You can also buy non-ACA Affordable Care Complaint short-term plans up to 12 months outside exchanges that may have more exclusions and fewer benefits. So that's when you have those gaps that you can't make the window to get your insurance and you need to have insurance for that timeframe. You might go to the short-term plans which aren't having as in-depth coverage by the ACA, the Affordable Care Act. So people who are between insurance carriers might think that having some insurance is better than having none at all. So I would think that would typically be the case, right? You want to be insured, again, at least against the event that some big financial health issue happens because if that happens you're not insured then you're going to have this issue of not being insured and the big thing hit and then it's harder to get insurance. So short-term health insurance plans market their perceived coverage as an excellent alternative to the ACA compliant insurance that comes with lower premium costs, but those lower costs do not mean equal coverage for the consumer. Most short-term plans deny coverage to patients with pre-existing conditions and sharply limit mandated ACA vital essential health benefits, prescription drugs, mental health services, prescription drugs, and maternal care leaving many with costly remaining balances. So again, I would think that these short-term plans are not something that would be your coverage overall. They're a short-term gap-fill type of thing in the event that you would need the short-term plan instead of having no insurance while you are setting up or doing whatever needs to happen or waiting for the window to open to get other insurance would be one way you might be thinking about the short-term insurance. These strategies, these strategic policy limitations on applicants and the coverage plan are the real reasons behind this alleged affordability. Proceed with caution concerning short-term health insurance because the financial risk may outweigh the financial gains and cost savings. In short, pay close attention to what you're signing up for if you apply through a private exchange and when considering any so-called alternative to traditional health plans. If you don't apply through the federal marketplace, keep in mind that you won't be eligible for subsidies. So the subsidies are like those credits, for example, and those would be something that you might have availability to if you're going through the exchange. But again, there's usually going to be an income threshold with regards to the subsidies to qualify for them. If you're not qualifying for the subsidies, then you might think widen your search possibly. So if your state operates in its own health insurance marketplace, you should buy your health insurance plan through your state marketplace to make sure your plan is eligible for subsidies. If your income is too high to qualify for subsidies, you might not care. But if you end up earning less than expected in the coming year, you could end up unexpectedly qualifying for subsidies, so you might want to keep your options open. So subsidies are based on how much you earn in the year you're buying coverage for. When you're enrollment, when you're enroll, you'll only be getting an estimate of your subsidies based on your estimated income. So the way that will typically work, and it's fairly complicated because they're trying to get an estimate of how much you'll get subsidies of your credit oftentimes, and they might try to decrease the premium based on that estimate that they had. And then at the end of the year, when you file your tax return, you'll have to calculate the actual credit and then shore up the difference. Now, the thing that's kind of funny is I'm pretty sure that the IRS actually incentivized people to kind of miscalculate the credit, in my opinion, because they basically said that if you overestimated the credit, and then when you actually calculated the credit at the end of the year for one year, that you don't have to pay the credit back, right? We're just going to wave it because you just miscalculated it. So there's kind of an incentive or some precedent for people to actually try to overstate the credit and hope that the government doesn't make them pay back the fact that they overstated the credit. So I wouldn't depend on that, obviously, but it's a funny incentive that I wouldn't be surprised if that kind of thing happens. You would think that you would want to incentivize people to get the credit calculated correctly, and if it's wrong, then you'd have to pay it back or lower your refund by the amount that you overstated the credit for when you file the tax returns. In any case, option four, buy through an online health insurance broker. Online health insurance brokerage, also called private enrollment website or private exchanges, offers to help you compare health insurance policies or get the best available plan based on the information you give them. Comparison shopping is smart, but consumers should understand that these sites will not show them every plan in the market that meets their requirements. Instead, these private exchanges will show a selection of plans that will earn them a commission if the consumer enrolls. You've got to always keep an eye out for how they're making money when they're giving you a recommendation. They may display more prominently or provide more information on the plans that earn the brokerage a higher commission. These marketing incentives don't necessarily mean the plans these sites offer aren't good plans. It just means consumers should be aware that they may not be getting a complete picture of the options when they visit one of these sites. So obviously, if you get a site and someone has paid the site, it'd be like searching on Google, and obviously they pay someone to get the Google thing at the top. It doesn't mean it's the best quality information based on the search algorithm then. It just means they got paid, which is the reason originally Google beat out other people like Yahoo and whatnot is because they didn't do that kind of thing, and now they're a monopoly, so they might be doing it now. But you like to be finding a search engine for healthcare that's going to be doing comparisons. That's not based on just the fact that the insurance companies paying them the most money to promote some particular plan or promote that company over another company, but rather on other factors. So private enrollment websites may ask you for personal information that the federal and state marketplace do not. They may ask you for height, weight, and pre-existing conditions, factors that can affect your eligibility for plans that don't comply with the Affordable Care Act. Your personal information may also be used by the company behind the website. You give it to as well as their business partners to market other products to you. So obviously everybody these days trying to steal something from you, mostly information so they can bombard you with information or possibly blackmail you or do something to take your money or manipulate you in some way. That's just the way it is apparently. In any case, as with buying a policy directly from a health insurance company, you cannot get premium tax credits, subsidies, if you buy your health insurance policy through a private exchange. Option number five, buy through a membership organization. If you belong to a union, alumni association, professional organization, or any other large group, you may be able to purchase health insurance through it at group rates. So the group rates, if you can get on to the group rates, then they're often going to be cheaper possibly because of the group formation lowering the risk to the insurance company, which hopefully they can pass on to the people buying the group rate policies in lower premiums. Freelancers unions, for example, offer health insurance through its subsidiary Freelancers insurance agency and through one of its partners, Health Plan Services. When looking for health insurance through an association or membership organization, make sure you will actually be purchasing insurance and not just a health service discount plan. Discount plans might save you money on prescription or eyeglasses, but they won't help you if you get cancer. Also, be aware that even if the association itself is a not-for-profit organization, it may be tied to or even established by a for-profit insurance agency through which it sells policies to association members. So the fact that something's not-for-profit doesn't mean that they don't like profit. It's my basic case on not-for-profits, right? Because they're still trying to earn money because they're at least paying the people that are working there and they might be working or set up or being in alignment with other for-profit companies. So do your research on the not-for-profits. Be aware of health care sharing ministries. The misconception that health care sharing ministries are form of health insurance can put patients in a financial hole. Health care sharing ministries are operated by not-for-profit organizations made up of people with a common belief who agree to help pay one another's medical bills. They may be attractive to healthy individuals looking for low-cost coverage, but they do not provide actual health insurance and are not held to the same standards as regular health insurance companies. So this might be a way that people are trying to kind of self-insure to some degree. And you might be able, when you're thinking about health self-insure kind of options and that kind of thing, you might be able to save up your savings or work with other people to have a pool of savings to some degree or something like that. But you still want to insure against the big catastrophe that happens because, like the equivalent on property insurance, you're house burning down because if you get cancer or something like that, the medical bills of one person can get quite high and wipe out any kind of savings that can be done in alternative kind of ways. So you would think need some kind of insurance to safeguard against that big thing that could possibly happen. Hopefully the risk is low, but if it was to happen, it could be big financial impact. So in fact, they are under no obligation to pay its members medical bills. As a result, some procedures and costs may not be paid for through the membership and other mandatory ACA critical benefits for substance abuse and mental health are not covered. Healthcare sharing ministries generally do not cover pre-existing conditions, often change charge higher rates based on health status using a process known as underwriting and do not guarantee reimbursement even for the conditions they cover. Although the upfront cost to join a healthcare sharing organization might be lower than the premiums and other costs of an ACA, the Affordable Healthcare Plan, it might amplify financial stress in the long term. A number of states have taken legal action against health sharing ministries and have stepped up warnings to consumers. How much does health insurance cost? The average annual premiums in 2021 were $7,739 for single coverage and $2221 for family coverage according to research from the Kaiser Family Foundation. Prices for 2022 are expected to increase as our prices everywhere else at this point in time. Inflation, as they do most years, for instance, 2020 saw a 2.1% increase. Premiums in 2019 jumped 4% from the prior year. For 2022, Willis Towers Watson projected a 5.2% increase in healthcare premiums. In 2021, the average premium for single coverage increased by 4% and the average premium for family coverage increased by 4%. The average family premium increased has increased 47% since 2011 and 22% since 2016 according to KFF. How do I get health insurance if I am retired? If you are retired but still under age 65 and no longer have employment health insurance due to job loss, you can apply for coverage through the healthcare marketplace at that point until you get to 65 and possibly get the other coverage for the Medicare Medicaid. So losing coverage will qualify you for a special enrollment period based on household size and income. You may qualify for a premium tax credit and lower out-of-pocket costs. Retirees age 65 and older will qualify for Medicare and Medicare Advantage. You can also switch to the marketplace plan if you have retiree health coverage but won't be eligible for the tax credits and lower out-of-pocket benefits or the special enrollment period. If you turn 65 in the middle of the year, you may qualify for a marketplace plan to cover you until the Medicare begins. If you are 65 but do not qualify for premium-free Medicare, you can buy insurance through the marketplace and receive lower costs than tax credits. How do I get health insurance if I have a disability? If you have a terminal illness, need daily assistance with care at home or in a group setting. Live in a long-term care or group home. Have a disability or a condition that limits your employment. There are options available. Disabilities are covered under the pre-existing health conditions and plans cannot charge you more due to your health circumstances before coverage. With Social Security Disability Income SSI, you can apply for coverage through the Medicaid. Most states automatically grant Medicaid when you get approved for SSI based on disability although in some states SSI does not guarantee Medicaid. It pays to check your state's rules. In some states SSI guarantees eligibility but separate registration is still necessary. If you have Social Security Disability Insurance SSDI, you can apply for coverage through Medicare. Unfortunately, you can't supplement or change your insurance to a marketplace plan if you have Medicare already. If you are enrolled in a marketplace plan prior to your Medicare application, you can keep it as supplement insurance but you will forfeit any premium tax credits and additional savings offered. How do I get health care insurance if I am self-employed? Oftentimes you get the insurance through your employer. If I am self-employed now I have a sole proprietorship. If you own your own business, you can apply for health coverage through the marketplace. Your income and household size may qualify you for premium tax credits and other insurance savings. There could also be free or low-cost coverage through CHIP, CHIP, or Medicaid programs in your state. Marketplace plans allow business owners to ensure their children and spouses. Health care savings is based on estimate of net earnings in the year you apply, not the previous year's income. So what's the bottom line? If you don't get health insurance through work or through Medicare, you have several ways to apply for coverage. If you are comfortable doing the research and comparing plans on your own, you can apply yourself through healthcare.gov. So that's a good place to kind of start your research. Going through the government's website can also tell you if you're eligible for the Medicaid and or CHIP CHIP, if you need help finding the right plan or applying, you can work with a marketplace assistant counselor, navigator, or broker. So you can look into the brokers to help you out. Make sure you have an understanding of what their compensation plan is and so on and how that could incentivize their particular incentives. So all of these individual services are free. I would recommend also that you might talk to someone that you know about health insurance, your family members, your friends, your doctor, obviously if you can talk to them, possibly a CPA and or insurance agents that might be able to help you possibly paying someone for an independent decision about this kind of thing that's not getting paid through your actual purchase of some kind of insurance so that you get that independent decision and then maybe with that knowledge go into some of these other options feeling hopefully a little bit more secure with that third party opinion. But you don't have to buy health insurance through the federal exchange or your state's exchange or at all, but you won't be able, eligible for premium tax credits unless you do. So the exchanges are not like the only place you'd want to go, but you got those credits which are the incentives. Typically if your income is below a certain threshold, if your income is above a certain threshold and you're not going to get the credits, then you might like start there and kind of maybe extend on out and look at the more broader options. So finally, make sure to buy a policy during the annual open enrollment window. So you got to make sure that you're lined up with the timeframe to get the insurance when you can when you can. So it's your best opportunity to buy affordable, comprehensive coverage.