When to ditch your state's Obamacare exchange
In many states, choices for 2017 coverage on state and federal health care exchanges will be drastically reduced.
A busy screen is shown on the laptop of a Certified Application Counselor as he attempts to enroll an interested person for Affordable Care Act insurance, known as Obamacare, at the Borinquen Medical Center in Miami.
Joe Skipper/AP/File
Since the rollout of state and federal 鈥淥bamacare鈥� exchanges three years ago, health plan choices have dwindled in many areas. The聽聽marketplace was intended to provide a variety of options for those buying individual health plans. But in many states, choices for 2017 coverage will be drastically reduced.
Aetna recently announced plans to pull out of 11 of 15 states鈥� health insurance exchanges for 2017. UnitedHealthcare, Humana and others have already made similar exits, leaving just one or two insurers to choose from in many areas. Sixteen of 23 health insurance co-ops, which are nonprofit health plans meant to be an alternative to commercial insurers, have failed.
The state and federal exchanges play an important role for those who don鈥檛 get insurance elsewhere. Most people who shop on them qualify for tax subsidies to make premiums affordable 鈥� 85% of them, according to the Department of Health and Human Services 鈥� and using the exchanges is the only way to get that help.聽聽for 2017 plans starts on Nov. 1 and runs through Jan. 31.
But if you鈥檙e among the 15% who make too much money to qualify for subsidies, there are some compelling reasons to explore your other options.
More plan options, similar prices
Off the exchanges, many shoppers will find more plan options at similar prices. 鈥淚f you don鈥檛 qualify for subsidies, it really doesn鈥檛 make sense most of the time to even bother with the exchanges,鈥� says Tim Tracy Jr., a Connecticut insurance broker. Tracy is licensed to sell both ACA plans and off-exchange plans.
In many states, the off-exchange market is much larger than what鈥檚 available on the exchanges. If exchange plans don鈥檛 have the benefits you need, or you鈥檙e willing to pay more for better benefits, you might find better options off your exchange.
Non-ACA health plans still have to use the 鈥渕etal鈥� tier system that defines a plan鈥檚 value 鈥� bronze, silver, gold or platinum 鈥� so you can compare both types. A silver plan, the most popular tier on exchanges, pays about 70% of costs for the benefits it covers.
But within those tiers, benefits can vary, and the only benefits that matter are those you鈥檒l use.
For example, look at formularies, the lists of medications insurers will pay for. If you need a specialty drug and it鈥檚 not on an ACA plan鈥檚 formulary, you might find it on a non-ACA formulary with similar premiums. Or you may only find it on an expensive non-ACA鈥檚 plan鈥檚 formulary. If your drug is also expensive, you鈥檒l likely find it鈥檚 worth a higher premium to have it covered.
Similarly, if you have a chronic condition, you could save a lot of money by聽聽with higher premiums because it will pay a larger portion of your medical bills. Higher premiums also typically translate to lower聽, so you鈥檒l pay less upfront before your plan starts paying those bills.
When people shop on an exchange, premiums are the largest consideration, followed by out-of-pocket costs, according to the Robert Wood Johnson Foundation. People don鈥檛 often consider provider network a high priority, but ignoring the network can cost you.
鈥淎 lot of the exchange plans have limited networks, whereas off the exchange we鈥檝e seen much better network access,鈥� Tracy says. That鈥檚 because some doctors simply aren鈥檛 taking ACA plans from new patients or otherwise.
Networks also include labs, hospitals, urgent care and other facilities. In many health plans, you pay the entire charge or a majority of the bill if you go outside the network. These payments don鈥檛 count toward your plan鈥檚 deductible or the annual out-of-pocket limits: $7,150 for an individual or $14,300 for a family in 2017.
If going to your primary doctor for a checkup is the extent of your anticipated health care needs, that鈥檚 no big deal. But if you need a blood test and your doctor sends it to a non-network lab, or if you鈥檙e admitted to a hospital where some providers are out of network, your bills could skyrocket.
Simply put: The larger your provider network, the less you will have to worry about your network.
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Is off-exchange insurance right for you?
If you qualify for subsidies based on your income, the most cost-effective choice is likely to shop on the exchanges 鈥� either the federal exchange or your state exchange, if there is one.
You can find out whether your state has an exchange and whether you qualify for assistance by going to聽聽after Nov. 1, when open enrollment begins, and answering some questions.
If you don鈥檛 qualify for subsidies, you can find plans on insurers鈥� websites, or on independent plan-comparison sites. For personalized assistance, you can contact a broker, but make sure any broker you go to is licensed to sell both Obamacare plans and non-exchange plans.
鈥淚t鈥檚 important they can do both, because you want that unbiased guidance,鈥� Tracy says.
Lacie Glover is a staff writer at NerdWallet, a personal finance website. Email: lacie@nerdwallet.com. Twitter:聽.
This article was written by NerdWallet and was originally published by聽.