What is the Best Health Coverage to Get For 2016?

Under ObamaCare the best plan is generally a Silver plan with an HSA, for low income it’s Medicaid / CHIP, and for Seniors at least Medicare A & B. There is a bit more to it, but if we only had one sentence to convey a blanket answer that would be it. If we get one more sentence then it’s “if you have employer-based coverage and your, your family, or your spouse’s coverage seems unaffordable, you may be exempt from the fee and/or get an exemption to use HealthCare.Gov“.

General Advice

Before we get to why the plans suggested above are our choices for “best health plans”, let’s review a little general advice.

First and foremost: Always consider your families actual medical needs. Silver HSA eligible plan is a great blanket statement, but a lot of shopping for health insurance is about individual needs. If you need a lot of care or drugs consider Gold or Platinum. If you need consistent but moderate care consider a lower deductible Silver plan, if you simply know you won’t qualify for cost sharing reduction subsidies on that plan and don’t plan on funding an HSA consider a lower deductible Gold plan.

• Always get subsidies if you qualify, if you are on a line consider tax breaks that lower MAGI.
• Consider what drugs you “really” need and what drugs you are taking because your doctor recommended them once and you just said “ok”.
• Especially for the expensive non-emergency stuff, consider shopping around for doctors, pharmacies, hospitals, etc.
• Always think about networks.
• Understand cost sharing in general and the cost sharing your plan offers. Always think about what is covered at what cost sharing amount (you can always ask the insurer and doc).
• You have new rights to appeal. Always contest insurer decisions if you don’t like them (sometimes the doctor has to code a service).
• And, ALWAYS, take advantage of the free preventive services, wellness visits, and essential benefits.

Why Medicaid / CHIP?

Medicaid and CHIP are free or low cost. If your state expanded Medicaid, and you make less than 138% of the poverty level you can’t beat Medicaid. States that didn’t expand may not offer coverage to single adults and kids in higher income families may still qualify for CHIP.

Why the Marketplace?

The Marketplace is HealthCare.Gov or your state’s marketplace.

The Marketplace is like your big sister or big brother (in a good way). They will help to make sure you don’t get a raw deal and that you get the cost assistance you deserve. If you qualify for Medicaid, a kid qualifies for CHIP, or if your employer is offering you really expensive coverage, or you are confused about the law, they can help.

Independent brokers and health providers can be just as awesome, due to regulations and good business practices, but make sure they are enrolling you in a marketplace plan that qualifies for cost assistance (unless you know this is something you don’t want).

FACT: Regardless of how you enroll, only Marketplace plans qualify for cost assistance.

Why a Marketplace Silver Plan?

A Marketplace Silver Plan (a plan you get on HealthCare.Gov or your states Marketplace) is the only “metal type” that qualifies for cost sharing reduction subsidies and premium tax credits. It’s not rocket science, incomes change and the Silver plan is the only truly flexible plan. Getting a Silver plan can mean weeding out the upstart companies offering bronze plans with super narrow networks and lackluster service. Some of these little guy bronze plans are great, some have unique challenges.

More specifically an HSA eligible Silver plan will be the best option of many (keep reading to understand more about what that means).

For others the best bet will be to go Bronze, Gold, or Even Platinum.

When to Go Bronze and Gold

Generally only go bronze if you are young and betting on not needing coverage. Like-wise, if you have a big family with children or you have lots of medical needs crunch the numbers on a Gold plan. At the end of the day, you’ll need to know what medical services you need and what doctors you want to go to to get the right plan for you. What is smart for most people isn’t always smart for you.

When to Go Platinum

If you have a big family or need a lot of medical services premiums matter less and copays, coinsurance, and networks matter more. The more care your family needs as a whole the more you’ll want to look at the highest premium Platinum plans.

Why a HSA?

HSAs are the hidden gem in healthcare. They lower your taxable income, qualify you for more subsidies, allow you to save thousands a year in an investment account, there is no “use-it-or-lose-it” rule, and they roll over into a retirement account. If that wasn’t enough, the money you use for out-of-pocket medical and all dental and vision can be used tax free (that is tax free in and tax free out). If you are the sort of person who likes saving money and likes paying less taxes, you should consider this.

Learn more about HSA’s and ObamaCare here.

How High of Deductible?

To qualify for an HSA you need at least a $1,300 deductible for 2016 as an individual and a $2,600 for a family. So when we suggest “high deductible” (i.e. HSA compatible plans) we aren’ t necessarily suggesting a $6,450 individual / $12,900 family deductible (the maximum it can be). In general only a young healthy person who won’t use a lot of services on average will benefit over time form a truly maxed out deductible.

For someone who could reasonably expect to get subsidies, and has reasonable medical needs, would suggest looking at higher end of Silver plans with decent copays to get the best of all worlds. Remember copays help right away, coinsurance only kicks in after you have met your deductible.

NOTE: People get a little uptight when you suggest they squirrel away hundreds or thousands for a rainy medical day. This is understandable, life is expensive. However, if you look at net savings over time, or rather overall value of the dollars you earn, an HSA can make a big impact over the course of say ten years. If you don’t use it, you just take the money out at a fee later. An HSA isn’t fool proof, or without it’s risks, but you would be doing yourself a disservice not to look into them.

Why Medicare Part A & B?

In most cases, as an American you have a right to Medicare part A & B when you turn 65. Here is the deal though, Medicare isn’t a “public” program, it’s a quasi-public program like ObamaCare. What that means is that if you forgo B, D, and C or Medigap when you turn 65 insurers can start charging you higher rates.

Navigating the free marketplace of Medicare is a little like asking our grandparents and parents to run a gauntlet of capitalism as some retirement ritual. “Hey Grandma I know you can’t figure out the VCR… but figure out Medicare enrollment periods, and supplemental coverage, and make the right choice that will cover you from now until perhaps the next 40 years”. Cynical jokes aside, you need to make smart Medicare choices during your initial enrollment period.

We suggest always getting A & B (unless you have a good excuse not to, like you have specific retirement coverage that allows you to avoid the part B penalty). We also suggest getting D and C or Medigap early. For many Medicare types the longer you go, the more expensive your premiums. This can lead to not having supplemental coverage when you are older and need it the most. On that same token, make sure you have savings. Having coverage until you are older and sicker (and then don’t have money to pay your premium or out-of-pocket costs) is not going to feel very good. With Medicare you always have to think total spending as a senior, end-of-life costs, and other factors (this should be considered with life insurance too).

Find a Broker

Whether you use HealthCare.Gov go to Medicare.Gov or you find a local broker, it’s smart to get help tailored to you. Finding an insurance broker you can trust is a good move. This is America, typically someone in sales has an incentive to sell you things. That aside, a good salesperson will focus on your needs and getting you the best product for you so you come back next time (or you keep the plan and they get residuals). Build a relationship with a local broker you trust and ask questions like given where I live, and my pharmacy, and my illness, and my income, and planning for the future, what do you think would be good plan choices for me?

Keep in mind some brokers can only offer a limited selection of plans. Always consider your own needs and shop around to find the best plan. If you don’t get it right this time, there is always next year.

Learn more about buying health insurance under the Affordable Care Act.