The ultimate guide to buying insurance on HealthCare.gov

December 10, 2013

We have arrived at Obamacare's Dec. 24 deadline for purchasing insurance coverage that begins on Jan. 1. And with HealthCare.gov now working for most -- but not all -- consumers, questions are pouring in about how to actually make an informed, successful insurance purchase. This guide is what you need to know -- and we'll be updating it going forward, as we get new questions from readers.

I would like to buy health insurance through HealthCare.gov. Can I?

Well, it was December 23. Then the White House extended it to December 24. Merry Christmas!
Well, it was December 23. Then the White House extended it to December 24. Merry Christmas!

Okay! First things first is figuring out whether you are eligible to shop on HealthCare.gov. So, ask yourself two questions: Are you a legal resident of the United States and not incarcerated? If the answer to both is yes, congratulations! You can shop for health insurance on the new exchange. If you do receive insurance through your employer, however, you may not qualify for financial help -- but you could still purchase coverage through HealthCare.gov so long as you're willing to pay the entire premium.

There are a few different options on how to proceed. Most obviously, you can log into your computer and head to HealthCare.gov and shop on your own. You could also track down a local navigator, whose whole job is to help you shop for coverage. You can find a directory of them here.  Shoppers can also call a call center or submit this paper application.

Should I apply online, on paper or in person?

That depends: If you feel pretty confident navigating the system yourself, you can give HealthCare.gov a shot on your own. If you think you might want some help understanding your options, a navigator could be a good option, or the call center. Federal officials have reportedly begun quietly asking navigators to steer away from paper applications because of concerns that they won't be processed in time.

You can also still buy insurance directly from an insurance company, so long as you don't live in Vermont or D.C. (those two places have moved their entire individual market onto the insurance exchange, meaning there is no longer an outside market to buy directly into). This option is likely best for people who do not think they will qualify for financial subsidies (a bit more on that later).

I'm going to shop on HealthCare.gov. How can I make this as painless as possible? 

Start by making an account. This step, which didn't work so well back in October, seems to be working decently smoothly now.

healthcaregov2

Get ready to recall some obscure facts about your childhood! In order to create an account, you will need to fill out a series of security questions. These include things like the street you grew up on or your first pet's name.

After account creation comes the application process. If you want the absolute easiest process, you can decide not to apply for financial assistance.


Deciding not to apply for financial assistance will mean you don't answer a number of questions about how much you earn and move a bit faster to the shopping process.

The downside of skipping this step is that you could miss out on a tax credit to help purchase insurance coverage. If you earn less than $45,000 -- or are a family of four that earns less than $96,000 -- there's a decent chance that you do qualify for some help and so its likely worth taking the extra time to go through the additional questions about your income. You can also use this Kaiser Family Foundation calculator to estimate whether you would qualify for financial help.

One thing that can speed up this process is keeping a copy of your tax return handy, since you'll get questions about how much you earned last year.

Er, what is a cost-sharing? And a deductible? Are these words I should know?

Rest assured, dear readers: The vast majority of Americans are confused by some of the most important terms that explain how much health insurance costs. One study, by a professor at Carnegie Mellon University, found that only 14 percent of Americans could correctly define four key terms: Deductible, co-pay, co-insurance and out-of-pocket maximum.

Here's a quick guide to what each of those mean:

  • Co-pay - This is a flat amount that you pay when you go to the doctor for a visit. The co-pay stays the same regardless of the actual bill your doctor charges. If you have an in-network co-pay of $10, for example, you can expect to pay that amount for many of your doctor visits.
  • Co-insurance - This is similar to a co-pay, in that its an amount you pay when you turn up at the doctor. But, unlike a co-payment, this doesn't stay the same every time -- it's a percentage of the cost of the actual procedure rather than a flat amount.
  • Deductible -- This is the amount you need to spend on health care before your insurance company starts kicking in with payments. As mentioned earlier, preventive care is exempt from this and covered at no-cost immediately, regardless of how big a deductible is.
  • Out-of-pocket maximum -- This is the absolute limit on how much you will spend on health care in a given year. For most plans, this is set in the federal law at $6,350 (although some insurance plans got a one year exemption). This is different than your deductible because, even after you meet your deductible, you may still face some charges like co-payments and co-insurance.

So how big a deductible should I pick?


It depends a bit on how you plan to use the health-care system -- although remember that the best laid plans can be destroyed by a car accident or appendicitis.

Any plan you pick is a balancing act between the monthly premium and yearly deductible. The premium is the amount you pay each month to stay enrolled in the insurance plan. The deductible is the amount you have to pay out of pocket until your insurer starts footing the bill (preventive care, including regular checkups, screenings and contraceptives, are exempt from the deductible; they're covered right away.)

Plans with lower monthly premiums tend to come with a higher deductible: You're spending less each month and, in return, will likely see a higher bill if you use a lot of health care. That's why these lower premium plans, which tend to be in the bronze or maybe silver tier, tend to be better for people who don't foresee very significant health-care costs in the next year.

If, on the other hand, you do foresee significant costs -- you have a big surgical procedure coming up, for example, or have expensive medications -- then you might consider one of the plans with a higher premium and lower deductible. Some platinum level plans -- the very highest tier -- have deductibles in the range of $500 but also the highest monthly premium payments.

What are these metal levels like bronze and platinum?

To explain why the metal levels matter, we're going to have to talk about a term called "actuarial value." Wonkblog apologizes in advance and promises an adorable animal video at the end of this post in return.

Figuring out how much someone will pay for health care in an insurance plan is messy because, as discussed earlier, there are so many different types of payments. There are different co-payments and cost-sharing levels for different procedures.

So, the health wonks of the world came up with a measure called actuarial value, which represents the percent of the bill that the average consumer in a given plan ends up paying. Each metal level represents a different average.

In the bronze plans, for example, the average consumer ends up paying for about 40 percent of their medical bills -- with the insurance plan kicking in 60 percent. In a silver plan, the average subscriber pays less, covering about 30 percent of their medical bills.

In a gold plan the average subscriber pays 20 percent of their medical bills and, in platinum, 10 percent. Gold and platinum plans tend to have higher premiums because they offer this more robust coverage, where subscribers typically pay less out of pocket when they do need to access the health-care system.

The metal level doesn't necessarily tell you what portion of your own health-care bill you would end up paying. But it is an average that gives you a sense of how much of your bills you would be on the hook for, and that's what makes it an important metric to look at.

Where can I find this information on each plan?

One place to look is the summary of benefits, a new eight-page form that each insurance plan is now required to provide. It's a bit like a nutrition label for health coverage and looks like this:

summary of benefits

Can I keep my doctor?

That depends on if your doctor is in-network in your new health insurance plan, meaning they are one of the physicians that the insurance carrier has a contract with to see patients.

HealthCare.gov does not have provider directories for the health insurance plans it sells. It does, however, typically include a link out to a given health insurer's provider director. It can be a little difficult to find on the Web site but, with the magic of Microsoft Paint, you can see where to look.

provider directory

I started an application way back in October and can't seem to fix it. What should I do?

This was a vexing problem for some early HealthCare.gov shoppers: They would have something wrong in their application, but there was no way they could go back and change something.

healthcaregov remove

As part of the changes rolled out at the start of this month, HealthCare.gov now has a "remove" button that lets you get rid of an old application and start again. 

Let's say, hypothetically, I choose the wrong plan. When can I switch?

If you haven't paid your first month's premium, you can go ahead and switch now. But if you have picked a plan and paid for it, you cannot switch until next year. The health-care law has an annual open enrollment period, which is pretty much the only time that you can switch plans. There are exceptions to this rule: If you have a major change in your life, such as losing your job or moving, you can switch plans. But if you have a major health-care event come up, like an expensive surgery, you can't immediately upgrade to one of the more robust plans that would pay a greater chunk of your medical bills.

How do I know if I'm actually signed up?

There have been a number of back-end problems with HealthCare.gov that affect the Web site notifying insurance companies of their new enrollees. The federal government estimated last week that about 10 percent of the enrollments were being effected by these issues.

Officials running the Web site suggest that anyone who enrolls in coverage call their insurance company to confirm that they've signed up. New enrollees are also required to pay their first month's premium by Dec. 31 January 10 in order for their coverage to take effect on Jan. 1. This step is typically taken with health plan that a shopper selected and not on HealthCare.gov.

Ahem, I was promised an adorable animal in exchange for reading about actuarial value.

Indeed you were. So here's an awesome fox hunting in the snow.

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Washington Post · December 10, 2013