Help! How to cope with skyrocketing health insurance rates

If you have been following the news recently, you have probably heard that the prices of health insurance are increasing dramatically in Tennessee.  Recently, I watched a smiling anchor woman say something to this effect, “Bad news, Tennesseans, if you’re using Healthcare.gov for your health insurance… Rates will be dramatically increasing.”

This is true but misleading.  If you are using healthcare.gov, your rates will be increasing.  However, this is not the whole truth because it implies that your rates will be increasing only if you bought your insurance through healthcare.gov.  The truth is that the cost hike is more far-reaching than just effecting those currently using healthcare.gov and this is an important distinction.  The major insurance carriers in Tennessee have all announced rate hikes for 2017 for their individual health insurance products.

Before we go further, first let’s examine where the confusion is coming from.

The problem with branding

Whenever there’s a large innovation or major shift, I’ve noticed that we tend to go through a branding crisis. Do you remember when the Internet was called The World Wide Web and the Information Superhighway and The Net and the Internet??  My point is… There were too many names for the same thing.  Likewise, our nation’s healthcare system has dramatically changed since Obama has been in office and we have suffered a confusing branding crisis.  The Affordable Care Act has been referred to as “Healthcare.gov“, “The Healthcare Exchange”, “The Marketplace”, “The Exchange”, “On Marketplace” and the ubiquitous “ObamaCare”.  No wonder we’re all so confused.

For all intents and purposes, let’s eschew the confusing array of names and simply refer to the overall rehabilitation of our healthcare system as the Affordable Care Act (ACA).  Now, many people are under the impression that, if they did not purchase their healthcare plan from the official Affordable Healthcare Act (ACA) government website, healthcare.gov, then their policy must be outside of, or exempt from the ACA.   This is a misconception.  The truth is, even if you purchased your individual policy without touching healthcare.gov, in other words, directly through BlueCross BlueShield of TN, Humana, Cigna, Aetna or United Healthcare – whether using an agent, through their website, or through an independent agent like myself, then you are, indeed, under the umbrella of the ACA (note: there are a few exceptions).

So, going back to the smiling anchorwoman, if you live in TN and you have individual health insurance, then the rate hike will most likely affect you, even if you did not purchase your plan on healthcare.gov.

Okay, is there anything I can do to avoid the rate hike?

Yes, There are a few stategies you can take to lower your costs

  • The first thing I would look at is your current policy’s doctor network. The network is basically a list of the doctors and hospitals that you can go to and still be covered under your current plan.So, if you change your policy to a smaller network, although this will limit your options, it could save you money.
  • Next, look at raising your deductible.Your deductible is the amount of money that you are required to pay before your insurance starts to cover you.   So, if your deductible is higher, then you are assuming more personal risk, which means that your insurance rates will lower.
  • Look at what I would consider the “extras”, i.e.: dental, vision, prescription, doctor copays, etc. These are all nice things to have, but when the rubber hits the road, it’s often the case that paying for these “extras” out of pocket would actually save you pretty penny verses having certain “extras” as part of your health insurance plan.
  • Determine whether you are eligible for a subsidy or tax credit on gov, if you haven’t already.

It’s important to remember that there is a lot of misinformation out there regarding the always-under-construction work zone that is our healthcare system.  We tend to receive information in 140 characters, sensationalized sound bytes and misinformed articles.

If you have further questions or need an expert opinion, please give me a call (615-478-7146) or email ericjans@ericjans.com.  As always, my advice is always free.

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