14 Nov 2014

(2015 version) Health Insurance Strategy Guide for CA Individuals and Families

14 Nov 2014

Already know what you want?  Great!  Start here to apply directly to a carrier, or follow the instructions here to apply through Covered California.

Everyone else, please consider the following 6 questions:

1. Will you qualify for a tax credit/premium subsidy in 2015?  If yes, your next steps are clear, and the time to act is now.  Sign up for an account at Covered CA (or log in to your existing account), and please be sure to follow these instructions to assign Allpointe as your agent if you have not already done so.  Were you a Covered CA participant in 2014?  Follow these instructions to renew your tax credits and either renew or change your current plan.  Now your choice is narrowed to: which insurance company (Kaiser, Anthem, Blue Shield, Health Net, or one of 6 regional carriers that may be available depending on where you live) and what metallic level (Bronze, Silver, Gold or Platinum). Please see “Do I need to change plans?” below, especially if you have had Health Net’s PPO in 2014.

2. Can you get below the threshold to qualify for a tax credit?  We have talked a number of individuals and families that are on the cusp of qualifying based on projected 2015 Modified Adjusted Gross Income (MAGI). Talk to your accountant or tax adviser about whether you are eligible to make contributions to a Traditional IRA or Health Savings Account (HSA) in 2015, and if that could reduce your MAGI to get under the threshold for a health premium tax credit. In some extreme examples, a family with parents in their 50’s or 60’s, making a contribution of a couple thousand dollars into an IRA could qualify themselves for ten to fifteen thousand dollars in premium tax credits.

NOTE: We have embedded the Kaiser Family Foundation’s tax credit calculator (with their permission) on our site, here.  You can also view what factors into your Modified Adjusted Gross Income (MAGI) here, from UC Berkeley.

3. Is the tax credit worth it?  We recommend clients consider their participation in the Covered California exchange carefully.  If your expected tax credit is small, consider:

  • There is a greater choice of plans outside of the exchange
  • There are larger networks of providers available outside of the exchange
  • Applying directly to a carrier outside of the exchange is a much faster application, cuts out a layer of bureaucracy, and is guaranteed coverage

4. Do you need to change plans?  We recommend everyone review their current plan choice for total cost and the network of providers offered.  However, two large groups of clients should strongly consider changing plans:

  • Those who have a Covered California Health Net PPO – the network of providers will be decimated in 2015
    • Consider a move to Blue Shield, Anthem Blue Cross, or even Kaiser while preserving your tax credits
  • Those who have a 2013 Cigna plan that was grandfathered in for 2014 – Cigna will eliminate all of these plans, use a new network that excludes Sutter Health, and their 2015 rates have leapfrogged the market
    • Consider a move to Assurant (great provider network) or Anthem Blue Cross (also no Sutter Health, but at a much lower price point)

5. Have your providers changed plans?  While most of the big provider network changes for individual plans changed at the beginning of 2014, smaller changes can still occur as providers and carriers will periodically renegotiate terms. The biggest recent example of this was Anthem Blue Cross and Stanford Health ending their relationship back in September — only to resolve their contract dispute a few days ago.  Sutter Health and Palo Alto Medical Foundation are currently negotiating 2015 contracts to remain in-network with Blue Shield and Health Net individual PPO plans, but this has not been completed.

Please check out our guide on how to search the carrier networks, as well as what to ask your doctor or other provider, to ensure that they are in-network for you in 2015.

6. Should you choose a different metallic-level plan?  The vast majority of individuals chose Bronze or Silver plans in 2014, and we expect that to continue. For those with specific health needs and/or predictable, high medical expenses, a Gold or Platinum plan can make sense.  Here are a few strategies to consider when making your choice:

  • Go for the Gold Bronze (but pair it with a low-cost accident rider that will pay your deductible)
  • High-deductible plans compatible with a Health Savings Account (HSA) are still a very good strategy for healthy individuals and families.
    • Learn more about HSA’s here
    • For two-person families, we recommend reducing risk by applying separately
    • The accident rider can be used with an HSA plan as well, offsetting a lot of the financial risk that comes with a high-deductible plan
  • Seek out alternate plan designs that meet your specific needs
    • Assurant Health continues to offer several plans with lower out of pocket maximums than any other plans on the market (some as low as $2,000) – these can be a good fit if you are having a baby, a scheduled surgery, or other predictable, large medical (or prescription) expenses in 2015

Most carriers have released their 2015 plans and rates for quoting, allowing you to quickly run quotes for you and your family that can be sorted by carrier, price, deductible and metallic level. Please consider scheduling a call with us to help determine the best plan choice for you in 2015.

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