Featured, Health

3 Ways to Keep Medical Debt from Ruining Your Credit

Advertiser Disclosure

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

3 Ways to Keep Medical Debt from Ruining Your Credit

Turns out, your physical well-being isn’t the only thing at stake when you go to the hospital. So too is your financial well-being. That’s because no debt is more common than medical debt.

The numbers are staggering in their scope. According to the Consumer Financial Protection Bureau, more than half of all collection notices on consumer credit reports stem from outstanding medical debt, and roughly 43 million consumers – nearly 20% of all those in the nationwide credit reporting system – have at least one medical collection on their credit report.

Now, you might be inclined to think that because you’re young or have both a job and health insurance, medical debt poses you no risk. Think again. According to a recent report from the Kaiser Family Foundation, roughly one-third of non-elderly adults report difficulty paying medical bills. Moreover, roughly 70% of people with medical debt are insured, mostly through employer-sponsored plans.

Not concerned yet? Consider that a medical collection notice on your credit report, even for a small bill, can lower your credit score 100 points or more. You can’t pay your way out of the mess after the fact, either. Medical debt notifications stay on your credit report for seven years after you’ve paid off the bill.

The good news (yes, there is good news here) is you can often prevent medical debt from ruining your credit simply by being attentive and proactive.

Pay close attention to your bills

Certainly, a considerable portion of unpaid medical debt exists on account of bills so large and overwhelming that patients don’t have the financial wherewithal to cover them. But many unpaid medical debts catch patients completely by surprise, according to Deanna Hathaway, a consumer and small business bankruptcy lawyer in Richmond, Va.

“In my experience, it’s often a surprise to people,” says Hathaway. “Most people don’t routinely check their credit reports, assume everything is fine, and then a mark on their credit shows up when they go to buy a car or home.”

The confusion often traces back to one of two common occurrences, according to Ron Sykstus, a consumer bankruptcy attorney in Birmingham, Ala.

“People usually get caught off guard either because they thought their insurance was supposed to pick something up and it didn’t, or because they paid the bill, but it got miscoded and applied to the wrong account,” says Sykstus. “It’s a hassle, but track your payments and make sure they get where they are supposed to get. I can’t stress that enough.”

Stay in your network

One of the major ways insured patients wind up with unmanageable medical bills is through services rendered – often unbeknown to the patient – by out-of-network providers, according to Kevin Haney, president of A.S.K. Benefit Solutions.

“You check into an in-network hospital and think you’re covered, but while you’re there, you’re treated by an out-of-network specialist such as an anesthesiologist, and then your coverage isn’t nearly as good,” Haney says. “The medical industry does a poor job of explaining this, and it’s where many people get hurt.”

According to Haney, if you were unknowingly treated by an out-of-network provider, it’s not unreasonable to contact the provider and ask them to bill you at their in-network rate.

“You can push back on lack of disclosure and negotiate,” Haney says. “They’re accepting much lower amounts for the same service with their in-network patients. They may do the same for you.”

Work it out with your provider BEFORE your bills are sent to collections

Even if you’re insured and are diligent about staying in-network, medical bills can still become untenable. Whether on account of a high deductible or an even higher out-of-pocket maximum, patients both insured and uninsured encounter medical bills they simply can’t afford to pay.

If you find yourself in this situation, it’s critical to understand that health care providers themselves usually do not report unpaid bills to the credit bureaus – collection agencies do. After a certain period of time, most health care providers turn unpaid debt over to a collection agency, and it’s the agency that in turn reports the debt to the credit bureaus should it remain unpaid.

“If you can keep it out of the hands of the collectors, you can usually keep it off your credit report,” says Hathaway.

The key then is to be proactive about working out an arrangement with your health care provider before the debt is ever sent to a collection agency. And make no mistake – most providers are more than happy to work with you, according to Howard Dvorkin, CPA and chairman of Debt.com.

“Trust me, no one involved with medical debt wants it to go nuclear,” says Dvorkin. “The health care providers you owe know very well how crushing medical debt is. They want to work with you, but they also need to get paid.”

If you receive a bill you can’t afford to pay in its entirety, you should immediately call your provider and negotiate, says Haney.

“Most providers, if the bill is large, will recognize there’s a good chance you don’t have the money to pay it off all at once, and most of the time, they’ll work with you,” he says. “But you have to be proactive about it. Don’t just hope it will go away. Call them immediately, explain your situation, and ask for a payment plan.”

If the bill you’re struggling with is from a hospital, you may also have the option to apply for financial aid, according to Thomas Nitzsche, a financial educator with Clearpoint Credit Counseling Solutions, a personal finance counseling firm.

“Most hospitals are required to offer financial aid,” says Nitzsche. “They’ll look at your financials to determine your need, and even if you’re denied, just the act of applying usually extends the window within which you have to pay that bill.”

If all else fails, negotiate with the collection agency

In the event that your debt is passed along to a collection agency, all is not immediately lost, says Sykstus.

“You can usually negotiate with the collection agency the same as you would with the provider,” he says. “Tell them you’ll work out a payment plan and that in return you’re asking them to not report it.”

Most collection agencies, according to Haney, actually have little interest in reporting debt to the credit bureaus.

“Think about it,” Haney says. “The best leverage they have to get you to pay is to threaten to report the bill to the credit agencies. That means as soon as they report it, they’ve lost their leverage. So, they’re going to want to talk to you long before they ever report it to the bureau. Don’t duck their calls. Talk to them and offer to work something out. They’ll usually take what they can get.”

At the end of the day, according to Haney, most people can keep medical debt from ruining their credit by following one simple rule.

“Just be proactive,” he says.

TAGS:

Featured, Health, Strategies to Save

What To Do if Your Insurance Doesn’t Cover a Health Care Provider

Advertiser Disclosure

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Smiling senior man having measured blood pressure

It’s a pretty common scenario: you’re looking to book a medical appointment, so you go to your insurance company’s website to find an in-network doctor. You book the appointment, see the doctor, and all seems well — until you get a whopping bill. Apparently, that doctor wasn’t in your network after all, and now you’re faced with out-of-network charges.

This happens more often than we think. Unfortunately, insurance company websites are notoriously fallible. Not only that, but they change so frequently that it can be difficult to nail down just who is and isn’t covered. At some point or another, just about everyone will have to deal with a situation where their insurance doesn’t cover a provider.

It’s easy to feel duped in this scenario. Navigating the ins and outs of insurance is hard enough, but there’s nothing more frustrating than being fed incorrect information.

So what should you do?

What to Do If You’ve Already Gotten the Bill

Call the doctor

Doctors don’t usually consider themselves responsible for significant out-of-pocket costs resulting from a lack of research on the part of the patient.

But if you asked the doctor or their representative about insurance coverage beforehand, you should contact them immediately if that information ends up being false. Many physicians will honor the price they initially told you or at least give a hefty discount. Don’t get discouraged if they don’t get back to you right away. Keep calling to see if you can get a lower price.

Negotiate and ask for a better rate

Most doctors have two different rates: one for insurance companies and one for self-pay individuals. If your doctor’s visit isn’t going to be covered by your insurance, call the doctor’s billing department to ask for the self-pay cost.

“Most physician offices will accept a lesser amount, especially if they know the service is not going toward a deductible,” said health insurance agent Natalie Cooper of Best Quote Insurance of Ohio.

Ask about a payment plan if you can’t afford to pay the bill in one go. Most medical offices would rather get the money a little bit at a time than not at all.

“Most physician and hospital groups will accept a small payment of $25 or $50 per month until it’s paid off,” Cooper said.

Use a health savings account

If you’re struggling to pay a medical bill out of pocket, see if you can open an HSA and use those funds to pay for it. If you owe $2,000, you can transfer $2,000 to an HSA and then pay the doctor directly from that account.

What’s the benefit? HSA contributions are deductible on your taxes. Unfortunately, only people with high-deductible plans are eligible to start an HSA. Individuals can only contribute up to $3,400 a year or $6,750 in an HSA. You can start an HSA anytime if you have an eligible healthcare plan.

The IRS says you can only use your HSA to pay for qualified medical expenses, a list of which you can find here. Funds in an HSA roll over from year to year, and you can contribute up to $3,400 annually or $6,750 for families.

You can also open a Flex Spending Account, which works similarly to an HSA. However, funds don’t roll over to the next year and users can only contribute $2,550 a year.

How to Prevent Out-of-Pocket Expenses

Ask beforehand

Many people use the insurance company’s website to find a doctor, but those lists are often out of date. Insurance information can even change daily. The only way to confirm a doctor’s status with an insurance company is to call them directly and ask if they’re a network provider — not just if they accept your insurance.

“When they are a network provider, they are contractually required to accept no more than the negotiated contracted rate as payment in full, which is usually less than the billed rate,” said human resources expert Laurie A. Brednich. “When they say they ‘accept xyz insurance,’ they are usually not a network provider, but will file the claims on your behalf, and you are responsible for the full billed charges.”

It can also be helpful to give them your insurance group and account numbers beforehand so there’s no question about your specific policy. The more specific you can be, the more accurately you’ll be able to navigate the insurance labyrinth.

Find out if all procedures and doctors are covered

Have you ever been to a doctor who’s recommended you see a specialist for a certain procedure — only to find out that the specialist isn’t covered by your insurance, even though they’re in the same building?

When a doctor recommends you to a colleague, they’re not confirming that the other physician is covered in-network. Before you make the appointment, talk to the billing department to see what their policies are. You can request an estimate in writing beforehand so you’ll have an idea of what the costs will be.

Some procedures might not be covered even if they’re being ordered by your in-network doctor. If your doctor sends your results to a lab, that lab might be out of network, even if your insurance covers the doctor who ordered them.

Confirm the lab’s status before you go in. If it’s too late, call your insurance and ask if they can bill the service as in-network. Cite the fact that you weren’t aware the lab would not be covered.

If they refuse, contact the doctor’s office and explain your situation. Ask them why they used an out-of-network provider and see if they’re willing to write off the bill. Be polite, but firm.

Ask the doctor to apply

When Julie Rains’ insurance changed to a preferred provider plan, she discovered her trusted doctor was now going to be out of network. Instead of searching for a replacement, she asked if her physician would apply to the insurance company to be covered by her new plan. He agreed.

It took almost two months for him to be accepted, Rains said. If you’re going this route, it’s best to start as soon as you find out your insurance company has changed policies. Rains said between the time she found out about the changes and when they went into effect, her doctor had already been approved.

You might have less luck with a doctor you’ve only been seeing for a short time, but most medical professionals take long-term patient relationships seriously — especially if your whole family goes to the same office. As always, it doesn’t hurt to ask.

TAGS:

Health

How to Use Your Health Savings Account (HSA) as a Retirement Tool

Advertiser Disclosure

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Medical expenses are no joke, and that is especially true for consumers saddled with high-deductible health plans (HDHPs). Since 2011, the rate of workers enrolled in HDHPs jumped from 11% to 29%, according to the Kaiser Family Foundation.

For people enrolled in one of these HDHPs, chances are they’re familiar with the HSA, which stands for health savings account. HSAs are useful, tax-advantaged savings vehicles that allow consumers to contribute pre-tax dollars to a fund they can use for out-of-pocket medical expenses.

What HSA users may not realize, however, is that they can also hack their HSA and transform it into a tool for future retirement savings.

Before we explain further, you need to understand how HSAs normally work and who can take advantage of them. From there, you can use a strategy that allows you to use your health savings account as a powerful retirement tool that will help you manage your biggest expense once you retire.

How to Invest Through a Health Savings Account (HSA)

Health savings accounts allow you to contribute a set amount each year. As an individual, you can contribute up to $3,400 for 2017. Families can contribute up to $6,750, and the catch-up contribution for those over 50 allows you to put in an additional $1,000.

The money you contribute is tax free, meaning it reduces your taxable income in the current year. Once your money is in an HSA, you can hold it in cash or invest your savings to increase its earning potential. If you choose to invest, you can explore a variety of options.

But before you get too excited about the possibilities here, remember: not everyone gets access to HSAs. As we noted before, you need to have a high-deductible health plan before you qualify to open one of these accounts, which may or may not make sense for your financial situation.

You don’t have to use the HSA provider associated with your employer’s health insurance company, says Mark Struthers, a Certified Financial Planner and certified public accountant with Sona Financial.

“HSAs are individual accounts that don’t have to go through your employer. You can shop around for the lowest fees and best investment options,” Struthers says. And unlike their close cousin the Flexible Savings Account, HSAs are portable, meaning you can take your HSA with you if you leave the employer you opened it with.

Within the HSA itself, explains Struthers, you also get to choose many types of investments. “In addition to low-risk, savings-type accounts, you can invest in the same type of fixed income and equity mutual funds that may be in your 401(k) or IRA,” he says.

Just like all other investments, protecting against the risk of losing your hard-earned money is an essential step to take. Tony Madsen, Certified Financial Planner and president of New Leaf Financial Guidance recommends taking a hybrid approach.

“I typically advise my clients to leave two years’ worth of the maximum out-of-pocket expenses in cash in their HSAs,” Madsen explains. “Then, we include the rest in investments that are in line with the client’s overall retirement allocation.”

When you’re ready to withdraw your HSA contributions or your earnings, you can do so without penalty — and again without paying tax — anytime, so long as you spend the money on qualified health care expenses.

Examples of qualified expenses include doctor’s fees and dental treatments, vision care, ambulance services, nursing home costs, and even services like acupuncture or treatment for weight loss. It also includes things like crutches, wheelchairs, and prescription drugs (but does not include over-the-counter medications).

Why HSAs Are Great for Retirement Savings

Here’s what makes your HSA such an attractive vehicle for retirement savings:

If you can contribute to your HSA, invest it wisely, and leave the money in the account just like you would leave the money in your 401(k) or IRA until retirement, you can build a sizable nest egg to use specifically on health care costs after you retire.

Not only will you have a fund for medical expenses, but it’s also money you can use tax free!

That’s a big deal, because health care will likely be your largest expense in retirement. Fidelity estimates couples retiring in 2016 can expect to pay up to $390,000 for medical expenses and long-term care during their golden years.

Health savings accounts are designed to help you pay for medical expenses, tax free. No other account offers so many tax advantages for savers.

You can contribute money to the account tax free. Then you can invest that money, and the earnings are also tax free. If you withdraw the money and use it on qualified health expenses, that money is free from tax too.

In addition to the tax advantages, the funds you contribute to an HSA roll over from year to year. That means you don’t have to spend what you saved until you choose to do so.

(This is different from a Flexible Spending Account, where funds are subjected to a use-it-or-lose-it policy. If you don’t spend the money you put into the account by the end of the year, you don’t get it back.)

And health savings accounts aren’t just liquid savings vehicles. You can invest money within them, often within the same kind of mutual or index funds that you might invest in within a Roth IRA or brokerage account.

When It Doesn’t Make Sense to Use an HSA for Retirement Savings

While HSAs can provide a great, tax-free way to save and pay for qualified medical expenses, your priority should be on selecting the best health care plan for your needs first and foremost. If an HDHP makes sense for you, then you can look at using a health savings account.

If you have an HSA already or currently qualify for one, the next step is to consider hacking it to make it work even harder for you. You can transform your account from a good way to manage medical costs into a tool that makes it easier to bear the brunt of your projected retirement expenses.

This strategy may not work if you currently feel overwhelmed with the cost of your health care and need to take advantage of the tax-free savings and spending power today, instead of waiting for retirement.

Because you’re already in a high-deductible health plan if you have an HSA, that also means you are liable for greater out-of-pocket expenses if you seek treatment.

At a minimum, HDHP deductibles start at $1,300 for an individual or $2,600 for a family. Many HDHPs come with deductibles that range upward of $4,000.

Unless you already have an emergency fund with at least enough money to cover the cost of your deductible should you need to pay it, taking on an HDHP can leave you in a bad financial situation if a serious medical concern arises.

Here’s what you need to think about and ask before you switch to an HDHP:

  • Do you expect to spend a lot of money on health care expenses in the next 5 to 10 years? If you’re young and have no health concerns, your expenses will likely be low and manageable.
  • Do you currently have room in your monthly cash flow for occasional unexpected or increased expenses? If your budget can handle a few doctor’s bills here and there, you may be able to handle health care costs with regular income while you’re young.
  • Do you have an emergency fund, and if so, is it fully funded? Would paying your full deductible wipe out that savings? If so, you may want to create a bigger rainy day fund before you take on an HDHP.
  • Will you save on premiums if you switch to an HDHP? Often the higher deductible can provide you with a lower monthly premium, which can help free up more money in your monthly cash flow to pay for health needs as they arise — but that’s not always the case, so compare plans before making decisions.
  • Can you contribute a significant amount to your HSA? Switching to an HDHP just to get an HSA doesn’t make sense if you’re not close to making the maximum contribution to the account each year.

You can also use a tool created by Hui-chin Chen, Certified Financial Planner with Pavlov Financial Planning. She designed a decision matrix where you can input your own financial information and numbers, and see if an HSA makes sense for you based on that information.

If you’re already on an HDHP and like your plan or if you decide you want to switch to one, open an HSA and start saving. At the very least, you can save money tax free, invest it tax free, and use it tax free on qualified medical expenses.

And that’s a great situation, even if you can’t contribute money and leave it in the account all the way until retirement. If you’re able to contribute and let your savings compound until you retire, great! Use your HSA as a retirement tool to help you cover your biggest expected expense in life after work.

“A ‘good’ HSA decision is to have one and use the funds you saved as you need them,” explains Brian Hanks, Certified Financial Planner. “‘Better’ is maximizing your family contribution each year and using the funds as needed. A ‘best’ situation is to maximize your family contribution, not use the HSA account for medical expenses, and treat it as a second 401(k) or retirement account instead.”

TAGS:

Featured, Health, News

Trump’s Congressional Speech Debrief: 5 Changes He Has in Store for Obamacare

Advertiser Disclosure

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Trump’s Congressional Speech Debrief: 5 Changes He Has in Store for Obamacare

In his first speech to Congress Tuesday night, President Donald Trump outlined the overhaul he and his administration plan to make to the Affordable Care Act, known as Obamacare.

The proposed new health care plan now heads to the Congressional Budget Office and could face more changes as Democrats and Republicans battle over it in the House and Senate.

Trump urged Congress “to save Americans from this imploding Obamacare disaster.”

The president promised to repeal and replace Obamacare. Here are five key ways he plans to dismantle the current health care system.

You could be in a high-risk pool if you have a pre-existing condition

“First, we should ensure that Americans with pre-existing conditions have access to coverage, and that we have a stable transition for Americans currently enrolled in the health care exchanges,” Trump said in his speech Tuesday night.

A draft of revisions to the Affordable Care Act leaked to Politico on Feb. 24 references high-risk pools, although Trump did not discuss them in his speech.

States would have the ability to create high-risk pools for people with pre-existing conditions who are searching for health care. According to the draft, states would receive $100 billion over nine years in “innovation grants” that would be used to fund high-risk participants, news outlets such as CNN reported.

“High-risk pools would need a lot of taxpayer funding to work properly, experts say,” the Commonwealth Fund, a private nonpartisan foundation that supports independent research on health and social issues, tweeted after Trump’s speech.

You could receive a tax credit — even if you don’t deserve one

Tax credits and expanded health savings accounts could help Americans purchase their own coverage. It should be “the plan they want, not the plan forced on them by our government,” Trump told Congress.

Tax credits based on age, with the elderly receiving higher tax credits, would take the place of Obamacare’s income-based subsidies.

“For a person under age 30, the credit would be $2,000. That amount would double for beneficiaries over the age of 60, according to the proposal,” reported Politico prior to the speech.

The credits were also heavily criticized by some GOP members.

“So the headline is that the GOP is reducing subsidies to needy individuals when in fact, the growth of the taxpayer-subsidized reimbursements will actually increase,” Rep. Mark Meadows (R-N.C.) told CNN. “The total dollars that we spend on subsidies will be far greater. So you can be a millionaire and not have employer-based health care and you’re going to get a check from the federal government — I’ve got a problem with that.”

“What are tax credits & savings accounts going to do for those who don’t have money to spend on healthcare in the first place?” tweeted Advancement Project, a national civil rights organization.

Chris Rylands, a partner in the Atlanta office of Bryan Cave LLP, says many people are worried that the tax credits will make it difficult for low-income participants to afford coverage.

Under the current system, many individuals eligible for a subsidy are immune to price hikes in insurance because the government picks up such a large portion of the cost. The proposed Republican system might make them better consumers, says Rylands, whose practice focuses on employee benefits.

“However, given the complexity of health insurance plans and the opacity of the pricing of health care services, it’s not clear whether individuals can really become well-informed consumers,” Rylands says.

You could lose Medicaid

Trump said his changes would give governors the resources and flexibility they need with Medicaid “to make sure no one is left out.”

Under the Trump administration’s revisions, Medicaid would be phased out within the next few years. Instead, states would receive a specific dollar amount per citizen covered by the program. States would also receive the ability to choose whether or not to cover mental health and substance abuse treatment.

“Medicaid is the nation’s largest health insurer, providing coverage to nearly 73 million Americans,” tweeted the Commonwealth Fund after Trump’s speech. In a follow-up tweet, it said capping spending for Medicaid will reduce coverage rates and increase consumer costs and the federal deficit.

However, the Center for Health and Economy, a nonpartisan research organization, reported in 2016 that block-granting Medicaid in the states will lead to additional savings. H&E projects that the decrease in the use of Medicaid funds, by block-granting Medicaid in the states and the repeal of the Medicaid expansion, would be an estimated $488 billion from 2017 to 2026.

Rylands points out that this will not be a popular provision in Congress.

“What I heard here — although [Trump] didn’t say so in so many words — is that they want to try to turn Medicaid into a block grant program, similar to what was done with welfare reform in the 90s,” Rylands says. “However, I suspect many governors from both parties will not like this because it could mean states will pick up more of the tab for Medicaid.”

You could pay less for drugs

Trump proposes legal reforms to protect patients and doctors from unnecessary costs that make insurance more expensive and bring down the “artificially high price of drugs.”

Alongside medical device manufacturers and insurers, the pharmaceutical manufacturing industry is obligated by the Affordable Care Act to pay a yearly fee. It was determined the industry would pay $4 billion in 2017, $4.1 billion in 2018, and $2.8 billion each year after. However, proposed revisions to the Affordable Care Act include repealing the tax.

Some consumer advocacy groups are hopeful that repealing the taxes will reduce drug prices.

“From life-saving cancer drugs to EpiPens, high Rx prices push critical care out of reach for those who need it,” tweeted AARP Advocates, a nonprofit advocacy group for senior citizens.

You could purchase cheaper health insurance across state lines

“Finally, the time has come to give Americans the freedom to purchase health insurance across state lines — creating a truly competitive national marketplace that will bring costs way down and provide far better care,” Trump told Congress.

Under the current law, many states have the choice whether or not to allow insurers to sells plans between states. However, even when allowed, there isn’t much incentive for health care providers to do so.

Difficulty building a network and attracting enough customers to create a large enough risk pool makes this option unappealing to insurers, the Center for Health and Economy reported.

Whether this proposed change will result in a healthy competition in the industry or in a race to the cheapest offer remains to be seen, says Rylands.

“This has the potential to undermine traditional state regulation of insurance … since it would allow insurance companies to sell into a state without having to comply with that state’s particular insurance laws,” Rylands says.

TAGS: ,

Featured, Health, News

Facing a Medical Debt Lawsuit? Take These 10 Steps First

Advertiser Disclosure

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Facing a Medical Debt Lawsuit? Take These 10 Steps First

If you’ve ever been sued by a debt collector or service provider over medical debt, you know how stressful it can be. If you couldn’t afford to pay the original debt, you likely still can’t afford it. And if you want to defend yourself, you’ll have to face the additional time and cost of going to court, too.

You should know that you’re not alone. According to staff attorney Chi Chi Wu of the National Consumer Law Center, when you look at debt collection items on credit reports in America, “half of those items are from medical debt. Not credit cards. Not auto loans. Medical debt.”

You may be tempted to ignore the suit since you know you can’t pay, but Wu advises against inaction.

“Always show up,” she says. “Never ignore a lawsuit. If you ignore it, the debt collector or service provider on the other side automatically wins by default.”

What happens when you show up, though? Here are four steps to take if you’re facing a medical debt lawsuit.

1. Find Out Where the Debt Comes From

You cannot properly address your lawsuit if you don’t understand where the debt comes from. If you look back at your past bills, you should be able to find a date of service and itemized list of services rendered with associated costs.

You may be in debt because you’re uninsured, but even insured patients end up in this boat thanks in part to a rise in high-deductible health plans. Mistakes can happen as well. If a patient visits an in-network hospital, but is unknowingly seen by an out-of-network doctor, they can be charged out-of-network fees. Doctors are independent contractors, so while the hospital may be affiliated with your insurance company, that doesn’t mean your service provider is inherently in-network.

2. Don’t ignore the lawsuit

In most consumer debt cases, consumers don’t have an attorney at all. But hiring an attorney to advise you can be a wise move. It doesn’t have to cost a fortune either, Wu says.

Most lawyers will provide a free consult before taking you on as a client. In this consult, they may be able to help you find your bearings so you can represent yourself.

Wu recommends seeking help from the Legal Services Corporation, a government-supervised nonprofit that provides legal representation at a low cost to low-income households. You can also seek help from nonprofit legal assistance firms in your area.

If you’re uninsured, one way to keep the case from going to court is to contact the doctor or debt collector immediately to negotiate your bill down to Medicaid/Medicare prices — which are often 2-3 times less than that of the gross price you were billed. When a provider refuses to negotiate down to these lower rates, it is called “discriminatory pricing,” and your legal counsel may recommend using it as a defense in court.

3. Prepare for Court

The first thing you must do is prepare an answer to the lawsuit, including any defenses or countersuits that you want to raise. This will involve filing paperwork at the court, mailing paperwork, and showing up on your initial court date. Again, it’s advisable to get a lawyer to help you through this, or at least get a consult. The National Association of Consumer Advocates has a helpful video explainer on preparing to defend a medical debt lawsuit.

It’s important to make this initial court date. It is very unlikely the judge will grant you a continuance that would move the court date further out.

There are some exceptions to this. If you are being sued in a state in which you no longer reside, it’s easier to mount a defense if you can’t appear in court. In fact, appearing in court could work against you, demonstrating to the court that you have no problem traveling to and from court out of state.

If you’ve been served in a state outside of your own, it is very important to get legal representation.

This is because you must answer the suit, but you must also do so in a way that does not imply that you are submitting to that court’s jurisdiction over you. The process is one that is best handled by someone trained in law.

After you answer the suit, the court will set a date for the discovery part of the trial. You will have to file more paperwork with the court before this date so that you are able to present evidence that you are not liable for the debt.

4. Understand Wage Garnishment

If you are found liable for the debt, or you fail to answer the lawsuit and the judge rules against you, the court may issue an order giving the lender or collection agency the ability to garnish your wages. By federal law, they cannot leave you with less than 75% of your income or $217.50 per week — whichever is greater. State law may protect you even further.

Medical debt collectors are able to garnish your wages, but they cannot garnish Social Security benefits, disability insurance payments, unemployment insurance payments, VA benefits, pension distributions, child support payments, or public assistance benefits. If you have any of these forms of income, it’s wise to set up a different bank account where those funds are deposited and keep all garnishable wages in another separate account.

You should do this because a court order can go after your bank account balances, too. While that doesn’t make it legal to take money that came from any of these protected sources, separate bank accounts will make the incidence of errors smaller — saving you headaches and potential victimization.

5. Know Your Rights

When it comes to medical billing and debts, you do have rights as a patient. Make sure you understand them so you can lower or eliminate your bill before or after you’ve been sued.

Were You Served Properly?

Sometimes wages are garnished before the plaintiff is even aware that there’s a lawsuit against them. This happens most commonly when you’re improperly served. Examples of using “improperly served” as a legal defense include papers being only mailed to you and not delivered in person, papers being left at an incorrect residence, or papers being mailed to an old address. Being “improperly served” does not mean that the papers were left with a family member or friend at your residence and they forgot to tell you about it. If that happened, you’re still on the hook.

If you have been improperly served, or if you find out that the court mistakenly started garnishing wages because you have the same name as an actual plaintiff, you should contact a lawyer immediately to figure out what possible recourses there may be for your specific situation.

6. Get Low-Cost or Free Help from Financial Assistance Programs

In 2016, about 58% of community hospitals in the U.S. were not-for-profit, according to the American Hospital Association. This gives them tax-exempt status, but also obligates them to give back to their communities. Under the Affordable Care Act, these hospitals must provide some type of financial assistance program to low-income patients. Even if you aren’t from a low-income household, you should apply, as some hospitals extend their programs far beyond the poverty line. Many hospitals also extend this program to insured patients.

These hospitals have an obligation to let you know about their financial assistance programs within four months of when your bill has been issued.

You have until eight months after the initial bill was issued to apply for financial assistance. You have the right to do this even if the debt has been sold to a third-party collector, and even if that collector is the one suing you in court.

7. Be Aware of Discriminatory Pricing

We’ve already touched on the fact that you can try to negotiate your medical bills down to Medicaid/Medicare prices. If you are being sued in court and are uninsured, discriminatory pricing can serve as a defense. If you qualify for the hospital’s financial assistance program, they legally must reduce your bill to the amount generally billed to insured patients.

8. Look Out for Balance Billing

Balance billing happens when your hospital or medical provider bills you instead of or in addition to Medicaid or Medicare. It’s a forbidden practice, and you are not responsible for any amounts due when this happens.

You may be able to identity balance billing if you receive an “Explanation of Benefits” from your insurer that states the amount they covered and the amount you still owe. If this does not match the bill your medical provider sent you, there is a cause for concern. Additionally, if the bill you receive does not show any payment from your insurance when you are, in fact, on Medicaid or Medicare, it may be a sign that you are a victim of balance billing.

9. Stop Lawsuits Before They Begin

If something about your bill doesn’t look quite right, there are ways to reduce it to its fair amount.

First of all, make sure the hospital didn’t make an error that resulted in a larger bill. One way this could happen is if something they did caused you to have to stay in the hospital an extra night, inflating your costs beyond what they should have been originally.

Another good avenue to pursue is to have your bill examined by a medical bill advocate. They’re familiar with coding and laws that you’re not, making them the perfect people to review your charges. You may find one in your community by asking around, or you can start your search with the National Association of Healthcare Advocacy Consultants.

Debt collectors, hospitals, and other medical providers don’t want to take you to court. It costs them money, and the odds of them actually getting a full payment at that point are very low. They are almost always willing to work with you before issuing a lawsuit. Negotiate. Apply for financial assistance. Set up zero-interest payment plans directly with your health care provider.

Keep the lines of communication open so that no one ends up with the additional costs of litigation.

10. Weigh Bankruptcy

At any point in this process, you can choose to file for bankruptcy. Filing for bankruptcy may alleviate the medical debt. Just be cautious. Bankruptcy is not a decision that should be made lightly, as it will remain on your credit report for up to 10 years and make it difficult to qualify for new credit.

There are two types of bankruptcy: Chapter 7 and Chapter 13. Chapter 7 requires you to sell off all of your assets to settle what you can of your debt obligations. If you don’t have any or many assets, that aspect of it doesn’t matter much. What will matter is that the debt will essentially disappear after you file.

If you file for Chapter 13, you do not have to sell off any assets, but the debt won’t disappear either. Instead, you’ll be put on a 3-5 year payment plan in order to settle.

This may make sense if the court has already issued an order against your wages, but at any other point in your case, it would make more sense to try to set up a payment plan with the medical service provider or debt collection agency directly. Their last resort is wage garnishment. Don’t let it get that far. Know your rights so you can negotiate with them effectively rather than damaging your credit report through Chapter 13 bankruptcy.

TAGS: , ,

Health, How to Complain, Life Events

Here’s Everything You Should Know About Term Life Insurance

Advertiser Disclosure

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Shot of a group of people warming up outdoors

The majority of healthy Americans can use term life insurance policies to get sufficient coverage in place for anywhere from $15 to $100 a month. Most (85%) American consumers believe that most people need life insurance, but just over 60% carry a policy. Even among those who carry a life insurance policy, the amount covered is frequently not enough.

Term life insurance is a low-cost way for individuals with financial dependents to meet those people’s needs even after death. But it can be confusing to understand what it is and what it covers.

When to Consider Life Insurance

Anyone who has a financial dependent should consider buying life insurance if they don’t have the assets available to cover their dependent’s financial needs in the event of their death.

There are five major events that create financial dependence and may justify the purchase of life insurance. These events include:

  1. Taking on unsecured debt with a co-signer
  2. Taking on secured debt with a co-signer
  3. Marriage
  4. Having a child
  5. Moving to a single income

How Much Life Insurance Do I Need?

Term life insurance is the cheapest form of life insurance, but carrying too much life insurance is a waste of money. The exact amount you decide to carry will depend on your risk tolerance and the size of your financial obligations. In this article we offer rules of thumb that can help you calculate the financial loss associated with your death.

Most life insurance companies and brokers also offer life insurance calculators, but these calculators rely on averages. Since each person’s situation is different, it can be valuable to create an estimate on your own.

Unsecured debt with a co-signer

If you’ve taken on unsecured debt (like student loans) with a co-signer and you don’t have sufficient cash or investments to cover the debt, then consider purchasing life insurance in the amount that is co-signed. The beneficiary of this policy should be the person who co-signed the loan with you.

For example, if your parents have taken out $50,000 in loans via a Parent PLUS Loan or private loans, then you should take out a $50,000 policy with your parents as the beneficiaries. In most cases involving unsecured debt with a co-signer, a short term (such as 10-15 years) will be the most cost-effective option for covering this debt.

Secured debt with a co-signer

Secured debts (like a mortgage or a car loan) have some form of capital that could be sold to pay off most or all of the loans, but you still might want to consider taking out life insurance for these types of debts.

While your co-signer can sell the asset, pay off the debt, and become financially whole, that may not be the right choice for your situation (especially if the co-signer is your spouse).

For example, a couple that takes out $200,000 for a 30-year mortgage may decide to each take out a $200,000, 30-year term life insurance policy. This policy will allow either spouse to continue to live in the house in the event of the other’s death.

Marriage

Marriage isn’t a financial transaction, but it brings about financial interdependence. In the event of your death, the last thing you want your spouse to be concerned about is their finances.

Couples without children who both work aren’t financially dependent on each other, but many people would still like to provide their spouse 1-3 years’ worth of income in life insurance to cover time off from work, final expenses, and expenses associated with transitioning houses or apartments.

A couple who each earn $40,000 per year, and who have $20,000 outside of their retirement accounts, can consider purchasing life insurance policies between $20,000-$100,000 in life insurance to provide for the other’s financial needs in the event of their death.

Having a child

Because children are financially dependent on their parents, parents should carry life insurance to cover the costs of raising their children in the event of a parent’s death.

The estimated cost of raising a child from birth to 18 is $245,000, so it is reasonable for each parent to carry a policy of $100,000-$250,000 per child. It is especially important to note that stay-at-home parents should not neglect life insurance since their death may represent a big financial loss to their family (manifested in increased child care costs).

The beneficiary of this life insurance policy should be the person who would care for your child in the event of your death. Sometimes this will be your spouse, but sometimes it will be your child’s other parent, or a trust set up in your child’s name.

If a couple has two children under age 5, and $50,000 in accounts outside of retirement, then each parent should have between $150,000 and $450,000 in life insurance. Parents of older children may choose to take out smaller policies or forego the policy altogether.

Income dependence

If your spouse is dependent upon your income to meet their financial needs, then it is important to purchase enough life insurance to care for their immediate and ongoing financial needs in the event of your death. If you are the exclusive income earner in your house or if you co-own a business with your spouse that requires each of you to play a role that the other cannot play, then your death would yield a tremendous financial loss for several years or more.

In order to estimate the size of policy needed in this situation, there are a few guidelines to consider. According to the well-respected Trinity Study, if you invest 25 times your family’s annual expenditures in a well-diversified portfolio, then your portfolio has a high likelihood of providing for their needs (accounting for inflation) for at least 30 years. A policy worth 25 times your annual income, less the assets you have invested outside of retirement accounts, is the maximum policy size you should consider.

Many people choose to take out even less than this because their spouse will eventually choose to return to work. A second rule of thumb is that the total amount of life insurance for which your spouse is the beneficiary should be worth 10-12 times your annual income. A policy of this size would reasonably provide money to pay for living and education expenses (if your spouse needs to re-train to enter the workforce) for many years without damaging your spouse’s prospects of retirement.

Based on these rules of thumb, if you earn $100,000 and your family’s expenses are $70,000 per year, and your spouse is a stay-at-home parent, then you should have enough life insurance to pay out between $1 million and $1.75 million (remember to subtract the values of any other policies or non-retirement assets above when calculating this amount).

How to Shop for Life Insurance

After deciding on the amount of insurance you need, and the terms you need, you can start shopping for the best policy for you. Although it’s possible to shop around for the best insurance, MagnifyMoney recommends that most people connect with a life insurance broker. For this report, every quote received from a broker was within a few cents of the quote received directly from the insurance company.

If you tell a broker exactly what you want, they can pull up quotes from a dozen or more reputable companies to get you the most cost-effective insurance given your health history. This is especially important if you have some health restrictions.

People with standard health (usually driven by high blood pressure or obesity, or many family health problems) may find some difficulty finding low rates, but brokers can help connect them with the right companies.

People with “substandard health” because of obesity, high blood pressure, or elevated cholesterol, those suffering from current health issues, or people recently in remission from major illnesses will not qualify for term life insurance.

Top Three Life Insurance Brokers

  1. PolicyGenius – PolicyGenius is an online-only broker with an easy-to-use process and helpful policy information. Users give no contact information until they are ready to purchase a policy. PolicyGenius’s system saves data, so users don’t have to re-enter time and again. It is very easy to compare prices and policies before applying.
  2. Quotacy – Quotacy is an online-only life insurance broker with connections to more term life insurance companies than most other life insurance companies. Quotacy offers quick and easy forms to fill out, and they do not require that you give contact information until you are ready to purchase a policy. Unfortunately, they do not fully vet out the policies, so you may need to ask an agent questions before completing a purchase.
  3. AccuQuote – AccuQuote is an online-based brokerage company that specializes in life insurance products. Unlike the online-only brokerage systems, their quotes are completed through a brokerage agent via a phone call. People who prefer some human interaction will find that AccuQuote emphasizes customer service and offers the same price points as online-only competitors.

Top Life Insurance Companies

For those who prefer to shop for life insurance without the aid of a broker, these are the top five companies to consider before purchasing a policy. Each of these companies allow you to begin an application online though you may need to connect with an agent for more details (including a rate quote).

To be a top life insurance issuer, companies had to offer the lowest rates on 30-year term insurance for preferred plus or preferred health levels, and be A+ rated through the Better Business Bureau.

  1. Allianz – Allianz offers the lowest rates for both Preferred and Preferred Plus customers, but they do require you to contact an agent or a broker for a quote.
  2. Thrivent Financial – Thrivent Financial offers the lowest rates for Preferred Plus customers, but they require you to contact an agent before they will confirm your rate.
  3. American National – American National offers among the lowest rates with Preferred and Preferred Plus customers, and they work closely with all major online brokers. You must contact an agent to get a quote directly from them.
  4. Banner Life Insurance (a subsidiary of Legal & General America) – Banner Life Insurance offers an online quote portal and very low rates for Preferred Plus customers. They also seem to be a bit more lenient on the line than other customers for considering Preferred Plus (not considering family history).
  5. Prudential – Prudential offers an online quote portal and the lowest rates for Preferred customers.

What to Expect Next

After you’ve decided to purchase an insurance policy, the policy will need to undergo an underwriting process. This will include a quick medical examination (height, weight, blood pressure, urine sample, and drawing blood) that usually takes place in your home. After that, the insurance companies will need to collect and review your medical records before issuing a policy for you.

Underwriting typically takes 3-8 weeks depending on how complete your medical records are. The company will then issue you a policy, and as long as you continue to pay, your policy will remain in effect (until the expiration of the term). Once your policy is in effect, you can rest easy knowing that your financial dependents will be taken care of in the event of your death.

 

TAGS:

Featured, Health

Health Care Sharing Ministries Surge in Popularity, MagnifyMoney Analysis Shows

Advertiser Disclosure

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

melanie
Melanie and Matthew Moore of Wake Forest, N.C., turned to Samaritan Ministries, one of the largest health care sharing ministries in the U.S. when they needed health coverage.

Correction: An earlier version of this post mischaracterized the way that health care ministries help members pay for medical expenses. They “share” those expenses. They do not “cover” them.

In 2013, Melanie and Matthew Moore were facing a bit of a health care cost crisis. After the birth of their first child, the Wake Forest, N.C., couple decided that it made sense for Melanie, 33, to leave her job and become the primary caregiver at home. Not only did that mean losing an additional income source, but it also meant giving up the family’s affordable health benefits.

The monthly premium for a family plan through Matthew’s employer far exceeded the reach of their newly reduced budget. Melanie began researching health insurance options online, and eventually landed on the home page for Samaritan Ministries. East-Peoria, Ill.-based Samaritan is one of the six major faith-based health care sharing ministries in the U.S.. Members of these ministries pay monthly contributions to a pool of funding that is dispersed among members as they show need.

Samaritan’s plan for Melanie and her son cost just $300 per month — less than half what they would have paid for a family health plan through Matthew’s job. Melanie quickly signed them up. To keep costs as low as possible, they decided Matthew, 31, would continue to receive individual coverage through his employer, which was free.

Even more than the price tag, Melanie says she appreciated the ministry’s faith-based approach to health care. “Health sharing promotes the Biblical ideals of sharing,” she told MagnifyMoney. “It takes a whole different mindset than insurance.”

The Moore family is not alone. As health care expenses have ballooned over the last decade, health care sharing ministries have gained in popularity as a lower cost alternative to traditional insurance. Their numbers still pale in comparison to people who receive insurance through employers or the federal marketplace. But health care sharing ministries have experienced an explosion in interest in recent years.

Membership among the top four health care sharing ministries nearly tripled in just the last two years — from a reported 274,000 members in 2014 to more than 803,000 Americans in 2016, according to a MagnifyMoney analysis of membership rates at the top six ministries. Even the smallest ministry in the bunch, Altrua, saw an eight-fold surge in membership in the last year alone — from 1,000 in early 2016 to 8,000 as of November 2016.

But what exactly are health care sharing ministries, and can they really replace primary health insurance?

At a glance, health care sharing seems like a perfect solution to families facing rising premium costs. However, a deeper look shows that participants take a leap of faith when they eschew traditional insurance protections in favor of health care sharing ministries. MagnifyMoney took a deeper look at how they work.

How Health Care Sharing Ministries Work

Ministry members pay a monthly share to the health care sharing ministry. Monthly share costs can be as low as $21 for an individual, but they can be as much as $780 per month for a family. Share costs vary from ministry to ministry and can also change unexpectedly, much like traditional insurance premiums.

In terms of actual functions, most health care sharing ministries collect monthly shares online, and they disburse funds electronically or through checks. Not all the share money goes directly to helping people in need. Some of the money goes to cover administrative costs, and some money may go into an escrow account. The escrow accounts allow ministry participants to share costs even during periods of high expenses.

Submitting claims

When members incur medical expenses, they submit their bills to the ministry for approval. Approvals are based on the ministry’s published guidelines. Some health care sharing ministries allow medical providers to send bills directly to the ministry. The board then approves or denies sharing. When cost sharing is approved, the member is paid in one of two primary ways: Either the ministry disburses funds to those in need directly, or the ministry directs other members to send their monthly premium payments to the member in need instead.

Health care sharing ministries encourage members to pray for sick members and to send encouraging letters or emails to those in need. Health care sharing ministries specifically publish medical needs to members of the community for the purpose of prayer and encouragement.

“You almost can’t compare sharing to health insurance,” says Dale Bellis, executive director of Liberty HealthShare. “Sharing is about giving not receiving. Your goal is to be available for others in need. Participating is motivated by faith in God and faith in one another.”

The “individual responsibility”

Before sharing a cost, some health care sharing ministries require that members meet an “individual responsibility requirement.” Basically, this is their form of a deductible. The individual responsibility can cost from $35 per incident all the way to $5,000 per incident. For example, Samaritan Ministries requires members to share up to $300 per incident. Medi-Share requires members to pay a non-reimbursable fee of $35 per medical visit or $135 for an emergency room visit (much like a co-pay).

Negotiating bills

One of the benefits of participating in a health care sharing ministry is that many ministries emphasize the importance of negotiating medical expenses. It’s in the ministry’s interest to encourage members to negotiate fees, which leaves all the more money in the pool for everyone else. Some ministries hire third-party firms to negotiate bills, but it’s up to members to take advantage of those services.

Altrua Healthshare directly negotiates on behalf of its members, according toRon Bruno, VP of Business Development.

To incentivize members to negotiate their bills, some ministries offer to waive the member’s individual responsibility portion.

For example, Melanie negotiated a discount at the birth center when she had her second child in 2016. The discount she received more than covered her individual sharing responsibility of $300. That meant 100% of her expenses were shared by Samaritan members.

Who can benefit the most from health care sharing ministries

At their heart, health care sharing ministries are meant to help members who are facing unusually high or unexpected health care costs. To that end, most ministries do not share the kinds of routine preventative care — like annual physicals and immunizations — that private insurers are required to cover. Commonly “shared” expenses among ministry members are things like sudden illness or surgeries, says Michael Gardner, a spokesperson for Medi-Share.

In a way, health care sharing ministries have replaced catastrophic health plans that were phased out under the Affordable Care Act. People who may not require regular doctor’s visits but who want a health plan for emergency health care needs might benefit from a health care sharing ministry.

Finding a doctor

For the most part, ministry members are free to choose primary care doctors of their choice. This is because health care sharing ministries don’t usually share the cost of preventive care. The exception, Altrua HealthShare, has a network of affiliate providers including primary care physicians.

The trouble with choosing “any” doctor is finding a primary care physician who will accept patients who pay in cash. Samaritan Ministries directs their members to use a “cash and direct pay” resource from the Association of American Physicians and Surgeons.

Outside of primary care physicians, each health care sharing ministry allows members to request sharing pre-approval for planned surgeries and other expensive procedures. Most ministries have established processes or arrangements that help their members find the most cost-effective surgeons and specialists in their area.

For example, Liberty HealthShare maintains a list of providers who negotiated bills and accepted payments from Liberty in the recent past. Medi-Share has members search databases for preferred medical providers.

Even with these resources, members are free to find their own doctors, and they will still be eligible for sharing (as long as they follow the standard procedures set forth by the ministry).

When it comes to emergency care, ministry members use the best available option and submit their bills for sharing afterward. The health care sharing ministries will seek to honor requests to share even expensive emergency care (provided the emergency care meets their standards).

Health Care Sharing Ministries vs. Insurance Companies

It’s crucial to understand that health care sharing ministries are not insurance companies. They operate more like nonprofit organizations. And because they are not technically insurance companies, they have no contractual obligation to share certain medical expenses. That means they can mostly write their own rulebook for what they expenses will share and what they won’t.

Each health care sharing ministry has full discretion over which treatments it will share, and ministries will not share expensese for many treatments or conditions that do not align with their religious ideals. For example, many ministries won’t cover treatment for drug or alcohol addictions. Medi-Share, for example, will typically not share expenses for prenatal care for an unmarried woman or health care for children born to unwed mothers. These are costs that traditional insurers would cover without hesitation.

There are also limits to how much health care sharing ministries are willing to share. The majority of ministries have a maximum sharing amount of $125,000-$1 million per incident. In contrast, government-approved health insurance plans do not have annual or lifetime maximums for insurance coverage. That’s not to say that these ministries can’t absorb large costs. Samaritan Ministries participants share $18 million per month in medical costs. Currently, Liberty HealthShare has a sharing capacity of $6 million per month among 30,000 households. Medi-Share and Christian Healthcare Ministries have shared more than $1 billion each.

When Health Care Sharing Ministries Don’t Make Financial Sense

melanie
Melanie Moore, 33, decided to remove her infant daughter from her Samaritan health care ministry plan because the plan did not share her newborn well visit expenses. She continues to use the ministry for her own health benefits.

Because these ministries don’t share expenses for routine health costs, health care sharing ministries make sense for people with low routine health care costs. In general, this includes many healthy people who don’t struggle with chronic conditions.

One surprising group that needs to look out for high routine costs are new parents.

In early 2016, Matthew and Melanie Moore gave birth to their second child. After the birth, the Moores chose to enroll the children on Matthew’s insurance plan instead of keeping them on the Samaritan plan, which wouldn’t share any of their newborn well visit expenses.

Infants visit the doctor 9-10 times in their first 18 months, and they receive dozens of immunizations during that time. For the Moores, the out-of-pocket costs for preventive care would have overwhelmed their budget again.

Faith (Almost Always) Required

Health care sharing ministries have been around since the 1980s, led by Christian Healthcare Ministries. Like Melanie and her family, most health care sharing ministry participants are drawn to the organizations’ emphasis on faith.

The organizations model their sharing plan after resource sharing ideals practiced by the early Christian church nearly 2,000 years ago.

All the health care sharing ministries require that their members affirm some set of beliefs. Most specifically, they require participants to adhere to the Christian faith. Liberty HealthShare is an exception, according to Bellis. “We are unabashedly a Christian organization, but we don’t intrude on the faith choices of participants,” he says.

Bruno, of Altrua Healthshare, explained that members of Altrua adhere to a statement of standards instead of a statement of beliefs. The standards are based on the Bible, but the ministry is non-denominational.

One reason Melanie Moore loves health care sharing ministries is the sense of community and encouragement she receives from other members. She received notes of congratulations and prayers for recovery when she received checks to pay for her child’s delivery. Likewise, she sends notes of encouragement along with her monthly share check.

All the health care sharing ministries encourage participants to pray and give words of encouragement to sick participants. The ministries exist to foster community and to promote sharing. Anyone looking for an impersonal experience will need to look elsewhere.

Each of the ministries is faithful to its heritage. These ministries are faith-centered, and they want to promote religious faith among their members. It is clear that these ministries want members to share more than medical bills. They want to promote a community of care among their members.

Health Care Sharing Ministries in the Obamacare Era

Under the guidelines of the Affordable Care Act, health care sharing ministries would never pass muster. But five of the six large health care sharing ministries were granted exemptions under the ACA — meaning their members will not have to pay tax penalties for not having qualified health coverage.

Please note: Members of Medical Cost Sharing (MCS), another ministry, will not receive qualified exemptions from Affordable Care Act penalties. Their website uses language that may lead you to believe otherwise.

The Bottom Line

Walking the line between faith and finances hasn’t been easy for the Moore family. Melanie is still a member of Samaritan, but the rest of the family is on Matthew’s traditional insurance plan.

Like the Moores, anyone considering a health care sharing ministry should think about their mindset, their faith, and their finances. Don’t join a ministry because of the low monthly costs; the organizations want members who live out the belief statements. Be sure that the rewards of joining a ministry (both financial and otherwise) outweigh the associated risks.

*This post has been updated to reflect the following correction: Due to a reporting error, the name of the ministry used by the Moore family was incorrectly noted. It is Samaritan Ministries, not Medi-Share.

TAGS: , ,

Featured, Health

6 Health Benefits You Should Never Have to Pay For

Advertiser Disclosure

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

child and doctor talking in clinic

Since the passage of the Affordable Care Act, most insurers must now provide preventive benefits without any form of cost sharing. And yet, millions of Americans are still missing out on free (and potentially life-saving) preventative health care services, like flu shots and cancer screenings.

If pocketbook concerns are keeping you from taking care of your health, take a second look. You may find that the preventive services you want are covered without cost to you.

Free benefits — Really?

Of course, it’s misleading to call preventive benefits completely free. You pay for them in the cost of your health insurance premiums. But you may as well use these benefits because, after all, you’re already paying for them. Recent studies show that preventive benefits may save 2 million lives and $4 billion dollars annually.

Furthermore, the ACA doesn’t guarantee free preventative treatments for 100% of insured people. Some insurance plans were given a pass on providing preventative services if they were implemented before March 2010. In 2016, 23% of workers who receive benefits through their employer are enrolled in a grandfathered plan and may not receive full free preventive benefits.

There is also the risk that medical providers may bill patients for services that should be free. Those types of errors are caused when medical billing offices unwittingly bundle covered and uncovered services, when your bill contains an error, or when your insurer errantly denies a claim.

Office visits and preventive services are often billed separately. This means you may receive a legitimate bill even when you thought you were going to receive free care. The only way to avoid this conundrum is to ask for costs in advance. You may also be billed if you use an out-of-network provider.

Below, we cover the preventive benefits you can expect to receive for free, and the times that they may lead to unexpected medical bills.

Benefits for adults

Preventive benefits for all adults fall into six categories. Some benefits are limited to at-risk groups or women only. Before you use a preventive benefit, ask your doctor if you qualify for free screenings. If you don’t, you will have to pay a bill.

Some preventive services will be built into an annual physical, but you can request the services as you need them.

Remember, the preventive service is free, but you may need to pay for ongoing treatment if you uncover a health problem.

Cancer Screenings:

  • Breast cancer screening (mammogram)
  • Cervical cancer screening (pap smear)
  • HPV screening (pap smear)
  • Skin cancer counseling
  • Colorectal screenings (fecal occult blood testing, flexible sigmoidoscopy, colonoscopy)
  • Lung cancer screening (tomography)

Insurers (except grandfathered insurers) cannot impose an extra charge for polyps removed during a colonoscopy. They also cannot charge for medically necessary anesthesia.

Treatment for Chronic Conditions:

  • Screening for the following diseases: abdominal aortic aneurysm, diabetes (blood glucose), hypertension (blood pressure), hepatitis B, hepatitis C, latent TB infection, liquid disorders, osteoporosis
  • Depression screening
  • Low-dose aspirin (adults with cardiovascular or colorectal disease risk factors)

Except obesity management and prescribed aspirin, you must pay for chronic condition treatments through your insurer. This means treating chronic conditions will include cost sharing.

Many chronic condition tests require a blood or urine sample. If your doctor is worried about your health, they may test for multiple uncovered diseases. In that case, you can expect to pay a fee for lab work.

You may also see a charge if a medical biller uses the wrong medical billing codes. If you end up with an unexpected bill, request an itemized bill and an explanation of benefits. You will see on the bill if any you have fees associated with the covered screening. When you see fees for covered screenings, call your doctor to have them adjust the bill. You can also ask your insurer to adjust the claim for you.

Free Health Promotion Treatment

  • Alcohol misuse
  • Obesity screening and management
  • Diet and activity counseling for cardiovascular disease prevention
  • Falls prevention (adults 65+)
  • Tobacco cessation
  • Well-woman visits
  • Intimate partner violence screening and counseling

Initial counseling and tobacco cessation pharmaceuticals are covered at 100%, but your doctor may recommend therapies and counseling not covered by insurance. Be sure to ask if counseling will be billed as a preventive benefit.

Free Immunizations

All immunizations recommend by the Advisory Committee for Immunization Practices (ACIP) must be covered as preventative benefits. This includes over 20 types of immunizations including the annual flu shot.

If you aren’t sure whether an immunization will be covered by your insurance, ask your doctor before you agree to the immunization.

Sexual Health Treatment

  • Screening tests for chlamydia, gonorrhea, syphilis, HIV infection
  • STI counseling
  • HIV counseling
  • Contraceptive services

Insurers must cover the lowest cost version of 18 unique forms of birth control. Treatment for sexually transmitted diseases or infections is not covered as a preventive benefit.

Lab work for sexually transmitted diseases that are not listed will cost extra. Request cost estimates for all tests and screenings even if they are part of your standard wellness visit.

Pregnancy Treatments

  • Anemia, bacteriuria, gestational diabetes, HIV, hepatitis B, syphilis screening
  • Depression screening
  • Folic acid supplements
  • Preeclampsia preventive medicine
  • Tobacco cessation behavioral cessation support
  • Breastfeeding counseling, supplies, and support

Obstetricians commonly ask for tests outside of those listed above. You should expect to pay lab fees for those tests. Most obstetricians can provide clients with a list of routine pregnancy tests and associated costs. In addition to lab fees, you should expect to pay for ultrasounds, labor and delivery fees, and facility fees during your pregnancy and birth experience.

Benefits for Children

Preventive benefits for children are more robust than preventive services for adults. Nearly all procedures provided during scheduled well-child visits will be covered as preventive services. This includes regular checkups, screenings for childhood diseases and disorders, and immunizations.

If your child provides a blood or urine sample you may want to ask about lab fees, but all other services will be free.

Children at risk and sexually active adolescents can receive all the preventive benefits that adults receive in addition to those specific to children.

Regular well-child visits will make it easy for you and your child to take advantage of any preventive benefits available to you.

Final word: Don’t neglect preventive benefits

Preventive coverage can help you catch and cure otherwise deadly diseases. Curing early-stage diseases often costs less than later-stage treatments, and early treatments may save your life. Recent studies show that preventive benefits may save 2 million lives and $4 billion dollars annually.

These services come with no additional cost sharing to you. Take advantage of preventive coverage; you can’t afford to neglect your health.

TAGS:

Health

Guide to Enrolling in an Obamacare Plan on Healthcare.gov

Advertiser Disclosure

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Desperate young couple with many debts reviewing their bills. Financial family problems concept.

Health insurance protects millions of Americans from paying full price for their medical expenses. But buying the right insurance isn’t an easy task for people looking to sign up for an Obamacare plan through the federal health insurance marketplace (Healthcare.gov). This year, the average consumer will have to wade through 30 unique plans from several different insurers to make their choice.

In this guide, we will cover the facts that you need to know when selecting an insurance plan through the federal health care exchange.

What terms should I know before I apply?

Understanding basic health insurance terminology can help you make a more informed decision about your options. These are the common terms you should know.

obamacare 2017

Health care costs

Monthly premiums. The amount you pay each month for your health insurance.

Deductible. The amount you pay for covered health services before your insurer begins to cover part of your costs.

Out-of-pocket maximum/limit. The highest amount you will pay for covered services in a year.

Co-insurance. Your share of the costs of a covered health care service. This is the percentage you must pay out of pocket after you have met your annual deductible. You pay a specific co-insurance amount until you meet your out-of-pocket maximum.

Co-payment. A fixed amount you pay for a covered medical service, typically when you receive the service or prescription.

How these costs work together. Consider a scenario where you purchase an individual insurance policy with a $368 monthly premium, a $2,000 deductible, 20% co-insurance, and a $5,000 out-of-pocket maximum.

You will pay $4,416 in monthly premiums ($368 every month).

If you receive a $20,000 medical bill, you will pay:

  • $2,000 to cover your annual deductible (100% of costs up to $2,000)
  • $3,000 in co-insurance (20% of costs over $2,000 deductible until you hit your out-of-pocket maximum of $5,000)
  • $0 in medical costs after you hit your out-of-pocket maximum (in this case the additional $15,000 is covered by your insurance)

Total annual cost:

$5,000 to cover medical bills + $4,416 in monthly premiums = $9,416

Plan Types

Metal Levels. The health care exchanges — both federal and state-run exchanges — classify health insurance plans into four metal categories. The levels are bronze, silver, gold, and platinum. Metal categories are based on how you and your plan split the costs of your health care.

Bronze. Bronze plans offer the least amount of estimated coverage. Insurers expect to cover 60% of health care costs of the typical population. These plans feature the lowest monthly premiums, the highest deductibles, and high out-of-pocket maximum expenses.

Silver. Silver plans offer moderate estimated coverage. Insurers expect to cover 70% of health care costs, and plan members cover the remaining 30%. If you qualify for cost-reduction subsidies, you must purchase a silver plan to access this extra savings. In 2014, 67% of people who were eligible for a subsidy chose a silver plan.

Gold. Gold plans offer high levels of estimated coverage. Insurers expect to cover 80% of health care costs, while plan members cover the remaining 20%. These plans feature high monthly premiums, but lower deductibles and out-of-pocket maximums.

Platinum. Platinum plans offer the highest level of protection against unexpected medical costs. Insurers expect to cover 90% of medical costs, and plan members cover the remaining 10%. These plans have the highest monthly premiums and the lowest deductibles and out-of-pocket maximums.

EPO: Exclusive Provider Organization. Medical services are only covered if you go to doctors, specialists, or hospitals in the plan’s network (except in an emergency).

PPO: Preferred Provider Organization. You pay less for medical services if you use the providers in your plan’s network. You may use out-of-network doctors, specialists, or hospitals without a referral. However, there is an additional cost.

POS: Point of Service. You pay less for medical services if you use providers in the health plan’s network. You need a referral from your primary care doctor to see a specialist.

HMO: Health Maintenance Organization. These plans focus on integrated care and focus on prevention. Usually coverage is limited to care from doctors who work for or contract with the HMO. Generally, out-of-network care isn’t covered unless there is an emergency.

Provider Network. Most insurance plans have preferred pricing with a group of health care providers with whom they have contracted to provide services to their members.

Cost Savings

PTC: Premium Tax Credit. The federal subsidy for health insurance that helps eligible individuals or families with low or moderate income afford health insurance purchased through a health insurance marketplace.

APTC: Advance Premium Tax Credit. This credit can be taken in advance to offset your monthly premium costs. The subsidy is based on your estimated income and can be taken directly from your insurer when you apply for coverage. You must repay credits if you qualify for a smaller subsidy once taxes have been filed. You can learn more about repayment limitations here.

Cost Reduction Subsidies. If you earn between 100% and 250% of federal poverty line, you may qualify for additional savings. This extra savings reduces your out-of-pocket maximum, and it offers assistance with co-pays and co-insurance.

Individual Mandate (Tax Penalty). If you can afford to purchase health insurance and choose not to, you will be charged an individual shared responsibility payment, in the form of a tax penalty. There are a few qualified exemptions, but if you don’t meet those, you will be fined.

For the 2016 tax year, the individual mandate will be calculated two ways:

  • 2.5% of household income (up to the total annual premium for the national average price of the marketplace’s bronze plan)or
  • $695 per adult and $347.50 per child (up to $2,085)

You are responsible for the greater of the two.

Catastrophic Plans. People under age 30 or with hardship exemptions may purchase catastrophic health insurance plans. These plans offer very high deductibles (over $6,850) and high out-of-pocket maximums. Catastrophic plans may offer savings above the metal grade plans, but you can’t use a premium tax credit to reduce your monthly cost.

Preventative Care. All health insurance plans purchased through the health care exchange cover some preventative care benefits without additional costs to you. These benefits include wellness visits, vaccines, contraception, and more.

Government Health Plans

Medicaid. A joint federal and state program that provides health coverage to low-income households, some pregnant women, some elderly, and people with disabilities. Medicaid provides a broad level of coverage including preventative care, hospital visits, and more. Some states provide additional benefits as well.

Medicaid Expansion. The Affordable Care Act (ACA) gives each state the choice to expand Medicaid coverage to people earning less than 138% of the federal poverty line. The primary goal of the ACA is reducing the number of uninsured people through both Medicaid and the health insurance marketplace. The Kaiser Family Foundation keeps track of expanded Medicaid coverage by state.

CHIP: Children’s Health Insurance Program. This program was designed to provide coverage to uninsured children who are low income, but above the cutoff for Medicaid eligibility. The federal government has established basic guidelines, but eligibility and the scope of care and services are determined at the state level. Your children may qualify for CHIP even if you purchase an insurance policy through the health care exchange. You can learn about CHIP eligibility through the marketplace or by viewing this table at Medicaid.gov.

Who can buy insurance through a health care exchange?

family in debt

Since the introduction of the Affordable Care Act (ACA), most Americans can purchase health insurance through a health care exchange. However, incarcerated people and those living outside the United States cannot purchase insurance through the marketplace.

Most long-term, legal immigrants to the United States may purchase insurance. Healthcare.gov maintains a comprehensive list of qualified immigration statuses for purchasing insurance through the marketplace.

Just because you’re eligible to purchase insurance through the health care exchange doesn’t mean it’s the most cost-effective. That’s why it’s important to weigh all available health insurance options.

Will I qualify for a health care subsidy?

One major factor to consider when weighing the options is your expected subsidy. 85% of people who purchased insurance through a health care exchange qualified for a health insurance subsidy. The subsidy, or premium tax credit, brought average monthly premiums down from $396 to $106.

To qualify for a subsidy, you must meet three standards:

  1. You must not have access to affordable insurance through an employer (including a spouse’s employer).
    1. Affordable insurance for 2017 is defined as individual coverage through an employer that costs less than 9.69% of your household’s income.
    2. You can check that your insurance offers minimum value coverage by having your human resources representative fill out this form.
  2. You must have a household Modified Adjusted Gross Income between 100% and 400% of the federal poverty line.
    1. You can calculate Modified Adjusted Gross Income using this formula:
      Adjusted Gross Income (Form 1040 Line 37) +
      Nontaxable Social Security benefits (Form 1040 Line 20a minus Line 20b) +
      Tax-exempt interest (Form 1040 Line 8b) +
      Foreign earned income and housing expenses for Americans living abroad (Form 2555)
  1. You’re not eligible for coverage through Medicaid, Medicare, the Children’s Health Insurance Program (CHIP), or other types of public assistance. Some states have expanded Medicaid to anyone who earns up to 138% of the federal poverty line.

How can I calculate my subsidy?

The easiest way to calculate the subsidy you will receive is to use a subsidy estimator from Healthcare.gov or the Kaiser Family Foundation. Both calculators estimate your subsidy based on the information you provide. They also help you understand what factors affect your subsidy estimations.

Your income, household size, and the cost of premiums in your state factor into your subsidy. Premium tax credits can help reduce the amount that you will spend on monthly premiums to a set percentage of your income. This subsidy can bring the marketplace’s silver plan into the affordable range set by the Affordable Care Act.

The price of your silver plan determines the subsidy you receive, but you can use this same subsidy for other plans as well. For example, if you purchase a gold plan, you will spend no more than 9.56% of your income on premiums.

Below you can see the maximum amount you will spend on insurance premiums based on your income.

For an Individual

% of Poverty Line (2016) Income (Based on 2016 Federal Poverty Line) Max Silver Premiums as a Percent of Income Max Monthly Silver Plan Premium Cost after Subsidies Special Notes
100%-138% Lower 48 States:
$11,880-$16,394
Alaska:
$14,840-$20,479
Hawaii:
$13,670-$18,865
2.03%-3.35% Lower 48 States:
$20.08-$45.77
Alaska:
$25.10-$57.17
Hawaii:
$23.13-$52.66
Check if you qualify for expanded Medicaid.
139%-250% Lower 48 States:
$16,513-$29,700
Alaska:
$20,627-$37,100
Hawaii:
$19,001-$34,175
3.41%-8.18% Lower 48 States:
$46.93-$202.45
Alaska:
$58.62-$252.90
Hawaii:
$54-$232.96
You may qualify for cost-reduction subsidies if you purchase a silver plan.
251%-400% Lower 48 States:
$29,819-$47,520
Alaska:
$37,248-$59,360
Hawaii:
$34,312-$54,680
8.21%-9.66% Lower 48 States:
$204.01-$382.54
Alaska:
$254.84-$477.85
Hawaii:
$234.75-$440.17
If you earn more than 400% of the poverty line, you will not qualify for subsidies.

For a Family of Four

% of Poverty Line (2016) Income (Based on 2016 Federal Poverty Line) Max Silver Plan Premiums as a Percent of Income Max Monthly Silver Plan Premium Cost after Subsidies Special Notes
100%-138% Lower 48 States:
$24,300-$33,534
Alaska:
$30,380-$41,924
Hawaii:
$27,950-$38,571
2.03%-3.35% Lower 48 States:
$41.11-$93.62
Alaska:
$51.39-$117.04
Hawaii:
$47.28-$107.68
Children will qualify for CHIP. Check if you qualify for expanded Medicaid.
139%-200% Lower 48 States:
$33,777-$48,600
Alaska:
$42,228-$60,760
Hawaii:
$38,851-$55,900
3.41%-6.41% Lower 48 States:
$95.98-$259.61
Alaska:
$120-$324.56
Hawaii:
$110.40-$298.60
Children in 46 states will qualify for CHIP. You may qualify for extra savings if you purchase a silver plan.
201%-250% Lower 48 States:
$48,843-$60,750
Alaska:
$61,063-$75,950
Hawaii:
$56,180-$69,875
6.45%-8.18% Lower 48 States:
$262.53-$414.11
Alaska:
$328.22-$517.73
Hawaii:
$301.96-$476.31
In some states, children will qualify for CHIP. You may qualify for extra savings if you purchase a silver plan.
251%-400% Lower 48 States:
$60,993-$97,200
Alaska:
$77,383-$121,520
Hawaii:
$70,155-$111,800
8.21%-9.66% Lower 48 States:
$417.29-$782.46
Alaska:
$529.43-$978.24
Hawaii:
$479.97-$899.99
In a limited number of states, children qualify for CHIP up to 375% of the poverty line. If you earn more than 400% of the poverty line, you will not qualify for subsidies.

What circumstances might affect my eligibility for a subsidy?

newborn-baby-wide

Your subsidy can change if your circumstances change. It’s important to plan ahead if any of these special circumstances apply to you.

Families with kids. In most states, if you earn less than 200% of the poverty line, your kids will qualify for the Children’s Health Insurance Policy (CHIP). If your children qualify for CHIP, you cannot purchase subsidized insurance for them, but your individual coverage may still be subsidized.

Families where one spouse has work coverage. Some employers only offer health insurance to their employees. Spouses and children cannot get coverage through work. In that case, you can purchase insurance with a subsidy through the marketplace exchange.

Families with expensive employer coverage. If you can purchase family coverage through your or your spouse’s employer, then you will not qualify for subsidies. The tax code states that if an employee can gain individual coverage for himself or herself for less than 9.69% of total household income, then the insurance is considered affordable. Coverage for the family isn’t factored into the affordability calculation.

The so-called “family glitch” traps 2-4 million people and requires them to pay high prices for premiums. If you are caught in this situation, your children may qualify for CHIP. However, uncovered spouses and children must purchase insurance or pay the individual mandate penalty.

Minnesota Senator Al Franken has proposed a Family Coverage Act that may rectify the tax code, but it has not been passed.

Getting married in 2017. If you’re getting married in 2017, your subsidy depends on your combined income. In the months preceding your marriage, your income is one-half of your and your spouse’s combined income. Once you get married, your subsidy is based on your joint income and your qualifying family.

You need to report a marriage to be eligible for a special enrollment period on Healthcare.gov or your state’s insurance exchange.

Getting divorced in 2017. If you get divorced or legally separated in 2017, you must sign up for a new health insurance plan after you separate. Your subsidy will be based on your income and household size at the end of the year. However, you will need to count subsidies received during your marriage differently than subsidies received when you’re legally separated.

For the months you are married, each spouse divides advanced subsidies received to each new household. If spouses cannot agree on a percentage, the default is 50%. If the plan only covered one taxpayer and his or her dependents, then the advanced tax credits apply 100% to that spouse.

Divorce reduces your income, but it also reduces your household size. These factors change your estimated subsidy in opposite directions. Your subsidy changes will depend on the magnitude of each change.

Reporting a divorce makes you eligible for a special enrollment period. When you enroll in a new plan, the exchange website will help you estimate your new subsidy for the remainder of the year.

Giving birth or adopting a child. You have 60 days from the birth or adoption of your child to enroll them in a health care plan. If you miss this window, your child will not have health coverage, and you will pay a penalty. However, if you enroll your child in a timely manner, you can expect your subsidy to increase.

Report the birth or adoption of a child to be eligible for a special enrollment period on Healthcare.gov or your state’s insurance exchange.

Turning 26. If you’re on your parents’ insurance, generally you can stay until you have turned 26, but you should check your plan to be sure. You will have a 60-day special enrollment period to get your own plan from the health care exchange when you turn 26.

You may also be eligible for a special enrollment period from an employer-sponsored health plan. If you fail to have health insurance for more than three months, you will pay a penalty.

Losing employer coverage. If you lose employer-based health coverage, you can either enroll in COBRA or purchase a plan through the health care exchange. Once you enroll in COBRA, you become ineligible to purchase subsidized coverage through the exchange.

You need to report job status changes to be eligible for a special enrollment period on Healthcare.gov or your state’s insurance exchange.

Changes in income. Premium tax credits are based on your annual income. If you increase your income, you will be expected to pay back some or all of the advanced premium you received. If you earn more than 401% of the federal poverty line, all premiums need to be repaid. If you earn less than 400% of the federal poverty line, you may have to pay back $2,500 of advanced premiums per family or $1,250 for individuals.

You need to report income changes to avoid under- or overpaying your premiums throughout the year.

Moving. Most insurance plans that you purchase through the marketplace are state and county specific. If you move, you need to report the move through the insurance exchange.

Moving may affect your subsidy (if you move to or from Alaska or Hawaii), but it does affect the plans available to you.

How do I apply for insurance?

Applying for insurance takes 30-60 minutes if you have all the necessary information ahead of time. This is what you should gather before you apply:

  • Names, birthdates, and Social Security numbers for all members of the household
  • Document numbers for anyone with legal immigration status
  • Information about employer-sponsored health plans
  • Tax return from previous year (to help predict income)
  • Student loan documents
  • Alimony documents
  • Retirement plan documents
  • Health Savings Account documents

The website interface for the federal exchange is simple, but answering the questions may be confusing. It’s important to fill out the application as accurately as possible so you can enroll in the best health insurance plan for you.

We’ve done our best to clarify the confusing portions in our step-by-step process below.

A note on state-run health care exchanges

Each state has the right to choose whether to run their own health care exchange, or to use Healthcare.gov, the federally run exchange. Seventeen states run their own health insurance exchanges.

The state-run exchanges perform the same functions as the federally run exchange. They allow you to estimate your tax credit and to purchase insurance. As a consumer, you must provide the same information to your state as you would on the federal exchange.

While the online user experience will vary when states adopt their own online marketplace, the Affordable Care Act is a federal law and a federal program. This means that the requirements and benefits do not change from state to state even if the exchange platform changes. If you have trouble navigating either the state or federally run health care exchange, you can get free help from knowledgeable experts.

Family and Household Info

Start the application by filling out contact information and basic information about members of your household. Even if a member of your family will not need coverage, include them in your application.

picture1

The website will help you determine if a member of your household has insurance options outside of the health care exchange. It will also help you determine if a person is a dependent. For the purpose of the health care exchange, your family includes all the people included on your income tax filing.

picture2

You need to know Social Security numbers, birthdates, immigration status, disability status, and whether each household member can purchase health insurance through an employer plan.

Income and Deductions

Next, you’ll estimate your income for the upcoming year. Include all the following forms of income:

  • Jobs
  • Self-employment income (net)
  • Social Security benefits
  • Unemployment income
  • Retirement income
  • Pensions
  • Capital gains
  • Investment income
  • Rental/royalty income
  • Farming and fishing income
  • Alimony received

picture3

Afterward, you’ll enter deductions. The application calls out student loan interest and alimony paid, but you should estimate all “above the line deductions” that should be included. These include:

  • Retirement plan contributions: 401(k), 403(b), 457, TSP, SEP-IRA, simple IRA, traditional IRA
  • Contributions to a Health Savings Account
  • Self-employed health insurance premiums
  • Tuition and fees paid
  • Educator expenses (up to $250 per teacher)
  • Half self-employment tax
  • Moving expenses
  • Early withdrawal penalties from a 1099-INT

Do not double-count income or deductions since you’ll fill out these forms for each person. If you make a mistake, you can edit it when you review your household summary.

Additional Information

Finally, you’ll fill out a few other miscellaneous details that will allow the application to confirm that you are eligible for subsidies or marketplace insurance.

picture5

It’s especially important that you have accurate information about job-related coverage for you and your family. This information will determine your eligibility for subsidies and other government programs.

Completing Enrollment

After you complete the application, you can review and submit it. At this point, the system will suggest which members of your household should complete CHIP or Medicaid applications. The remaining family members can enroll in a health insurance plan.

picture6

How do I decide what plan type is best for me?

Before you choose a plan, you’ll decide whether to receive advanced or deferred subsidies. Most people with predictable income and household size should take most or all of the subsidy upfront. However, if you expect to undergo a major life change (such as an increase in income, a marriage, or a divorce), consider taking less of your subsidy in advance.

picture7

Then you can look for a plan. For people shopping for 2017 coverage, the average number of plans available is 30. Rather than comparing every plan, we recommend creating criteria around the following variables:

  1. Monthly cost. Consider how the monthly premium will affect your budget. This does not mean you should choose the plan with the lowest premiums, but you should consider the price. People without chronic conditions who have adequate emergency savings may consider opting for low monthly premiums.
  1. Deductible and co-insurance. Do you have the emergency fund or income you need to cover a small medical emergency? A broken arm, stitches, or an unexpected infection can lead to hundreds of dollars in medical costs. If you have a high-deductible plan, you’ll need to cover these costs without help from the insurance company. If possible, choose a plan with a deductible that you could comfortably cover out of your savings or income.
  1. Maximum yearly cost. Add the annual cost of your premiums plus your out-of-pocket maximum to determine your maximum yearly cost. In a worst-case scenario, this is the amount you will pay out of pocket. People with chronic conditions that require heavy out-of-pocket fees should try to limit their maximum yearly cost. A plan with a higher maximum yearly cost may represent a higher risk.
  1. Services and amenities. All insurance plans from the marketplace cover the same essential health benefits, but some plans will offer unique services such as medical management programs, vision, or dental coverage. High-deductible health plans allow you to contribute to a tax-advantaged Health Savings Account.
  1. Network of providers. It’s important to be sure that your preferred medical providers contract with the plan you choose. Not every doctor is “in network” with every insurance plan. You can check each plan’s provider directory before you choose the plan.

picture8

Once you determine your criteria, look for plans that fit your needs and ignore the rest.

Using the exchange website, you can filter and sort plans based on these factors. Most people need to balance cost and coverage to find a plan that works for them.

Where do I get help for free?

Due to the complex nature of the marketplace exchange, the exchange provides marketplace navigators. Marketplace navigators are professionals who provide free, unbiased help to consumers who want help filling out eligibility forms and choosing plans. You can find local marketplace navigators through the health care exchange website. Most of the time you can find someone who speaks your language to meet you in person.

Outside of the exchange, nonprofit organizations are working to help people gain coverage by teaching them about their insurance options. Enroll America offers free expert assistance to anyone who makes an appointment with in-person application assistance. You can use the connector below to make an appointment with one of their experts.

Insurance brokers can offer another form of help. Brokers aim to make it easier for consumers to apply for and compare insurance plans. Insurance brokers have relationships with some or all of the insurance companies on the marketplace. Using a broker will not increase the price you pay for a plan, and it will not affect your subsidies. However, online brokers may not have 100% accuracy regarding a plan’s details. It’s important to visit a plan’s website before you enroll in a plan.

If you want to work with a broker, consider some of these top online brokers. PolicyGenius compares all the plans that meet criteria that you establish, and they serve up the top two plans that meet those criteria. HealthInsurance.com makes applications quick and easy, and the site specializes in special enrollment help.

What happens if I don’t apply for insurance?

In most cases, you must enroll in health insurance or you’ll have to pay a penalty.

The penalty for 2017 hasn’t yet been released, but the 2016 penalty was calculated as the greater of 2.5% of your income (up to the national average cost of a bronze plan) or $695 per adult and $347.50 per child (up to $2,085). This steep penalty means that most people will be better off purchasing some health insurance.

However, under certain circumstances you can avoid buying insurance and dodge paying the penalty. These are a few of the most common exemptions:

 

  • Member of a qualifying health care cost-sharing ministry (501(c)(3) whose members share a common set of ethical or religious beliefs and have shared medical expenses in accordance with those beliefs continuously since at least December 31, 1999.
  • Low income, no filing requirement: If you do not earn enough income to file taxes, then you are automatically exempt from paying a noncoverage penalty.
  • Coverage is unaffordable. For 2017, if you cannot obtain individual employer coverage or a bronze plan for less than 9.69% of your income (after applicable subsidies), you may opt out of coverage.
  • Joint individual coverage is unaffordable. For 2017, if you and your spouse combined cannot obtain individual employer coverage or a bronze plan for less than 9.69% of your income (after applicable subsidies), you may opt out of coverage.
  • Short coverage gap (you went without insurance for less than three months).
  • Lived abroad for at least 330 days.
  • General hardships such as homelessness, eviction, foreclosure, unpaid medical bills, domestic violence, and more (exemption must be granted through a marketplace exemption).
  • Unable to obtain Medicaid because your state didn’t expand Medicaid (exemption must be granted through the marketplace).
  • Received AmeriCorps coverage (exemption must be granted through the marketplace).
  • Members of qualified religious sects who do not obtain government benefits (exemption must be granted through the marketplace).

Although you will not pay a penalty, you may still want to seek out catastrophe insurance or some other insurance to help you deal with high potential health costs.

What happens if my plan was canceled?

Recently, some insurers dropped their insurance plans from the health care exchange. As a consumer, you cannot assume that the plan you chose in the past will be around next year. Unlike previous years, you will not qualify for an exemption if your plan dropped in 2017. This means that you may need to purchase new insurance or pay a penalty.

Even if your plan remains in place, important variables like the deductible, the premiums, or the coverage may have changed.

Whether you’re shopping for a new plan, or reviewing an old plan, take these steps before open enrollment ends.

  • Update your personal information on your application. Your income, household size, where you live, and more will affect plan and subsidy eligibility. It’s important to keep your application up to date. The plan that fit you last year may no longer be appropriate, but you won’t know unless you keep the information current.
  • Review your plan before you re-enroll. You should receive a notification in the mail if your plan has been changed or canceled. Take the time to understand if the changes affect you.
  • Compare plans that fit your needs. Consider enlisting free help from a health care navigator, a nonprofit, or a broker to help you decide.
  • Choose the plan that best fits your needs and your budget.

Work to make the most informed decision possible

Choosing a health plan seems like a daunting task, but you can get all the help and information you need to make an informed decision. Your health and your pocketbook matter, and we want to help you protect both.

TAGS:

Featured, Health

Here’s How Much More Your Obamacare Plan Will Cost in 2017

Advertiser Disclosure

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

obamacare Affordable Care Act paper family

As widely expected, millions of Americans who rely on Obamacare for health insurance will face higher premium costs going into 2017. Premiums will rise 25% on average, according to a new report released by the U.S. Dept. of Health and Human Services (HHS). That’s one of the largest year over year spikes premiums have seen since the marketplace opened in 2013.

A 27-year-old woman who paid $242 for a benchmark silver plan in 2016 will now face a premium of $302 before tax credits. The silver lining here is those three words: before tax credits. Roughly 85% of Obamacare customers currently qualify for tax credits that can offset the cost of their premiums. The average subsidy in 2016 was $290/month. Tax credits can help offset rising premium costs, but they depend largely on household size and income. Beginning in November, consumers can calculate their tax credit for 2017 here.

How much premiums will rise depends largely on the state where consumers are shopping. In states where major insurers have exited the federal marketplace, premiums will see much higher gains. Further contributing to rising premiums, insurers are now raising prices in order to recoup losses they’ve incurred since entering the Marketplace in 2013. For example, BlueCross BlueShield reversed its decision to exit the marketplace in parts of Arizona in September. But as a condition of its decision to stay in the marketplace, the company said it would raise premiums by more than 50%. The company will have very little competition this year. Arizona lost a total of six major insurers this year, bringing the total number of insurers offering plans on the marketplace from eight to only two.

Arizona customers will feel those price hikes now. A 27-year-old in Arizona will pay a whopping 116% more for a benchmark silver plan in 2017, according to HHS.

Minnesota consumers relying on Blue Cross Blue Shield for coverage were also unlucky this year. Citing losses of $500 million over its three year run on the state’s exchange, BCBS decided in June to pull all but one plan from Minnesota’s state-run healthcare marketplace, leaving more than 100,000 Minnesotans without plans. The benchmark silver plan will rise an average of 59% for a 27-year-old in Minnesota going into 2017.

The silver lining

The government report focused largely on positive news for Obamacare consumers going into 2017.

Three-quarters of Marketplace customers in states using the federal health care exchange (Healthcare.gov) will be able to find plans with a monthly premium under $100 after factoring in tax credits. On average, these consumers will have 30 different insurance plans to choose from.

But the number of individual insurers offering plans in states has decreased in many states. Pennsylvania and Ohio each lost five insurers. Arizona lost six, the largest loss of any state. In several states, including Alaska, Arkansas, Wyoming, and South Carolina, only one major insurer offers plans on the marketplace. When there are fewer insurers operating in a given state, there is less competition and, as a result, potentially higher rates for consumers.

The Bottom Line:

This all means one thing for Obamacare consumers facing open enrollment Nov. 1: It is more important than ever to shop around and compare plans. If customers don’t shop around, they will simply be re-enrolled in their 2016 coverage. And if their 2016 plan is no longer available, the marketplace will stick them in a similar plan that could cost much more.

“In 2017, more than 7 in 10 (76 percent) current Marketplace enrollees can find a lower premium plan in the same level by returning to the Marketplace to shop for coverage rather than re-enrolling in their current plan,” according to the report.

MagnifyMoney has several tips for people who found out that their Obamacare plan has been dropped.

The open enrollment period of marketplace health plans is a crucial time to save and select the right coverage for your family’s needs. Open enrollment for Obamacare consumers begins November 1 and ends January 31. You can shop for plans in advance right now by visiting Healthcare.gov or your state insurance marketplace.

Source: HHS
Source: HHS

TAGS: