Individuals and families have a number of private health insurance options, and those without employer coverage may qualify for cost assistance or Medicaid. Let’s take a quick look at health insurance options for individuals and families: we’ll look at employer plans, the Marketplace and Medicaid, how the Affordable Care Act affects these options, how to figure out which option is right for you, and more!
General Health Insurance Tips
- You’ll need to know your Modified Adjusted Gross Income and where that puts you on the Federal Poverty Level for cost assistance.
- To avoid the fee for not having coverage, you’ll need to have coverage that counts as Minimum Essential Coverage.
- To get the best plan, you’ll need to understand cost sharing, your medical needs, covered benefits, and networks.
Employer Coverage (about 50% of Americans)
- Nearly half of Americans under 65 get their health insurance through work.
- When it comes to group plans, employers have lots of options from ObamaCare’s SHOP (Small Business Health Options Program), to private group plans, HRA’s, Employer Payment Plans, and other healthcare arrangements.
- While employers have lots of options for providing coverage, employees will tend to have only a limited selection of plans to choose from.
- It’s usually a wise move for employees to take advantage of employer-sponsored health options as employers typically contribute up to 50% of an employees premium. FSA’s and HRA’s can help pay for out-of-pocket costs.
- Employer health benefits are a form of compensation. This has tax implications for both the employer and employee.
- If a person has access to employer coverage, they can’t get cost assistance on the health insurance marketplace. Healthcare arrangements like HRA’s and Employer payment plans technically count as employer coverage and prevent cost assistance elligibility on the Marketplace.
- Typically, employers need to offer a plan to the employee’s dependents up to age 26, but don’t need to offer the spouse coverage.
- Under the Affordable Care Act, all large employers must offer coverage. Small employers are incentivized to offer coverage by large tax breaks on insurance purchased through the SHOP.
- Group plans can be unaffordable in some cases. If coverage costs more than 9.5% of household income, you can apply to get cost assistance on the health insurance marketplace.
Medicaid or other public healthcare (About 17% of Americans)
- About 17% of the population relies on Medicaid / CHIP or another public coverage type like TRICARE.
- Medicaid is a free or low-cost health insurance for adults – CHIP is the same thing for children.
- Medicaid is jointly funded by State and Federal Governments.
- In states that expanded Medicaid under the ACA, all adults making less than 138% of the Federal Poverty Level have access to Medicaid.
- Many states opted out of expanding Medicaid, and thus they have more narrow guidelines for adult eligibility.
- As a rule of thumb, those who can afford Medicaid will usually find it to be the most cost-effective option.
- Medicaid can have narrow networks due to its low cost.
- Other public healthcare programs include TRICARE and VA. Although TRICARE is sometimes counted as employer coverage, the employer is the military in this case. The coverage is publicly funded, so we put it in this group.
Medicare (About 13% of Americans)
- Most Americans over 65 are enrolled in at least Medicare parts A & B, which is known as Original Medicare. These are the public parts of the program.
- Other Medicare options include Part C (Medicare Advantage), which includes A&B and can include a drug plan, Part D (Prescription Drug Coverage), and Medigap. These can be paired in different ways with original Medicare and are all sold by private companies.
- Medicare is also offered to those with End Stage Renal Disease (ESRD) and to some people with disabilities.
- Medicare enrollment periods are unique, and missing enrollment periods can mean you pay more in premiums for life. Thus, the most important thing to understand about Medicare is when to enroll.
- Supplemental Medicare plans have their own late fees and enrollment periods.
- The most important Medicare enrollment period is the initial enrollment period which spans the 7 month period before, during, and after your 65th birthday.
- The ACA also improves Medicare by mandating new basic benefits, giving seniors a free preventive visit, and lowering the price of drugs (closing the “Part D Donut hole”).
- High-earning seniors can be charged more for Medicare.
- Since supplemental Medicare is sold by private plans, shopping around for a plan is the only way to get the best deal on Medicare.
- There is no clear answer as to what is better: Medicare Advantage, Medigap with a drug plan, Original Medicare with a Part D drug plan. Much depends upon your region and your Medical needs.
Uninsured (About 10% of Americans)
- The uninsured account for about 10% of the population (down from 14% pre-ACA).
Self-insured Individuals (About 10% of Americans)
- The Affordable Care Act insured about 12 million in private plans (about 2.5% of Americans).
- About 2.5% got covered outside of the Marketplace in private individual and family plans since the ACA went into effect.
- Before the ACA, about 5% of Americans had private plans.
- Americans who qualify for the Marketplace – those making between 100% – 400% FPL – can get covered for about 2% – 9.5% household income per person.
- Silver plans sold on the Marketplace are one of the best health insurance plans. They qualify for all cost assistance types. The drawback is that they can have narrow networks due to their popularity and giant cost-sharing benefits.
Percentage of US population in each category is from the Kaiser Family Foundation compilation of data for 2011 Based on analysis by the Kaiser Commission on Medicaid and the Uninsured and the Urban Institute of the US Census Bureau’s Annual Social and Economic Supplement to the Current Population Survey (CPS ASEC). The CPS supplement is the primary source of annual health insurance coverage information in the United States. Statistics have been updated using 2015 HHS enrollment number data.