As an exchange/Marketplace enrollee receiving advance payments of the premium tax credit, it’s crucial that your income estimation be as accurate as possible in order to ensure that advance payments align with what your actual earnings will be when filing your taxes in spring. Should your income fluctuate throughout the year, be sure to notify the marketplace accordingly to avoid having to repay early payments later.
1. Reduce your deductible
With a high deductible health insurance plan, it can be challenging to meet its costs. This is particularly true if you live paycheck-to-paycheck or lack savings. While using credit might tempt you, using it may put you deeper in debt than necessary and make saving for other expenses more challenging.
If your health deductibles are becoming burdensome to pay, there are steps you can take to try to lower them. One is to negotiate a payment plan with your healthcare provider; although they cannot waive or discount your deductible (that would violate Affordable Care Act regulations), they may agree to work out an affordable monthly installment plan with you. Another strategy would be switching health plans during annual open enrollment periods to find one with lower deductibles.
Finally, it may also be worthwhile to find less-expensive treatments for your condition. This could involve finding cheaper medications or switching up medical procedures altogether; you might even be able to avoid surgery altogether by switching over to an alternative device.
If you have a low income, government subsidies may help with health care costs. This could include premium tax credits and cost-sharing subsidies; eligibility will depend on how closely your household’s income falls to the federal poverty line. You can estimate this income by using modified adjusted gross income (MAGI). Simply add up all paychecks of all household members who will use health insurance plans within your MAGI calculation.
Remember that under the Affordable Care Act (ACA), all non-grandfathered major medical plans must include preventive services without cost sharing – this includes mammograms and colonoscopies as well as other screening tests – even if your deductible is high, take advantage of free or low-cost screening tests in order to stay healthy and prevent more costly issues down the line.
2. Reduce your out-of-pocket expenses
Out-of-pocket costs refer to amounts you spend for healthcare services outside your monthly premium payment, such as copays, deductibles and coinsurance. Many health insurance plans include an annual out-of-pocket maximum that once reached will trigger 100% coverage from insurance. While each healthcare plan’s limit varies widely between providers; typically plans with higher monthly premiums tend to have lower out-of-pocket maximums than others.
However, it’s essential to keep in mind that the annual out-of-pocket limit differs from your deductible. Although often used interchangeably, these two terms should not be confused as equivalent.
One way to reduce out-of-pocket healthcare costs is through the use of a health savings account (HSA) or flexible spending account (FSA). Both accounts allow you to set aside pre-tax dollars that can then be used for out-of-pocket expenses not covered by your health plan, such as deductibles, copays and coinsurance payments.
One way to lower out-of-pocket expenses is to ask for discounts on healthcare services. Healthcare providers tend to give discounts in order to maintain customer relationships; new customers especially may benefit from using coupons or asking for a discount when signing contracts for healthcare. Doing this can save both you and your employer significant sums of money!
If your income falls between 100 percent and 400% of the federal poverty level, government subsidies could help cover your health insurance. These come in the form of premium tax credits and cost sharing reductions that offset your monthly premium payment while cost sharing reductions help offset out-of-pocket expenses like deductibles and copays.
To qualify for subsidies through the Marketplace, enroll in a Silver plan during a Special Enrollment Period based on your estimated household income and maintain it throughout the year so as not to affect advance payments from them. Should anything change with regard to income during that year, make sure that Marketplace knows immediately so they can recalculate your subsidy amount accordingly; additionally contributing to FSA or HSAs can help lower taxable income for subsidy eligibility consideration.
3. Look for a lower-premium plan
Your choice of health insurance plan will have an enormous effect on your monthly premiums. There’s an alphabet soup of HMOs, PPOs, EPOs and POS plans available, each providing various levels of coverage and cost structures. Before selecting one of them, carefully review its summary of benefits to understand exactly what each offers; also note whether certain services must remain within its network or specialist referrals must come via primary care physician referral; all these considerations could exacerbate or alleviate out-of-pocket expenses depending on what plan you choose – they could significantly alter either increases or decrease them significantly!
Once again, you may need to determine the type of provider you prefer. With the provider finder available in both the federal online marketplace and state marketplaces, you can search doctors and hospitals near your area to see which services they accept – this way avoiding having to incur out-of-pocket expenses for anything your provider doesn’t cover.
One factor to keep in mind when selecting a health plan is its deductible amount, which represents the minimum expense each year before health insurance starts covering your care. There are plans with low or no deductibles; however, these usually have higher monthly premiums.
To choose the appropriate plan for you and your household needs, estimate how much health care you anticipate needing this year and enter that information into a marketplace or state marketplace tool to compare annual costs between plans. Pay particular attention to deductibles and out-of-pocket maximums as these will have the biggest effect on monthly premiums and total care costs. You may qualify for assistance to reduce monthly premiums or out-of-pocket expenses based on income; using the tool will show which subsidies might apply.
4. Look for an employer-sponsored plan
Employer-sponsored plans are policies purchased and provided to their employees by employers, with typically shared costs split among themselves and employees. Employer-sponsored plans tend to be more affordable than individual/family major medical coverage in the private market and provide greater flexibility with respect to benefits such as preventive care, prescription drug coverage and supplemental coverage.
As part of the Affordable Care Act (ACA), most large employers must offer affordable health coverage or face penalties; it would therefore be in your financial best interests to seek group coverage if available.
If employer-sponsored coverage doesn’t fit within your budget, premium subsidies through the Affordable Care Act exchange may help offset some of your out-of-pocket costs such as monthly premiums, deductibles and copays. These subsidies require proof that household income falls within 400% of federal poverty level to qualify; once approved they’ll help offset monthly premium payments as well as out-of-pocket expenses like deductibles and copays.
Contributions to health savings accounts (HSAs) and pre-tax retirement plan accounts will reduce taxable income for subsidy eligibility purposes, and state laws in several states now permit individuals to use their own money when buying plans from exchanges, further expanding availability. Unfortunately, however, many noncompliant plans will likely form an increasing percentage of marketplace sales between 2021-2025, according to estimates by Congressional Budget Office.