The price of healthcare is far and away the most important factor for individuals purchasing health insurance on the Healthcare marketplace. This isn’t to say that other factors (referrals, scope of service, accessibility, etc.) shouldn’t be considered, but it’s imperative to understand your client’s priorities when purchasing healthcare and then work with them to make sure that their needs are met.
Understanding Healthcare Priorities
A recent study conducted by the Urban Institute Health Policy Center asked consumers what factors were important as they searched for plans. Researchers found that monthly premium price (with 67.1% of those surveyed ranking it as “very important”) and deductible price (62%) are the two most important elements when shopping for health insurance, followed by choice of providers (55.8%) and co-pays (54.3%). And for those over the age of 50, the numbers increase sharply ― 83.1% for premiums and 74.9% for deductibles.
This information is revealing. Regardless of major changes over the last several years, price point remains a key consideration for consumers, which places healthcare firmly in line with nearly every other major industry in the United States. Now that individuals are required to purchase healthcare in order to avoid tax penalties, more people than ever before are looking for less expensive solutions – hedging their bets that at least they will have some coverage in the event of an emergency and will avoid taking a hit during tax season.
However, lower cost healthcare plans don’t have to mean that your clients get less value. Read on to learn three tips for helping your clients find affordable healthcare that still meets their needs.
Tip #1: Make Sure That Your Clients Understand the Terminology
Many individuals who are shopping for health insurance are unaware of some of the core terms they need to know in order to make informed decisions. Without this baseline understanding, it can be easy to get confused and purchase an insurance policy that doesn’t align with their needs.
These terms include:
- Premium: An insurance premium is the monthly amount that purchasers must pay to ensure coverage.
- Deductible: The deductible in an insurance policy is the amount that the individual must pay before their policy kicks in and the insurer begins covering health expenses.
- Copay: An insurance copay is the fixed amount that individuals pay for certain covered health-related services.
- Coinsurance: Similar to a copay, coinsurance is the percentage the individual must pay for covered health-related services after the deductible has been met or exceeded.
- Out-of-Pocket Maximum: This is the maximum amount an individual is required to pay through their deductible and coinsurance for covered medical expenses in a plan year before their insurance plan begins to cover 100% of eligible health-related expenses.
Tip #2: Assess Your Clients’ Healthcare Needs
In order to find quality, affordable health insurance, you have to be able to identify and assess your clients’ needs. This means determining the number of medical services they’ve needed on average within the past few years, as well as the number of medical services they anticipate during the upcoming plan year.
For instance, if your clients are expecting a child, then that needs to be taken into account when looking for an affordable plan that suits their needs. Or, if the client is a young and healthy individual with very little previous medical history, they may benefit from purchasing a plan with lower premiums and a higher deductible while also contributing to a health savings account (HSA).
Tip #3: Let Your Clients Know About Potential Cost Assistance
In many instances, purchasers do not need to bear the full financial burden of their health insurance on their own. Once you understand their unique circumstances (household income, number of family members, healthcare needs, etc.), you can help them uncover potential cost assistance measures, including:
- Tax Credits: These credits are based on your clients’ income, and they cap monthly premiums between 2% and 9.5% of their total household income per household member. The less income an individual has, the lower the percentage of that income they will have to pay.
- Cost Sharing Reduction Subsidies: These subsidies lower out-of-pocket costs for deductibles, coinsurance, and copays related to covered medical services. Individuals whose incomes are between 100% and 250% of the federal poverty line are eligible for these subsidies.
Additionally, depending on certain factors, clients in California could be eligible for Medi-Cal or the Children’s Health Insurance Program (CHIP), which provides low-cost health insurance to children of families whose income exceeds the threshold for Medi-Cal eligibility.
Blumberg, L., Long, S., Kenney, G., & Goin, D. (2016). Health reform monitoring survey. Urban Institute Health Policy Center. Retrieved from http://hrms.urban.org/briefs/hrms_decision_factors.html.