It’s November 2, and that means two things: You’re going to start hearing Christmas music and you have a chance to enroll on the healthcare marketplace. November 1 brought upon both of these, and if you’re looking to understand your insurance options, we can help.
Background: Open Enrollment is Here—But Are Marketplaces Your Only Option?
In simplest terms, Open Enrollment is the timeframe in which those who need health coverage can enroll. Under the 2010 Affordable Care Act, those looking to enroll for health coverage on the insurance marketplaces must do so during Open Enrollment. Initially spanning two months, Open Enrollment was cut to 45 days in 2017 in order to reduce costs to the taxpayer.
We discussed some of the choices you’ll have to make here, but one of the big questions to ask is whether you need marketplace coverage.
It Pays to Shop Around: Pros and Cons of Going Off-Marketplace
No matter what you’re buying—choice is never a bad thing. Having 23 different options for deodorant is better than having one federally mandated one, and the same goes for your health insurance coverage. With the elimination of the individual mandate, healthcare shoppers were given more access to plans that more closely align their needs, able to choose a plan that matches cost, coverage, and access.
Consumers needed to do their due diligence when shopping for plans considered noncompliant under the ACA. Here are just some pros and cons of going off marketplace when shopping for insurance. Just as you wouldn’t go shopping for a new car without taking a test drive, you shouldn’t jump into an insurance plan uninformed.
Pro: More Flexibility
The main benefit of an off-market plan is the flexibility. By going off marketplace, you open yourself up to an expanded pool of plans from an expanded group of insurers who may have found that they were losing money from marketplace plans. Add to this the options including healthcare sharing services, fixed benefit plans, and more, and the choices are there.
Con: You May Not Be Able to Find All the Information You Need
If you even typed the word healthcare into your search bar, you’ve likely been inundated by ads for coverage. Often, it’s hard enough to navigate the alchemy of marketplace plans—now throw in the nuances that exist when you’re applying for coverage elsewhere.
The amazing flexibility and freedom you have is also an inherent flaw—unless you understand the carriers and the processes to enroll. Luckily, with the help of a broker, it’s easier to understand the options you may not have known about, based on your specific needs.
Pro: Better Access to Hospital Networks and Doctors
“If you like your doctor, you can keep your doctor” was once a big ACA promise. If you’ve been laid off or are currently unemployed, you may be seeking out marketplace coverage for the first time this year—only to realize that the plans in your price range aren’t going to give you access to the care you want.
Networks are a big deal, and going out of network can cost you a lot of money. However, the decision to go off marketplace means that you may be able to find a plan that includes your doctor.
Con: Not Eligible for Assistance
Part of the term Affordable Care Act was the word “Affordable.” Though many individuals saw reduced coverage and higher costs, another core provision of the ACA were the cost reduction programs—expanded Medicaid, Cost Sharing Subsidies, and Premium Tax Credits.
Designed to help reduce costs for those making less than 250% and 400% of the poverty line, cost sharing and tax credits helped reduce the burden on insurance applicants. Naturally, by going off marketplace, these plans are not available.
Pro: Short-Term Coverage Could Hold You Over
For those of you who are between jobs as a result of the lockdowns or simply waiting for retirement, you may not want a full year of coverage. Short term health insurance is a type of health plan that can provide you with temporary medical coverage when you are between health plans, outside enrollment periods, and need coverage. These plans exist to bridge the gap between loss of insurance and the start date of new insurance.
Con: You May Be Responsible for a State Individual Mandate
States have their own freedom to implement mandates, and although there is no longer a federal penalty for not having insurance, some states are implementing their own version of the individual mandate. Massachusetts reinstated its individual mandate in 2019, New Jersey and DC enacted new legislation to add their own mandates in the same year. California and Rhode Island passed their own version of the individual mandate in 2020, and Vermont has put a mandate in place, though is yet to set dollar values.
Pro: Lower Premiums
Depending on how you secure coverage, you may be able to save a bit of money each month. Short-term plans are built to be low-risk and low premium, off-marketplace plans may be a bit more flexible, and however you approach a decision, you may be able to save money.
Note: You may want to look at Gap coverage in the event you do go off-marketplace. These plans help you cover the costs that lead up to your deductible.
Con: Maximum Payouts and Preexisting Conditions
The main reason the premiums are lower is because the risk pool is generally healthier. How do they do this? Denying those with pre-existing conditions and setting limitations on payouts.
One thing a potential buyer should know is that with an off-market health insurance plan, you may be required to fill out a medical questionnaire when applying. As these plans aren’t subject to the stipulations set forth by the Affordable Care Act, applicants with pre-existing conditions may be turned away.
Pro: Don’t Pay for Things You Don’t Need
Some plans do not cover services included in traditional health plans. For example, coverage required under a traditional plan (e.g. maternity, substance abuse, mental health) may not be covered off-market. As these plans aren’t beholden to federally-required or state-based essential health benefits, you often see plans better tailored to your needs.
For example, a person aged 50-64 probably doesn’t need maternity coverage, and a straight-laced teetotaler doesn’t need substance abuse coverage—both considered essential at the Federal level.
Con: It May Not Cover What You Need
One caveat, however, is that with freedom comes responsibility. For example, these plans could deny coverage for preexisting conditions, offer coverage that does not deliver the ten ‘essential health benefits’, and contain deductibles that exceed maximums under the ACA. Make sure to read the “exclusions and limitations” information before buying any plan. This will tell you what’s covered and not covered by a certain plan.
An Easier Way to Navigate: Free Service Matches Price and Needs
For those seeking health insurance, this decision impacts the way you would normally search for insurance, either going to the federal marketplace, their respective state marketplaces, or secure insurance with the help of a broker.
Though both federal and state marketplaces have made it easier to find options, if you want to go beyond these, you may want someone to help guide you through the process.
That’s where we come in. Our free service gives you access to an independent network of national brokers who have the experience and expertise to design a plan around your needs and budget. Our network of brokers will tailor a complete solution for your health coverage needs.
Ready to get started? Simply request a no obligation health insurance quote here.