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How to buy Health Insurance

Many Americans have become first-time health insurance buyers for medical policies with the dawn of Obamacare. But how do you avoid confusion and find the best health insurance? Here are some top tips:

Research – Be sure your insurance policy will cover your healthcare needs. Don’t forget about medications, as different plans pay different amounts for prescription drugs.

Shop for Best Pricing – What is more important – low monthly you need, what you can afford, and shop different carriers for similar plans.

Check the Network – If you have a specific doctor you want to see, ensure your doctor is in the plan’s network. If you don’t have a doctor, make sure the network is broad enough so you have a choice of providers.

Company Reputation – Does the insurance company have a reputation for paying claims quickly and standing behind its members when they need them?

Buy – Once you have chosen a plan, fill out an application form and provide payment information.

If you’re buying health insurance on the individual market for the first time, you may discover there are hundreds of plan options to choose from. That’s why it’s important to shop around for the best plan that meets your budget and lifestyle.

What is the Healthcare Marketplace?

By now you‘ve probably heard terms like Obamacare, the Affordable Care Act, and “the marketplace”… or at least you heard a lot of buzz about those phrases in the past months. But do you really understand the healthcare marketplace and why or if it matters to you? It‘s that time of year again when health insurance and Obamacare are in the news, so here‘s a quick rundown of the basics.

In a nutshell, the healthcare marketplace, or health insurance exchange, is a program meant to connect uninsured people with private or government-regulated health insurance options. These plans are made affordable by the regulations placed on providers, by federal subsidies, or both. The Affordable Care Act (ACA), which is the same thing as Obamacare, allows for states to create their own exchanges. States can band together to create a multi-state exchange, or opt to let the federal government manage the exchange for their state. Your state may be part of the “federal exchange” (opted not to create a state exchange) or a
more customized state exchange.

If you have health insurance through your employer and are happy with your coverage and costs, you likely don‘t need to visit the marketplace. If you‘re uninsured or don‘t have insurance coverage at work, it‘s important to understand your options and what the marketplace has to offer. You can purchase individual or family insurance independent of your job, and the private marketplace is often the best place to start when shopping for health insurance.

Important Health Insurance Definitions

Tax Subsidy: A tax subsidy is defined in the Affordable Care Act as cost assistance. In other words, if your income is between 100 and 400 percent above the national poverty level, you may receive a Financial reduction to better match your income level instead of paying the full cost of your healthcare insurance.

Penalty for Not Buying Health Insurance: If you have not purchased health insurance under the Affordable Care Act, you will be assessed a tax penalty. This went into effect on January 1, 2014, and is unavoidable. The penalty in 2014 is $395 or 1 percent of your income unless you qualify for an exception. You may only go up to three months without health insurance before you are assessed the penalty.

Obamacare: Officially known as The Patient Protection and Affordable Care Act, it is a health care reform signed into law on March 23, 2010, which aimed at making healthcare insurance accessible for each and every American family. The Act provides a number of new benefits, rights, and forms of protection. Some of the favorite new benefits include the elimination of pre-existing conditions as a reason to deny someone from receiving coverage and subsidies to assist others who may not otherwise be able to afford the program.

Health Mandate: The health mandate, also known as the Obamacare Mandate, states that everyone needs to purchase health insurance. If a person chooses not to purchase insurance, they will have to pay a tax penalty. There are exemptions for those who fall into certain specified groups, but the majority of the population is required to purchase insurance.

What is the Health Insurance Exchange?

The Affordable Care Act, also known as Obamacare, went into effect on January 1, 2014. All Americans must now have health insurance coverage or face paying a tax penalty. If you do not have health insurance through your employer, you are required to
purchase an Obamacare plan. Don’t think you can afford health insurance? If you are worried about the affordability of a healthcare plan, you may qualify for a subsidy

The Health Insurance Marketplace or Insurance Exchange means U.S healthcare consumers can gain access to information that will help during the shopping process:

  • Find out whether you qualify for a tax subsidy or not based on income
  • Discover different plans available in your state
  • Find out if your current plan is a qualified health plan
  • Apply for a health insurance plan online

If you don’t qualify for a subsidy or Medicaid, don’t worry! You can purchase an individual health insurance plan on the private marketplace, and the affordability might actually surprise you.

Top three considerations when thinking about buying health insurance:

  • Determine if you qualify for a tax subsidy or Medicaid
  • Find a plan that fits your healthcare needs and budget
  • If you can afford a larger monthly premium, find a plan that
    will work with a larger network of providers

Finding the Best HealthInsurance Company

When you buy individual health insurance, you want to make sure you‘re going with an insurance carrier who will be there when you need them. A.M. Best Company, an independent rating service, provides scoring on insurance company financial standings and offers its database of health carrier ratings online to help you make the right choice.

When shopping for health insurance, look for each company‘s A.M. Best rating. This scoring system provides not only ratings of insurance carriers but determines a company‘s ability to meet contract obligations to its policyholders. As an informed consumer, it‘s important for you to understand a carrier‘s:

  • Financials
  • Operating plans
  • Philosophy
  • Management

A.M. Best will help you find an individual health insurance company that will:

  • Handle claims quickly and appropriately
  • Give you the customer service you deserve
  • Be an ethical partner in your healthcare

Ratings that indicate the insurance company is secure are:
A++, A+ (Superior)
A, A- (Excellent)
B++, B+ (Good)

A.M. Best is a great resource to remember when you start looking for a health insurance plan that will work for you and your family

What Happens if I don’t buy Health Insurance?

Cost aside,most Americans would probably prefer to have health insurance to cover their medical and healthcare needs. However, it‘s not just a wish any longer. In recent years having health insurance has become the law. All U.S. consumers are required to have health insurance, either through their employer or purchased on their own. If you decide to forgo buying healthcare insurance, you can be penalized with an additional tax for not having insurance coverage. It‘s called an “individual mandate penalty,” and is intended to encourage everyone to get insured.

The penalties for 2015 are increasing since 2014. You can now be penalized up to 2% of your income or $325 per adult and $162.50 per child, whichever is higher. Make sure to take this tax into account when determining whether you can afford to be insured. If you are insured for only part of the year, you can deduct a percentage from your penalty. That means even if you gained health insurance right now for 2014, you could deduct some of the tax for the current tax year.

These tax penalties are expected to keep increasing each year with the 2016 penalty already set at $695 or 2.5% of income. Some situations may decrease your penalty, but it‘s important to research your health insurance options to see what could be most affordable for you to avoid paying the tax penalty.