If you’re buying your own health insurance, here’s what you need to know.
- Buying your own health insurance for the first time can be overwhelming.
- It is important to consider various aspects of a given plan choice before making a decision.
- Consider the different plan levels, consider getting an HSA-compatible plan, and be sure to review out-of-network coverage information.
This month, many salaried workers are in the process of choosing health insurance coverage for 2023 through their employers. But what if you don’t qualify for health insurance through work?
Maybe you’ve become self-employed recently, which means you don’t have access to company benefits. Or maybe you’re retired but not yet eligible for Medicare.
Being without health insurance can be a very dangerous thing. If you don’t have health insurance, you may need to dip into your savings to cover things like unexpected hospital bills. So it’s important to put a cover on. And thanks to the Affordable Care Act, you can buy health insurance through the federal marketplace at HealthCare.gov from November 1st through January 15th.
If this is your first time buying your own health insurance, the process can seem quite overwhelming. Here are some tips for narrowing down your choices.
1. Know your plan levels
Marketplace health insurance plans are classified into different categories or tiers. The highest level is Platinum, which means you’ll typically be looking at more comprehensive coverage and lower out-of-pocket costs for things like co-pays and deductibles. But you’ll also be looking at higher premium costs overall. If you don’t want to commit to a Platinum plan, you can go down one level to Gold, two levels to Silver, and three levels to Bronze.
2. Consider an HSA compatible plan
Health insurance plans that come with a higher deductible may be compatible with a health savings account (HSA). And these plans are definitely worth checking out.
HSAs allow you to contribute pre-tax dollars for health care spending purposes. They’re super flexible because they don’t expire, so you can take withdrawals at any time and invest funds you don’t need to spend right away. HSA withdrawals are also tax-free when used for qualified health care expenses — things like copays and deductibles.
Health plans with an individual deductible of $1,500 or more or a family deductible of $3,000 or more are eligible for HSAs in 2023, provided their maximum limits do not exceed $7,500 for individuals or $15,000 for families. When you look at your plan choices, you’ll usually be able to see right away whether or not a plan qualifies for an HSA.
Of course, you may not like the idea of a higher health insurance deductible. But generally, the higher your deductible, the lower your premiums, so what you pay in one way, you’ll save in another. And remember, an HSA can reduce your tax burden, so you should factor those savings into your decision, too.
3. Review your out-of-network coverage choices
It’s not always possible to find a doctor or specialist you like in your health insurance plan’s network. That’s why it’s important to see what costs you can expect if you’re forced to go off-grid. You’ll typically be on the hook for higher co-pays, and some health insurance plans won’t offer any coverage if you see an out-of-network provider.
Buying health insurance is an important thing. Follow these tips to make the right decision – and make sure you have the coverage you need.
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