Tips for Health Insurance Consumers in the 2013 “Gap Year”
Here at eHealthInsurance we recently compiled some terrific tips to help consumers – insured and uninsured alike – understand their coverage options and responsibilities in 2013, the health reform “gap year.”
What do we mean by “gap year?” Well, in the multi-year roll-out of federal health care reform, 2013 has been described as a gap year because it’s a sort of calm before the storm, if you will. A large number of the law’s consumer health reform provisions came into effect between 2010 and 2012, but the last major provisions of the law – and those which may have the greatest impact on consumers – do not come into effect until January 2014.
These big 2014 provisions of the law include:
- The Individual Mandate – This is the requirement that most Americans without employer-based health insurance purchase coverage for themselves.
- The Employer Mandate – This requires employers with fifty or more full-time workers (or the equivalent in part-time workers) to provide employer-based group health insurance for employees.
- Guaranteed Coverage for Pre-Existing Conditions – Starting in January 2014, no one may be declined health insurance coverage due to the presence of pre-existing medical conditions.
- Subsidies to Make Health Insurance More Affordable – Government subsidies will help many people earning less than 400% of the federal poverty level afford individually-purchased health insurance.
Now, in order to help consumers better understand their options during this gap year – before the above provisions of health reform come into effect – we’ve released the following five tips:
Gap Year Health Insurance Tips
Don’t wait until 2014 to get health insurance. If you’re currently uninsured, it might be tempting to wait out the next several months until January 2014, when subsidies may be available to help you afford coverage and you can no longer be declined due to pre-existing medical conditions. But going uninsured, even for a few months, can be a big – and costly – mistake. A single visit to the emergency room or an overnight stay in the hospital can cost you thousands of dollars. Health insurance limits your liability for medical costs and can help you avoid medical-related bankruptcy. Health insurance coverage purchased in 2014 will not help you pay for medical bills incurred in 2013.
Get creative to get covered this year. When looking for health insurance, consider an individual or family health insurance plan first. Work with a licensed agent like eHealthInsurance.com, the best place to compare and apply for health insurance online, to find the right match for your needs and budget. Individual and family plans are paid for on a month-to-month basis and may be canceled at any time. If you don’t qualify for coverage due to a pre-existing medical condition, a 2010 provision of the health reform law strengthened state high-risk pools and pre-existing condition plans. Learn more about these options through your state department of insurance or pcip.gov. If standard individual coverage or pre-existing condition coverage isn’t an option for you, look into short-term health insurance, accident or critical illness coverage. These products don’t provide the richer benefits you may get from a traditional health insurance plan, but they can provide a layer of protection in case of serious illness, accident or hospitalization.
Expect better benefits, and maybe higher prices. Since the Affordable Care Act was signed into law in 2010, health insurance plans have started covering more preventive care and women’s health care services with no out-of-pocket cost, and lifetime coverage limits no longer exist for most services. Expect benefits to improve in the next year, too, as coverage for things like maternity care becomes standard, but keep in mind that higher benefits may also mean higher monthly premiums. No one can say exactly what your health insurance costs will look like in 2014, but unless you qualify for subsidies, you may face an increase in what you pay for monthly premiums. Start budgeting for that possibility now, and consider opening a tax-advantaged Health Savings Account if your current health plan is qualified for use with one.
Know if you’ll qualify for subsidies in 2014. If you buy your own insurance today, or there is a chance you could lose your employer-based coverage next year,it’s a good idea to know if you will qualify for government subsidies to help you pay for your own health insurance. Beginning in 2014, federal subsidies will be made available to individuals and families earning less than 400% of the federal poverty level (about $45,000 per year for a single person, or $92,000 for a family of four, in 2012 dollars). Depending on your income, these subsidies will limit your health insurance premiums to between 3% and 9.5% of your annual income.
Don’t assume health reform won’t affect you. If you have employer-based coverage, you may think you won’t be affected by health reform next year. Companies with fifty or more full-time workers will be required to provide health insurance in 2014 or face penalties. However, these penalties are substantially less costly than actually providing health insurance. Knowing that their employees can no longer be declined individually-purchased health insurance due to pre-existing medical conditions, some companies may opt to pay the penalty rather than provide coverage. Small companies (who won’t face penalties in 2014) may also get out of the health insurance business and send employees to find coverage on their own.
Image by Flickr user w_warby