Wednesday, September 18, 2013

"I just got a letter from my insurer saying that I have to switch health plans because of Obamacare. What can I do?"

Tens of thousands of Washingtonians are -- or will be soon -- getting letters from their health insurers telling them that their plans are going away and that they'll need to pick a new one.
"In order to comply with the new health care law, your current health plan will be discontinued on Dec. 31, 2013," reads one of the letters, which are being sent out by about half a dozen insurers. "But don't worry. You have lots of options."
What's going on? Under health care reform, each health plan has to cover 10 essential benefits. Some of those benefits -- such as prescription drug coverage -- aren't included in many health individual health plans today. The new plans also have to include numerous preventive services, and meet standards for what they'll cover.

In some cases, those benefits mean that the premiums for the new plans will cost more, or that deductibles will be higher.

So what can you do?

1) Remember that as part of health care reform, many consumers will now qualify for subsidies to help offset costs. If your household income is less than 400 percent of the federal poverty level (e.g. $62,040 for a family of two, or $94,200 for a family of four), you may qualify for those subsidies. Also, expanded Medicaid coverage will be available -- for free -- for households that are at less than 138 percent of the federal poverty level ($21,404 for a family of two).

In other to get the subsidy, which is technically a tax credit, you would need to buy your health coverage through the Washington Health Benefit Exchange. Enrollment begins Oct. 1, with coverage starting Jan. 1, 2014. Here's a map with links to the rates for health insurance in the Exchange.

2) Shop around for a better deal. You do not need to stay with the insurance company you're with now, although that fact isn't necessarily trumpeted by the insurers in the letters they're sending out. So go on the Exchange -- you can still shop there, even if you don't qualify for a subsidy -- or check with a broker to see what else is available, and what it costs.

What if you have a pre-existing condition and have been turned down for health coverage in the past? It no longer matters. As part of health care reform, insurers must take all applicants. No more health screenings or questionnaires.

3) Remember that the premium is only part of the cost of insurance, particularly if you use the coverage. Your actual out of pocket costs are determined by how much of a deductible you have to meet, how much the co-pays or coinsurance charges are, what drugs are covered, etc. We calculate, for example, that the preventive care included in these policies without any copays, etc. is worth about $500.

"I was turned down for life insurance due to my health. Does this mean I can't get life insurance at all?"

Not necessarily. Different life insurers have different underwriting standards, so another company might insure someone with your health condition.

So try a different company, or try going through a broker, who might know more about which companies might be the best match for your individual situation.

Also, it's a good idea to check with your employer. Some employers offer some life insurance coverage (say $25,000 or $50,000) to their employees without requiring employees to answer health questions.