Ask the Expert: 6 Tips for Finding Health Insurance

With the Affordable Care Act

Ask an expert about finding health insurance under the Affordable Care Act.

This is a guest post by Napala Pratini of NerdWallet Health. A twenty-something herself, Napala studied biochemistry in college and researched melanoma on a Fulbright grant to Spain. Upon returning to the United States, she changed paths from clinical medicine and research to join NerdWallet, an unbiased and free website that helps people make better decisions about their health care and health insurance.

What is The Affordable Care Act?

The Affordable Care Act (ACA) is a law designed to overhaul health care in the United States and intended to help the uninsured obtain health insurance.

The deadline to sign up for insurance in 2014 is March 31. Miss it, and you will be subject to a tax penalty (unless you qualify for an exemption). The fee is small in 2014, but the cost of the ACA penalty will go up every year.

What Are Your Health Insurance Options?

If you are under age 26, you can stay on your parents’ plan, which isn’t free, but probably more affordable than purchasing your own insurance.

If you’re a college student, you may be able to get coverage through your school. And if your income is below a certain level, you may be eligible for Medicaid.

But, if none of these options work for you, and you don’t have a job that offers health coverage, you should look into buying a plan available through the ACA.

Here are six quick tips for making your way through the ACA maze.

Learn the Lingo

You will encounter many insurance terms in this process, and picking the right plan will require you to have a basic understanding. Here are a few more terms specific to the ACA that you’ll want to know:

  • Premium assistance: If you meet certain household and income qualifications, your monthly insurance payment can be reduced. When you first sign up at HealthCare.gov, the system will determine your eligibility for premium assistance.
  • Health insurance marketplace: Some states run their own marketplace, while others rely on a federal marketplace. Visit HealthCare.gov to be routed to the correct site.
  • Individual mandate: An individual mandate is when a government requires you to obtain or purchase something. In this case, it’s health insurance. If you refuse to buy it, you will be made to pay a fine, or tax penalty.
  • Preventive care: The ACA mandates that insurance plans must provide certain free preventive care services. These include HIV, cholesterol, and depression screenings, as well as immunizations and diet counseling.

Pick the Right Plan Type

Different types of health care plans provide different options in terms of which physicians you may access and whether or not you can see a specialist without referral from a primary care physician.

As a general rule, plans with more options will cost you more than those with fewer. You should take into consideration your health needs, as well as your personal preferences when it comes to how you receive care. Here are a few basic descriptions:

  • Health Maintenance Organizations (HMOs) tend to be less expensive, but more restrictive in terms of where you can go for treatment and require referrals from a primary care physician in order to see specialists.
  • Preferred Provider Organizations (PPOs) typically cost more than HMOs, but offer more variety in the choice of physicians and allow you to see a specialist without a referral.
  • Exclusive Provider Organizations (EPOs) offer lower premiums and eliminate the middle man if you want to see a specialist, but require you to use in-network physicians.
  • Health Savings Accounts (HSAs) are savings accounts where you can put tax-free money to be spent on health-related expenses. You can’t have an HSA without having an insurance plan.

Choose the Best Coverage for Your Needs

ACA plans are divided into four metal tiers: Bronze, Silver, Gold, and Platinum (plus Catastrophic plans, which cover only accidents and extreme illness and are available only to people under 30 years old or who qualify for hardship exemptions).

Bronze plans have low monthly premiums, but high out-of-pocket costs for accessing care. As you increase through the Silver, Gold, and Platinum plans, premiums go up and out-of-pocket costs go down.

If you’re young and healthy, a lower metal-tier plan might be your best bet as protection for emergencies — but don’t plan on seeing your doctor regularly, unless you’re willing to pay.

Base your choice on how often you usually see a doctor, if you regularly buy prescription drugs, and if you have ongoing health issues.

Use Free Tools


Don’t Get Scammed

There have been scams attempting identity theft as well as trying to hijack insurance sales. Some states run their own marketplace, but you don’t have to search for them. Just go to the official ACA website, HealthCare.gov, to select your state and be routed to the proper—and authentic—insurance marketplace.

You can also access the ACA marketplace in person, by phone, or by mail.

Get Your Finances in Order

Tax returns are used to verify income in order to provide premium assistance. You’ll be asked for your previous year’s income in order to estimate how much you will make in the current year and to figure how much of a discount you may receive on your premium costs.

Be careful to enter accurate information on your application—and, if you’ve never done so before, file your own individual tax return, separate from your parents, to ensure you get the biggest discount on your monthly premiums.

[Any reference to a specific company, commercial product, process, or service does not constitute or imply an endorsement or recommendation by National Endowment for Financial Education.]