How to Help Clients Pick a Marketplace Plan
November 3, 2022
Before we jump into the specifics of how to actionably help clients choose a Marketplace plan that best fits their needs, let’s first look at what Marketplace plans are and when your clients can enroll.
Also, if you want an even deeper dive into the Marketplace, check out our recent webinar, “Marketplace 101: Your Guide to Navigating ACA Health Plans.” These webinars are normally reserved only for our clients, but we’re sharing this one with everyone during Marketplace Open Enrollment!
What are Marketplace plans?
The “Marketplace” or “Exchange” is an online service where individuals and families may shop for and enroll in health insurance plans that are Affordable Care Act-compliant. Insurance plans offered through the Marketplace must be qualified health plans, meaning the plans must be offered by a state-licensed health insurance issuer and meet certain standard requirements. For example, plans must guarantee ten essential health benefits, which include prescription drugs, emergency services, and maternity care. Most importantly, when enrolling in a qualified plan, the only criteria that can be used to determine your coverage eligibility are your age, your sex, and your smoking status. You cannot be denied for pre-existing conditions.
When can my clients enroll in a Marketplace plan?
Open Enrollment for 2023 plans runs from November 1, 2022–January 15, 2023. However, some states that operate their own Marketplaces, like California or New York, may have different enrollment dates. For more information, to enroll, or to make changes, please visit the official Healthcare.gov website. If your client misses the Marketplace Open Enrollment window, they may need to wait until the next Open Enrollment Period unless they’re eligible for a “Special Enrollment Period.” This is applicable if someone loses coverage through a qualifying life event or special circumstance such as retirement, address change, or aging off of a policy (i.e. turning 26). There’s a 60-day window after the event to enroll in a new plan. If your client knows when they’ll lose coverage, that gives them 60 days before the event to get prepared and enroll in that new plan. For a full list of circumstances that can trigger a Special Enrollment Period, check here.
Note: Dropping COBRA coverage before its 18-month termination date is not considered a qualifying life event, so any clients on COBRA who may want to end it early are limited to the Open Enrollment window to make a switch, or they risk needing to wait until the end of their coverage.
How to help clients pick a Marketplace plan:
Now that we’ve gotten the basics out of the way, let’s look at how to actually help clients pick a Marketplace plan.
Determine their healthcare needs and likely utilization for the upcoming year.
Healthcare needs and utilization are major factors in determining what kind of health plan someone is best suited for, regardless of whether it’s a Marketplace plan or not. For example, if your client frequently uses the healthcare system, they likely won’t benefit financially from a high-deductible health plan. This is because they’ll end up paying for a large majority of their care out-of-pocket. Of course, their monthly premium will be higher if they opt for a lower deductible plan. But, first determining your clients’ healthcare needs and utilization will make it easier to compare plans based on deductibles, out-of-pocket costs, and premiums. From there, you and your client can determine the plan that is the best match.
How long will they be on this Marketplace plan?
Not everyone that gets a Marketplace plan plans on being on it for the full year. For example, has your client recently been laid off and needs healthcare coverage until they get a new job that offers employer-sponsored coverage? Are they going on the Marketplace for the few months between their retirement date and when they turn 65 (Medicare eligibility)? If your client is going to be on a Marketplace plan for less than a year, this can impact which plans will work best for them.
What is your client’s tolerance for risk exposure and overall healthcare cost budget?
Of course, budget is a huge factor in choosing a Marketplace plan. One of the first costs to consider is the out-of-pocket maximum; this is the most clients will pay out-of-pocket for covered health services in a year. The deductible, any copayments, and coinsurance for medical care will all count toward the out-of-pocket maximum amount that year. Plans that offer out-of-network benefits will have a different out-of-pocket maximum amount for in-network and out-of-network services. This is very helpful for determining the ‘worst-case scenario’ for any given year. It will help you estimate the potential impact on your client’s personal finances in a year with a high number of medical services, or a service with a high cost. Another question to ask is whether clients would prefer to pay a higher monthly premium but a lower cost for individual medical services received or, would they prefer to pay less each month in premiums, but have a higher cost responsibility when they receive medical care? This question has a lot to do with your risk tolerance and financial situation. If clients have the savings to cover the out-of-pocket maximum for a plan, choosing a lower monthly premium can potentially save money in the months that they do not have many medical services. Alternatively, a plan with higher monthly premiums and lower costs at the time of service can be easy to manage and budget for.
Speaking of costs, one of the perks of Marketplace plans is Premium Tax Credits. Premium tax credits (PTCs) are a type of sliding scale subsidy that reduces the amount you pay monthly for individual or family health plans purchased through the Marketplace. To be eligible, your client must have an annual household income between 100% and 400% below the Federal Poverty Level (FPL), be enrolled through a Marketplace plan, have U.S. citizenship or legal residency, file federal income tax returns, and must not qualify for other programs such as Medicaid and Medicare. Additionally, they must not be eligible for an employee plan that offers minimum essential coverage.
Do they want to continue seeing the same providers?
If your client has a specific doctor or specialist they want to continue seeing, you’ll want to review the network of providers in the Marketplace health plans being considered. Most plans have better rates for using in-network providers, rather than out-of-network providers, so it’s important to know if clients’ providers will be considered in-network for the plan they choose. If your client chooses a Marketplace plan that doesn’t have their provider in-network, they’ll either have to pay more money than they’re used to in order to continue seeing that provider, or they’ll have to find a new provider who is in-network. The same consideration needs to be taken for pharmacies, hospitals, and clinics too.
Do they have preferences that aren’t found in every type of plan?
For example, does your client hate the idea of having to get a referral every time they want to see someone outside of their primary care physician? Do they want access to a Health Savings Account? Do they want alternative health treatments like chiropractic care to be covered under their insurance plan? These kinds of preferences will greatly impact which Marketplace plan will meet their needs.
Make it even easier to help clients pick their ideal Marketplace plan.
Going through these questions and considerations will make choosing a Marketplace plan much easier for you and your clients, but there is an additional way to take out some of the heavy lifting required by you, the financial advisor: Caribou’s healthcare planning software. With this software and a team of experts to help guide you and your client, it’s easy to start including healthcare planning in your service offerings. If you want to learn more or are ready to introduce healthcare planning to your clients, click here to speak with our team.