Tips for Choosing a Health Care Plan Under the Affordable Care Act

Health Care

As part of the Affordable Care Act, there are new coverage options available to you and your family for health care if you are uninsured and don’t have insurance options through your employer, Medicaid, or Medicare.

While the Health Insurance Marketplace, also known as the online exchange, will open for 2015 enrollment on November 15, 2014, it’s never too early to start thinking about new health care plan options.

If you happened to miss the 2014 open enrollment deadline on March 31st, you can still buy a Marketplace health plan if you qualify for a special enrollment period following certain life events like getting married or having a baby.

If you have questions about health care and the Affordable Care Act, TurboTax Health is a free resource available to help answer your questions, get information on your healthcare options, and understand if you qualify for money-saving subsidies from the government that can help lower your monthly health insurance premium.

As you start to sift through potential insurance plan options, here is an overview of common terms you may see related to the Affordable Care Act and purchasing health insurance in the Marketplace:

  • Subsidy or Premium Tax Credit: The amount that the government contributes to help pay for your health insurance.  Under the Affordable Care Act, this subsidy, also know as the premium assistance tax credit, will help people who can’t afford it pay for health insurance.
  •  Tax Penalty: Under the Affordable Care Act, anyone who was not enrolled in health insurance by March 31, 2014 will receive a tax penalty, except for those who are exempt.  There is no penalty for a single gap in coverage of less than 3 months.
  •  Monthly premiums: The amount paid for your health insurance for a set time period (like monthly payments or annual payments).
  • Plan category: All plans in the Marketplace are separated into five categories, including Bronze, Silver, Gold, Platinum, and Catastrophic which are based on the cost you are responsible for.
  • Out-of-pocket costs: Any expenses for medical care that aren’t paid for by your insurance plan.
  • Benefits: All plans sold through the Marketplace offer the same essential health benefits, cover pre-existing conditions, and offer free preventive services.
  • Insurance plan types and provider networks: Some plans allow you to see almost any doctor or visit any healthcare facility; others limit your choices to a network of doctors and facilities or require you to pay more out-of-pocket should you choose to use providers outside the network.

Overall, when choosing a health insurance plan you want to think about balancing how you much you will pay each month through a monthly premium with how much health care you think you and your family will need throughout the year.

Here are a few other things to keep in mind as you review potential health insurance plans so you can pick the best one for you and your family during the open enrollment season:

  • Decide which type of plan best meets your needs and budget.
  • Check that your primary doctors and specialists are included in the health care provider’s network.
  • Understand how medical prescriptions are covered.

As with all tax laws, TurboTax is up-to-date with the latest tax law changes.  If you have more questions about the Affordable Care Act and how it impacts you and your taxes, you can get answers from TurboTax Health.

Comments (2) Leave your comment

  1. It is still the case that one can only qualify for a subsidy by applying through an exchange (and the law says only through a State exchange, not a Federal one … subject to the Supreme Court decision yet to happen.) But there continues to be a very serious security problem on Healthcare.gov, so what is a person supposed to do ???? ????? ?????

    As Christine has said, even with the subsidy, premiums are sky high.

  2. Still can’t seem to find a plan that fits my needs or budget, despite eligibility for a subsidy. Will the new enrollment period offer more choice of plans? Also, why are there “open” or closed enrollment periods if this is now a law that individuals must carry health care insurance? When will we see the statistics correlating insurance coverage with improved health outcomes? Surely that would have been made public prior to the passage of the ACA, however the government website contains nothing supporting that presumption: i.e, insurance = improved health.

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