Navigating Health Insurance

With multiple ways to sign up for an abundance of nitty-gritty plans, health insurance selection is quite complex. Depending on their medical needs, employment, and financial situation, people may get their best option through their parents’ plan, state-sponsored NJ FamilyCare (NJFC), the federally sponsored “Obamacare marketplace,” an employer, or via an insurance broker. To really make it fun, it’s not unusual for families to have multiple sources of insurance; say the husband on an employer’s plan, the wife on her parents’ plan, and children on NJFC!

There are some resources to help make sense of it all, but ultimately it is necessary to learn this new language and venture into foreign territory to get the best insurance coverage at the lowest cost. I thank Aaron Wieder of Cosmo Insurance for his help clarifying the five potential sources for health insurance, as well as the LRRC for kindly providing some important technical details.

   1. Join your parents’ plan

Obamacare changed many rules in the health insurance industry. One major change is that children can stay on their parents’ commercial insurance policies until age 26, even after they’re married and financially independent. Because many parents are on family plans that don’t increase rates beyond the first few kids, keeping a newlywed child on the policy may equal free insurance for them.

Especially if the parents and single children hit the maximum out-of-pocket levels anyway, parental insurance may be the best deal for young couples. Note, however, that some parents’ plans aren’t favorable for maternity coverage, and it may not make sense to join the plan and then get stuck with it until next year’s open enrollment.

   2. NJ cares about families

Government assistance for medical insurance used to be reserved for the poor and elderly. No more. Health insurance has become prohibitively expensive, and many states now help middle-income families with coverage. For example, children living in a New Jersey household of six with an income of even $120,000 (well above poverty levels,) are still eligible for subsidized NJFC health insurance.

Adults with very low incomes can get free Medicaid-sponsored insurance too. NJFC enables even the poor to get solid coverage for free, or at least affordably, but it’s vital to learn and follow its complicated rules. Those who get NJFC coverage they aren’t entitled to, even mistakenly, may end up facing massive medical bills and even criminal prosecution. Any questions about NJFC should be directed to the State or the very helpful Lakewood Resource and Referral Center (LRRC).

   3. Obama’s favorite website

Obamacare is another system that helps people pay their commercial insurance premiums (i.e., monthly bills). This assistance is available for those with limited incomes that aren’t low enough to be eligible for NJFC (although the children might be on NJFC). Premium subsidies are paid for commercial insurance plans which eligible participants select via an online health insurance ‘marketplace’, Healthcare.gov.

This sleek website asks for family data and income and then reveals the plans and subsidies available, as well as plans that are not eligible for subsidies. All the plans on the marketplace are identical to commercial insurance. Therefore, it can be worth getting even unsubsidized insurance there because a fall in your income during the year will allow subsidies to kick in. The marketplace is definitely worth a look, especially since it clarifies NJFC eligibility and directs the entitled to apply there for even cheaper coverage.

   4. Employer double-edged sword

Having an employer who offers health insurance can save you or cost you thousands of dollars. Marketplace subsidies generally aren’t available to those who have insurance options from their employers (or spouses’ employers,) even if these plans are very costly with meager coverage. While some employers use their size to secure excellent plans and even help employees pay the monthly premiums, many provide the minimum coverage required by law. It is what it is, and depending on what’s on offer at work, employees may be better off getting their own individual policies through a broker or the unsubsidized Marketplace.

   5. Going your own way

If you definitely aren’t eligible for (or don’t want) NJFC, Marketplace subsidies, your parents’ plan, or employer’s offerings, it can be helpful to work with a broker to help sift through your many options. The private route presents more choices, but the abundance also makes the selection process even more overwhelming. While you can purchase private plans through the marketplace, you stand to gain from going through a knowledgeable broker. The coverage and premiums will be exactly the same as those offered on the marketplace, and using an agent provides you with free professional assistance.

Where to start

Those who are under 26 should have a chat with their parents to see if adding them to their policy would add any charges. And besides the self-employed, everyone needs to find out if their (or spouse’s) employer offers any coverage, because whether or not they enroll in the offered plan, NJFC and Marketplace assistance may be dependent on that. Those who plan on purchasing individual insurance without any assistance might as well call a broker right off the bat. On the other hand, if you aren’t sure what to do, you can head over to Healthcare.gov and run the numbers yourself. Those who are technically or numerically challenged or simply want excellent free guidance should make an appointment with an LRRC counselor.

Getting the right plan can make a big difference in your family’s financial and medical well-being. Putting in the time and effort is therefore very worthwhile.


Want to dig deeper?

Try these related articles

Insurance: You Can Hate It, But You Can’t Ignore It

Health Insurance in Your Golden Years: Medicare Explained

Insurance: Mind the Gaps!

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