If you live in Tennessee and are looking to enroll in a Marketplace health insurance plan for the first time, or if you are looking for a change from your current group coverage, there are a few things that you need to consider and understand before you enroll.
Our company, American Exchange, helps guide people through the options on the health insurance marketplace, and with thousands of policies in force in Tennessee, we have seen the entire spectrum of needs and provided advice for those individuals and families on the best plan to fit nearly every situation. In the insurance industry, this is called a Needs Based Approach.
Needs Based Approach
The following are the steps that go into the Needs Based Approach of selecting a health insurance plan.
The best way to choose a health insurance plan is to identify what you need from the healthcare system. Whether you require regular medical services to treat a chronic illness, like diabetes, high blood pressure or asthma, or for treatment of an acute injury that requires a procedure at a hospital, you should identify your needs so that you are prepared for and understand the cost of that service at the time you receive it.
Identification is the easy part, and please remember that all preventive services are covered at 100%. You will only pay out of pocket for services related to an injury or illness. Leave the annual physical out of the equation as it will be paid at 100% as long as it is done by a facility and physician in network.
Just like buying a car, different people need different things. A younger family of four who have few chronic health conditions that require prescription drugs and regular office visits will need a different plan design than a single 27 year old male.
Before I start, when I say “plan design”, I am referring to the cost sharing elements of a health insurance plan such as how much you pay and when, and how much the carrier pays and when. Cost sharing elements are outlined by the plan’s deductible, out of pocket maximum, co-insurance, co-pay, etc. For more information on those terms and their meanings, see our other post.
The single 27 year old male is typically going to be a more simple conversation. Within this demographic, the priority is to reduce monthly premium by getting a plan with a high deductible and a smaller network. This individual anticipates not having to use the coverage except maybe for a preventive checkup and to avoid the health insurance penalty. This is a simple and easy conversation.
The Family is going to have a more complex decision to make. Their needs will vary widely from person to person, and more importantly, will have to meet the family budget. We have found that 80% of our individual and family clients are in the silver level tier of coverage. So, more likely than not, the Family will choose something in the silver tier, but bronze, gold and platinum may be effective if the budget can agree. This is a more in depth, complex conversation.
Many people have a preference as to which doctors they see or which hospital that they go to. The origins of that preference can range from a positive word of mouth review from a friend, to the fact that the doctor may be your next door neighbor. For whatever reason that the preference exists, you still need to think critically of what it will cost you to have that doctor or hospital in network.
It may cost you $50 – $150 more per month just to have a favorite doctor or hospital in network. While it may provide peace of mind, it might cost you $1,200 a year to have that doctor or hospital in network. You need to ask yourself, “Is that worth $1,200 to me?” If you see that doctor regularly, and have been for many years, the answer to that question may be “Yes”. However, most people will choose a smaller network to reduce monthly premiums.
When it comes to networks remember: the larger the network, the higher the premium; conversely, the smaller the network, the lower the premium.
At this point, you may have already chosen a carrier based on network evaluation alone, but there are other factors to consider when choosing between carriers. Let’s assume all other factors (pricing, networks and cost sharing elements) are apples to apples.
Let’s start with a few points about the health insurance market in Tennessee:
The health insurance market is different from many other consumer markets primarily because there has been so much consolidation over the last 30 years. Similar to the telecom industry, there are very few carriers to choose from, unless you live in a major metropolitan area (think Dallas, Chicago, Atlanta…). On the individual market, Tennessee is dominated by Blue Cross and Blue Shield of Tennessee because they have provided the best combination of pricing and comprehensive networks. They also have rooted brand recognition in the state, and Tennesseans are wary of carriers without a trusted brand name. While you can find a lower cost option than BCBST, with Community Health Alliance (a carrier new to Tennessee in 2014), largely due to their smaller network, Blue Cross and Blue Shield of Tennessee has maintained the majority of the post-Obamacare market share. You can also find plans from Humana that are competitive in the Memphis and Nashville area.
That being said, it’s important to see what kind of services and benefits you can get from one carrier to the next. BCBST has a discount program for its members, a smartphone app that allows you to view claims, premium balances, and find a doctor… Those small value added benefits can make life easier when working with a carrier. I believe that plan selection and network analysis are more important than these value added benefits, but it can tip the scales one way or the other, given everything else is apples to apples.
Now that you’ve made all the possible considerations that you can, you’re ready to enroll. Make sure to know when your first premium is due, figure out the billing cycle, understand any premium payment grace periods, different methods the carrier allows for making premium payments, and phone numbers to call for customer service issues.
Thanks for reading, and please feel free to contact me or leave a comment below.
Andrew Hetzler is the Chief Operating Officer of American Exchange. For a free consultation with a licensed agent call 1-888-995-1674 or email firstname.lastname@example.org. To contact Andrew directly, you can email him at email@example.com.