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Almost half of Americans have health insurance through their work, according to the Kaiser Foundation. The rest of the country relies on private policies, government programs and membership organizations to cover their healthcare needs.
There are a few paths you can take to get health insurance in the US — and the best chance to buy an affordable policy is during the annual open enrollment period.
Each option has its own eligibility requirements and steps to apply.
Under the Affordable Care Act (ACA), businesses with 50 or more employees must provide health insurance. If your company meets that criteria, you’ll be able to enroll in a policy during its annual enrollment period. The dates vary, but most companies open up enrollment between September and December each year.
With employer-sponsored coverage, your employer pays the bulk of your premiums — typically 70% to 80%. To put this into context, the average annual premium in 2019 was $6,972, according to the Kaiser Family Foundation. On average, employers subsidized $5,483 and employees paid $1,489 — making this an affordable way to get coverage for many.
If your company has fewer than 50 employees, it may still offer health insurance as part of your employee benefits, along with dental, vision, disability and life insurance. Any contributions you make come out of your paycheck.
Thanks to the ACA, US citizens can apply for a subsidized policy through Healthcare.gov. To qualify, you’ll need to prove you live in the US and aren’t incarcerated or eligible for Medicare.
The site guides you to a state or federal marketplace — often called an “exchange” — where you can browse for policies that suit your needs and budget. If you’ve heard people talking about “Obamacare,” they’re referring to these plans.
The policies fall into one of four “metal” categories: bronze, silver, gold and platinum. These groups have nothing to do with the quality of care you’ll receive; instead, they lay out the portion of your healthcare bills the plan will pay. You can also expect to pay a monthly premium to maintain your coverage, as well as copays, coinsurance and deductibles when you get care — and the amount comes down to the type of plan you get.
This table breaks down the cost sharing of each plan, according to HealthCare.gov. As you’ll see, platinum plans cover the biggest portion of your bills and have a price tag to match — whereas bronze plans are the most basic option.
|Metal||Percentage the plan pays||Percentage you pay||Who it’s best for|
|Platinum||90%||10%||Platinum plans offer solid value if you have a medical condition and want to pay a higher premium to cut down on other medical costs.|
|Gold||80%||20%||The premiums are high and the costs of care are low, making gold plans best for those who regularly see a doctor and are willing to pay a higher premium to pay for more of their bills.|
|Silver||70%||30%||Those who qualify for “extra savings,” and are okay with paying a higher premium to cover more of their routine care costs.|
|Bronze||60%||40%||With the lowest monthly premium, bronze plans are ideal for budget shoppers who want to protect themselves from worst-case medical scenarios. Since the deductibles are high, you’ll have to pay for most of your routine care yourself.|
Another option is buying an individual policy, as opposed to getting coverage through an employer or marketplace. To go down this route, you can apply directly through an insurer or enlist an agent or broker to help you get quotes and apply for a policy.
If you decide to do your own research, go to the major health insurance company websites and enter your ZIP code to see plans available in your state. Then, browse for plans based on a) the type of coverage you want and b) the deductible you can afford to pay.
There are a few types of plans to choose from, and they determine how much control you have over your coverage and which doctors you can visit.
|Type of plan||Do you need to see an in-network doctor?||Do you need a referral to see a specialist?||Key features||Who it’s best for|
|Health maintenance organization (HMO)||Yes, unless it’s an emergency||Yes||Low premiums, but you’re limited to the doctors contracted to the HMO.||Those who prefer a primary doctor to handle their care and choose their specialists.|
|Preferred provider organization (PPO)||No||No||Reduced rates if you go to a preferred provider, but you’re free to see out-of-network doctors.||Those who want to choose their provider and can afford higher out-of-pocket costs.|
|Exclusive provider organization (EPO)||Yes, unless it’s an emergency||No||Limited to in-network doctors — and you’ll need to choose a primary care provider (PCP) to provide most of your care.||Those who prioritize low out-of-pocket costs.|
|Point of service (POS)||No||Yes||Low costs, but providers may be limited in scope. And you’ll need to fill out all the paperwork if you see an out-of-network provider.||Those who prefer a primary doctor to coordinate their care, but also want to make the most of more provider options.|
When you’re shopping for an individual policy, just know that the price on the website is the lowest possible price for people in excellent health. For accurate pricing, you’ll need to get a quote and provide your medical history — and always try to get quotes from a handful of companies.
Like marketplace plans, the open enrollment period lasts from November 1 to December 15 in most states. When the 45 days are up, you can’t apply for an individual health insurance policy unless you have a qualifying life event.
All individual health plans must cover these 10 essential benefits:
Before the ACA went into effect, coverage varied wildly. Insurers could deny your application, restrict your coverage or set sky-high premiums if you had a pre-existing condition.
But now, insurers have to cover you if you apply for a policy — even if you’re pregnant or suffering from a serious illness, like cancer. They can’t hike up your rates if you have a medical condition or cap the amount of benefits you recieve, either.
If you belong to an association or organization, you may be able to buy health insurance through it and access group rates. This means you’ll get a subsidized premium, but won’t be able to customize your coverage as much as if you bought a policy on your own.
To figure out if you’re eligible, think of any membership groups you’re part of or interested in joining, such as a union, alumni association or professional or trade organization — like your local chamber of commerce. Then, head to their website and search their “benefits” section to see if they offer health insurance. And if you’re not currently a member, weigh up the cost of membership before signing up purely for the health insurance benefit.
These are some of the biggest US organizations that offer group health insurance:
With healthcare sharing ministries, individuals who share a religious faith contribute to a pool of money — and the ministry dips into this fund to cover the healthcare costs for its members.
While it’s a low-cost way to get coverage, this arrangement isn’t a substitute for health insurance. Ministries typically don’t cover pre-existing conditions or guarantee funds for the conditions they do cover. You may also have to sign a waiver agreeing to follow a certain ministry-approved lifestyle, which can be controversial.
If you’re an active or retired military service member, you may be eligible for coverage through two government programs. Contact each to learn more:
Medicare is a government program primarily for retirees 65 years old or older, though people 18 to 64 years old with a qualifying disability or end-stage renal disease might also be eligible.
There are a few plans on offer, and you can sign up on the Medicare website:
The costs depend on the type of plan you choose and how much coverage you want. For the most popular plan, Part A: Original Medicare, your payroll taxes will likely pay for the policy in full. But if you were in the workforce for less than 10 years, you may be charged a small premium.
You can apply for Medicare from October 15 to December 17 each year.
Medicaid is open to low-income Americans and provides comprehensive health insurance coverage. The eligibility requirements vary by state, but you’ll typically qualify if your income is at or below 138% of the federal poverty level. That level is $17,609 for a single person, $23,791 for two people, and $36,156 for a family of four. This limit may increase if you’re pregnant or have children, a disability or a serious illness.
The cost of Medicaid comes down to your income, but if you qualify, you’ll pay less than you would for an employer or individual plan.
There’s no set open enrollment for Medicaid. You can enroll in the program at any time on the website.
With most health insurance policies, you only have a short window to sign up for coverage. It’s known as open or annual enrollment, and the dates differ depending on the policy you’re getting.
But there are exceptions for major life changes, or “qualifying events.” If you’re experiencing any of these situations, you may be eligible to apply for health insurance outside of open enrollment:
The COVID-19 pandemic has had a ripple effect on the economy, and around 27 million Americans lost the health insurance coverage they had through work, according to the Kaiser Family Foundation.
If you’ve lost your job, you may have health insurance until the end of the month. And losing your job is a “qualifying event,” which means you can shop around for new health insurance coverage.
Depending on your situation, you could explore these options while you’re unemployed:
Co-founder of Caribou
COBRA is a law that extends your former employer’s health insurance policy for up to 18 months. You have to have gone through a qualifying event (eg. fired, changing jobs, or getting divorced) to be eligible to extend your former employer’s coverage. COBRA only applies to employees whose health plan is subject to the COBRA law, which is typically dictated by the size of the company (>20 employees) and if group health plans are offered.
What rights do former employees have when requesting COBRA coverage?
You have a right to extend your coverage through COBRA if that option is available to you through your ex-employer. You have 60 days from your last day at work to choose to extend your health insurance coverage with COBRA. Even if you wait until the last day, you’ll have to pay your monthly premiums for the last 2 months. This means that you’ve been covered for those two months, so you can claim any medical expenses from during that time.
How much does COBRA coverage cost, on average?
COBRA’s cost varies based on individual or family coverage, and on average costs $1084 per month. The first step in calculating COBRA’s cost is to determine your monthly premium with your former employer. Find your insurance deductions on your last pay stub and look for the amount that you and your employer paid for your health insurance. Since you will be taking on the full cost, add both of these numbers up and then add a 2% administration fee. For example, if your employer paid $655 and you paid $345 in insurance premiums, then your total monthly premium is $1000. Adding 2% brings you to a total of $1020 ($1000 x 1.02).
If the American Rescue Act (ARA) is passed, what impact will the COBRA provisions have?
The ARA is proposing a subsidy that will cover 100% of COBRA insurance premiums for employees who lost their jobs because of the pandemic, including dependents (eg. spouses), until the end of September, 2021. This allows employees who lost their job to stay on their company-sponsored health plan without having to take on the hefty fees of now needing to cover the portion their employer used to pay on the employee’s behalf.
Most Americans have health insurance through their work, Medicare and Medicaid. If you don’t, you can apply for coverage through a state or federal marketplace, the military or a membership organization, or shop for a policy on your own.
Whichever path you choose, compare each policy’s features and costs to get the best coverage for your needs — and take note of any enrollment period.
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