What You Need To Do Before Next Week’s Health Care Enrollment Deadline

Originally published on Forbes.com (you can read the original here)

December 15th, 2015 is the first major deadline for this year’s health care open enrollment period. So if you’re an entrepreneur paying for your own health insurance, then it may be time to check your plan to see if it is still the right one for you. And if you don’t have health insurance, then be forewarned, the penalties are going up.

When it comes to issues like this, I rely on Rob, Wealth Factory’s disability and health insurance specialist. So recently I gave Rob a call to find out what entrepreneurs need to know about next week’s deadline and what else they may want to do during open enrollment.

Here are the highlights of our conversation, continued after the jump:

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What is the December 15th Deadline?

The Affordable Care Act sets up open enrollment periods once a year for all individual health insurance plans. This year, open enrollment started on November 1st and will close January 31st, 2016. If you’re not already covered through an employer or a spouse, then you must sign up for a health insurance plan or face a penalty. If you have a qualifying life event, like a marriage, birth or moving out of state, you may sign up for health insurance outside of this enrollment period. But other than that, this is your chance to get insured.

In order to avoid penalties, you must meet minimum essential health insurance coverage for all of 2016 or else pay a penalty for each month that you were not. And that’s why the December 15th deadline is important. December 15th is the last day to sign up for a health plan that will start on January 1st. Starting December 16th, your plan may not be effective until February 1st and you will likely owe a penalty.

(There are some exemptions that may save you from the penalty.)

But what if you already have a health plan?

You May Want to Change Plans

According to Rob, even if you’re happy with your current health care plan, it’s still a good idea to review your plan and compare it to the marketplace. Why? Because changes in health care insurance are occurring so rapidly, your health care plan may no longer be the same health care plan. And the biggest change may be the price.

eHealth conducted a 2015 study during the first week of open enrollment and found that 58% were shopping for a new plan because their premiums went up for 2016. And 33% said the benefits for their plan were changing, which almost always included a higher deductible. The average premium increased $36 per month, but sometimes the change can be much higher.

Says Rob, “Just the other day I got a call from a client. They’d received a notice that their health care plan was going up $200 per month, which shocked them. They were used to seeing their premiums rise $20-$30 per month each year. Even $50 per month would have been a large jump, but $200 per month was 10-times what they were used to to. And their next worry was how much is it going to increase next year?”

If your premiums have gone up, you don’t have to just accept it. You can search the marketplace for a better deal. Be careful though, a lower premium may mean less benefits. And sometimes the best deal may be to keep the plan you have–even with the higher premiums.

3 Ways To Shop For a Plan

You have several options to choose from when shopping for a plan.

One option is Healthcare.gov. If your state has a health insurance exchange, Healthcare.gov will send you to your state’s official site. If your state doesn’t have an exchange, Healthcare.gov will help you find a plan on the Federal exchange.

While the site is doing better than when it first launched, Rob reports several of his clients have come to him after bad experiences with Healthcare.gov. Some claimed that they were being bombarded with sales calls after giving up their info, and at least one person told Rob that a customer support representative refused to answer any questions unless they promised to buy insurance at the end of the call.

Another option is to go to direct to an insurance provider’s website like UHC.com (United), Aetna.com or Humana.com. Sometimes this can make sense if you know that your preferred doctor or healthcare provider only accepts insurance from one company, but usually it’s better to use a site like ehealthinsurance.com to browse plans from multiple providers at different price points.

A third option for choosing a health care plan is to call up a traditional insurance broker like Rob. If the broker has proper experience with health insurance, they can help you find a plan that matches your unique circumstances. This way you are spending your health care dollars wisely and are less likely to get caught with insurance that doesn’t match your needs.

A broker can also act as your advocate to insurance companies so that you’re not on the phone to customer support for 3 hours trying to get some answers.

Important Factors to Consider

I wanted to know what makes for a good health plan, so I asked Rob what are important factors to consider. As it turns out, the “best” health plan is unique to your circumstances.

Do you have a favorite doctor, dentist or other health care provider? Then you better make sure a health plan covers their services before you sign up.

Says Rob, “I tell clients not to just go their health care provider’s web page to see if they take a certain insurance or not. The website isn’t going to have a flag that tells you that a certain insurance network has been a nightmare to work with–and they’re not going to continue as a provider for that insurance after January 1st. But if you call the office, they probably will tell you that. So you need to do the homework. First, identify the providers that you currently go to, and then make some calls. That may mean making 4-5 different phone calls, but it’s going to narrow down your options.”

Next, do you go to the doctor regularly? Do you take many medications? If so, then you’re more likely to want a Gold or Platinum health plan that has higher premiums, but a lower deductible for medication and doctor visits.

Says Rob, “If you’re someone that presently, or within the recent past, has needed medication on a regular basis, then that’s an obvious case where you need a plan with prescription coverage. Or if you or your spouse is a diabetic, for example, and make regular office visits, then you need to have those visits covered and not have a high deductible plan.”

On the other hand, if you’re relatively healthy and don’t need much care throughout the year, then you may want to choose a Silver or Bronze plan that has lower premiums and a higher deductible. It all comes down to your unique needs.

The bottom line is health care coverage is important. It’s not cheap, but neither are medical bills, so it’s one of the most important financial decisions you can make. As Rob says, the costs of choosing the wrong plan can be much more than spending a little time each year to review your current policy.

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