By Sonya Sellmeyer, Consumer Advocacy Officer for the Iowa Insurance Division
Open enrollment for purchasing a new or changing an existing Affordable Care Act (ACA) individual health insurance policy runs November 1 - January 15, 2023. For coverage to be effective by January 1, 2023, a person will need to sign up by December 15, 2022. Persons who sign up between December 16th and January 15th wil have coverage effective February 1, 2023.
Before purchasing any health insurance, knowing some basic health insurance terms will assist in determining the best option. Consider the type of plans being offered. A health maintenance organization (HMO) may limit access to in-network doctors, providers, and hospitals. It’s important to know that HMOs may not have access to out-of-network providers. A preferred provider organization (PPO) has in-network doctors, providers, and hospitals, and also may have access to out-of-network providers. A point-of-sale (POS) plan charges less to see doctors in their network and requires a referral from a primary care doctor to see a specialist.
Before visiting any medical provider, call the health insurance company to ensure the provider is in-network. Out-of-network providers will cost more or may not be reimbursed by insurance. Also, obtain insurance authorizations before procedures and ask for an estimate of the out-of-pocket cost.
Depending on the healthcare plan, costs may include monthly premiums and out- of-pocket costs such as deductibles, copayments, and coinsurance expenses. Out-of-pocket costs are often capped at a certain amount annually.
Premiums are the amount paid for health insurance coverage. Higher premiums may mean lower deductibles and coinsurance, and lower premiums may have higher deductibles and coinsurance. It’s important to look at the overall cost for anticipated coverage needs rather than just looking at the premium.
A deductible is the amount owed before health insurance coverage starts to pay. A high deductible plan may be combined with a Health Savings Account (HSA) which allows payment for qualified medical expenses with tax-free money. For 2022 the IRS defines a high deductible plan as any plan with a deductible of at least $1,400 for an individual or $2,800 for a family.
A copayment or copay is a fixed amount for health care services; for example paying $15 for a doctor visit.. A copayment may be applied toward the deductible. Depending on the plan, if the deductible has not been met for the plan year, the full amount for a visit to the doctor may be billed to you.
Coinsurance is a percentage paid for medical services plus any deductible owed. For example, if a specialist recommends surgery, a person may pay a percentage of the cost of the surgery as coinsurance.
Medicare recipients should know that both Medicare drug coverage (also called Medicare Part D) and Medicare Advantage plans have an Open Enrollment Period every year between October 15 - December 7. During this period anyone in one of these plans can join, switch, or drop a plan. Persons already in a Medicare Advantage plan on January 1st, have a special Medicare Advantage Open Enrollment opportunity from January 1 – March 31, when they can switch to a different Medicare Advantage Plan or switch to Original Medicare (and join a separate Medicare drug plan).
Talk to a licensed insurance agent to choose the healthcare plan that best suits your needs and budget. Knowing basic health insurance terms when shopping for coverage will simplify the decision process.