For self-employed workers and other consumers who don’t get health insurance through an employer, your chance to shop for 2016 coverage starts Nov. 1, when Obamacare’s third open enrollment period begins. Premiums appear to be increasing modestly this year, although there are huge regional variations (see chart below). To pick the best plan for your circumstances, weigh three key questions.
Can you get a subsidy?
A family of four with an annual income of $97,000 or less (or an individual making up to $47,080) may qualify for a tax credit to lower the insurance cost. But not everyone takes the credit. More than 9 million people were eligible for tax credits but missed out this year, the Kaiser Family Foundation says. To take advantage of the tax credits, you must buy an exchange (or “marketplace”) plan.
Know that varying incomes can make calculations trickier. “It’s possible to start out the year qualifying for a subsidy and then—if you end up making more money than you thought you would—lose your subsidy eligibility” during the year, says Cynthia Cox, associate director at Kaiser Family Foundation. One way to manage uncertainty: If you think your income will rise, don’t take the full subsidy you’re offered when you enroll. (You can always claim it later, at tax time.)
Should you skip the exchange?
If you don’t expect a subsidy, you have more options off the exchange. Online broker eHealth, for example, sold 1,900 plans in 2015 that were not on any government-run exchange. Those plans are likely to include more doctors: Overall, plans sold on Healthcare.gov this year included 34% fewer doctors and hospitals, according to an analysis by consulting firm Avalere. If you have doctors you like, make sure they’ll be in network.
Note that you may pay more for the privilege. Premiums for silver-level plans sold outside the exchange for 2015 were nearly 13% higher on average than those sold through Healthcare.gov, according to an analysis by HealthPocket, which compares health plans.
Can you get a better deal?
If you do stick with an exchange plan, be sure to review your options even if you like your current policy. Benefits and prices change each year—as do provider networks, covered medications, and other details that affect your wallet. Among silver plans, for example, Kaiser Family Foundation found many of 2015’s lowest-cost plans were no longer among the cheapest for 2016.
If you see the doctor frequently or take a lot of medications, you may save in the long run by buying a plan with higher premiums that covers more out-of-pocket costs.
To find the best deal, compare monthly premiums, deductibles, co-pays, and co-insurance with your 2015 medical expenses to get a sense of how much you’re likely to spend in 2016. You can check out-of-pocket costs by plan type using the online cost calculator at Healthcare.gov.