Life has a funny way of not going as planned. We get a nasty sinus infection that won’t go away, Little Tommy falls down and breaks his arm, and we find ourselves needing more than an over-the-counter sinus medicine and a bandage.
Health insurance can be costly. Here are a few ways to find coverage that won’t break the bank.
Explore ALL Your Options
Depending on your situation, you may not need to buy health insurance. Take time to see if you qualify for one of the special programs available. Medicare, Medicaid, and CHIP (the Children’s Health Insurance Program) provide low-cost health care for those who qualify.
Medicare covers those over age 65, while Medicaid covers those with very low incomes. CHIP helps children (and sometimes their families) who don’t qualify for Medicaid, but whose parents or guardians cannot otherwise afford insurance.
The best way to see if you are eligible is to apply for health plans through your state health insurance exchange.
Special note, if eligible for Medicaid or CHIP, you can enroll any time of the year and don’t have to wait for open enrollment or have a qualifying event. As for Medicare, when you’re first eligible, you have a 7-month Initial Enrollment Period to sign up for Part A and/or Part B that includes the three months before you turn 65, the month of your 65th birthday and the following three months.
Although a lot of attention is given to the state healthcare exchanges, they are not your only option to find cheap health insurance. There are other places to find affordable care options, here are a few to consider:
Buy From Insurance Companies Directly
Insurance companies may have several more plan options not shown on the state exchanges. Many insurance companies allow you to compare plan details, see detailed information, and apply for coverage online.
To note, buying from a single company won’t allow you to compare other plans and may not be the best option for saving money unless you know you want coverage from a specific company.
Purchase Through an Agent
Insurance agents can help if you’d like an expert to help you make your decision. There are two types of insurance agents:
Captive Agents – offer health insurance products through one company.
Independent Agents – also known as brokers, can help you choose between several insurance companies and products.
Both types of agents have strengths. If you are looking to save money, you may want to go with a broker, as they can help you compare many plans from several companies.
Use an Online Insurance Finder
Another handy option is using an online insurance finder. It’s like using an independent agent, without having to put in the time and effort to meet an agent in person. Once you answer questions about your individual needs, the program will pull plans from several companies not shown by your state marketplace.
Under 26? Use Your Parents Insurance
The Affordable Care Act (ACA) lets you stay on your parent’s health insurance plan if you are under 26, even if you’re married or otherwise financially independent. Make sure your parent’s insurance offers in-network care for where you live as out-of-network costs add up quickly.
Consider High-Deductible or ‘Catastrophic’ Plans
If you won’t be using your health insurance much, a high deductible plan with low monthly premiums may be a good option.
Under the Affordable Care Act, you’re eligible for a catastrophic plan if you’re under 30, or over 30 and qualify for a hardship exemption (dire financial circumstances such as recent eviction, bankruptcy, and others. See a full list on healthcare.gov).
To note, starting in plan year 2018 (filing taxes in April 2019), you don’t have to fill out an application to get a hardship exemption. You can claim the exemption on your 2018 federal tax return without having to submit documentation.
Under the Affordable Care Act, catastrophic health plans must cover the same minimum health benefits as other health plans. Preventive services, emergency services, prescription drugs and more are covered. The difference with a catastrophic plan is you must pay for all other health care costs until a high annual deductible is met. Experts say only those who are young and healthy should consider catastrophic health insurance as these plans can become very expensive if your need for care increases.
To note – catastrophic health insurance plans are not eligible for subsidies that apply to other state marketplace plans. If you qualify for a subsidy, you may find a high deductible bronze plan to be a better choice than a catastrophic plan depending on the coverage.
Hot Tip: If you go with a high deductible plan, think about opening a health savings account (HSA). You can put tax-free money in the account to help pay for health care. HSA-Eligibility details are here.
Look Closely at Short-Term Plans
Another type of health insurance, a short-term or temporary plan, are likely the cheapest option around. In addition, if you are shopping outside open enrollment or don’t have a qualifying event that makes you eligible for special enrollment, these plans are your only choice.
While a cheap option, it’s important to thoroughly investigate these stripped-down policies before signing up. To begin with, the ACA protections don’t apply to short-term policies. For example, if you have pre-existing conditions, short-term providers may not cover you, or if you get really sick or severely injured, they may not renew your plan.
As these plans are not ACA approved, preventative care, such as immunizations and physicals likely won’t be covered. These plans also have a lifetime care cap, which means if you become seriously ill or injured you could run out of coverage.
Short-term plans come with several limitations. Though a cheap option, experts say they are best suited as a last resort between jobs and that low-cost catastrophic or bronze plans will likely offer better coverage.
As we never know what each new day brings, having health insurance is important. Take some time to explore all the options to find the best fit for you.
Disclaimer: the content presented in this article are for informational purposes only, and is not, and must not be considered tax, investment, legal, accounting or financial planning advice, nor a recommendation as to a specific course of action. Investors should consult all available information, including fund prospectuses, and consult with appropriate tax, investment, accounting, legal, and accounting professionals, as appropriate, before making any investment or utilizing any financial planning strategy.