Health insurance premiums are expensive, often totaling hundreds of dollars every month as a safety net for your health and your medical expenses. And when you’re handing over a huge chunk of your income every month, you might wonder if health insurance is really worth its cost.
But if you don’t secure health insurance before open enrollment ends on December 15, you could wind up paying far more in penalty fees. Here’s why you need to get an affordable plan in place during open enrollment – and how you can find the most budget-friendly option possible.
Going Without Insurance Will Cost You
Since the Affordable Care Act went into effect, Americans who’ve opted to go without health insurance have had to pay an annual penalty. And if you’ve been paying thousands of dollars a year for insurance, the penalty looks like a far better financial choice than insurance.
The annual penalty for 2018 was $695 plus inflation, meaning individual adults who didn’t carry health insurance during 2018 will have to pay more than $700 in fees when filing their taxes in 2019, Healthcare.gov reports. And if you don’t visit the doctor often, this sure seems like a smart way to save money year after year.
However, if you think paying a monthly premium for a health insurance plan is expensive, consider how much it’ll cost you if you fall ill or are injured without insurance as a safety net. You could rack up tens of thousands of dollars in medical bills if you have to pay your expenses out of pocket.
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The Affordable Care Act sets a limit, or a maximum, for what you have to pay out of pocket if you carry insurance. As long as you have a health insurance plan, you’ll never pay more than $7,350 for your medical expenses, ObamaCareFacts.com writes.
However, if you don’t have insurance, there’s no limit at all. If you become seriously ill, develop a chronic medical condition, or are injured in some kind of accident, you’ll be responsible for every bill – procedures, medications, hospital care, and even doctor’s visits will all come out of your wallet, with no help from an insurance company. And that could put you deeply into debt.
So, instead of risking financial ruin, here’s how you can find the most affordable health insurance policy for your budget.
Buy Directly from a Broker
Although the Affordable Care Act offers online exchanges specific to your state that are designed to help you find affordable insurance plans, the exchange isn’t necessarily the only place you can get low-priced coverage. In fact, the cheapest plans are often found directly through insurance brokers.
Because insurance companies have to subsidize the plans they offer on ACA exchanges, premiums can be higher to compensate. But when you buy directly from an insurance broker, you won’t have to worry about this.
In order to find the lowest-priced coverage, search for insurance brokers in your state or region. You can search online, looking for health insurance brokers who’ll help you locally or over the internet. Ask these brokers what plans and coverage levels they offer, and compare premiums.
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Find a Group Insurance Plan
If you don’t work at a company that offers health insurance benefits, you probably assume you can’t enjoy the benefits – and the lower costs – that come with group insurance plans. However, it’s actually easy to score group benefits if you look for group plans outside of work.
Group plans often offer less expensive than individual plans because you’re pooled together with others. And group plans can be held by any kind of group, like alumni organization, professional associations, trade unions, or even small business organizations.
If you’re self employed or can’t access group insurance benefits at your current job, look beyond the workplace. Search for organizations in your area and online that you can become a member of and take advantage of a group plan. The National Association for the Self Employed and the Alliance for Affordable Services are just two options that offer group insurance, and you can find many others when you search online.
Lower Your Annual Income
The ACA is designed to help low-income individuals and families afford health insurance. However, if you make too much money each year, you won’t be able to qualify for the subsidies offered to make those plans and premiums affordable.
However, there is a way to lower your income in order to get a subsidized plan. The ACA limits do take into account your modified gross income, meaning you can use that number instead of your pre-tax income to qualify for low-cost plan. Consumer Reports writes that you’ll qualify for financial help if you make $48,420 or less per year ($64,960 or $98,400 for families of two and four respectively) as modified gross income.
And if you’re self-employed, you have the freedom to adjust your income in order to meet ACA subsidy requirements. You can factor in tax deductions for business expenses out of your income, deducting things like office space rent, business supplies, and even your phone bill to lower your income and qualify for a subsidized plan.
Don’t Pay the Penalty – Find an Affordable Plan Now
If you’re feeling caught between paying sky-high insurance premiums every month for insurance you don’t use often and paying an annual penalty that could put your financial health at risk, you need to take action during open enrollment. You have only until December 15 to choose a plan and get coverage for next year.
And you don’t have to work hard to find a budget-friendly health insurance plan. You just need to know where to look for affordable options. Follow the above tips and do your research online, comparing different plans, coverage levels, and premiums – with a bit of effort and knowledge, you’ll find the right insurance option for your needs and your budget.