6 Tips for Navigating the New Health Insurance Exchanges

With a week until the launch of national and state-administered health insurance exchanges, now’s the time for consumers to start preparing to pick a plan. After all, open enrollment season was difficult to manage before the addition of the exchanges.

State and federal official have been working to make the enrollment an easy process, but there are sure to be hiccups, so it’s in consumers’ best interest to be prepared.

“Exchange developers are trying to figure out the best consumer experience,” says Carrie Mclean, director of customer care at eHealthInsurance. “We’ve been doing this for a long time and implemented thousands of different changes to make it user friendly. The exchanges aren’t going to be flawless from the get go.”

To help remove some of the guesswork, follow these six tips for navigating the new health-care insurance exchanges.

Tip 1: Find Out if You Qualify for a Subsidy

Many Americans will be eligible for a government subsidy that will reduce the cost of their health insurance plan. Consumers without employer-sponsored health care with a household income that is between 133% to 400% of the federal poverty level should be eligible for the tax credit.

“Consumers who want to apply for a subsidy will need to do so through their state exchange or a private marketplace partnering with their state exchange.” says McLean.

Keep in mind that if you are applying for a subsidy, it might complicate the process, so McLean recommends factoring in about 40 minutes to complete the subsidy application. “You’ll need to pull out the previous year’s tax returns and understand who is in your household and what income you are reporting,” she says. “It’s not going to be a quick fill out my name and pick a password type of thing. It’s going to take a little time.”

Note of caution: If you get more subsidy help than you’re entitled to receive, you may need to pay some of it back when doing your 2014 federal taxes, McLean says, so it’s best to give the most accurate financial information.

Tip: 2 Kick the Tires Before Purchasing

Experts expect the health exchanges to be hard to navigate, which is why Kevin Luss, owner of financial services firm The Luss Group, recommends spending time exploring the exchanges before purchasing a plan.

“It’s brand new,” says Luss.  “Don’t rush into buying this any faster than you would rush into any large purchase.” While the rates for the plans have been released, the coverage or network providers are still unknown so you should make sure your preferred doctors, hospitals and labs accept the plan before purchasing.

Tip 3: Know the Coverage Start Date

Consumers can start shopping for their health plans come Oct. 1, but that doesn’t necessarily mean that’s when a plan’s coverage starts.

Coverage for the new plans won’t start until Jan. 1 2014. “If you’re uninsured and buy a new health reform plan on October 15, it doesn’t mean you can start using your coverage on October 16,” says McLean.

Tip 4: Don’t Make Price the Only Factor  

Consumers are still bargain hungry, but Luss says there aren’t deals to be had when it comes to the health insurance plans on the exchanges.

“If a plan is less expensive, it is because it provides less coverage,” he says. “We have no reason to believe this dynamic will change in the exchange marketplace.”

Tip 5: Be Wary of Offering Up Personal Data

According to Luss, in an effort to save time, some exchange operators haven’t undergone background checks and the computer systems are brand new which could compromise security.

He warns against providing too much personal information before verifying the exchange is secure and that the integrity of your health information and personal data can be guaranteed.

Tip 6: Don’t be Afraid to Ask for Help

People often shy away from using a middle man for guidance because of potential fees, but when it comes to navigating the new exchanges, talking to a licensed broker could help save money in the long run by finding the right plan.

“The cost of a broker has been built into the rates just the same as it has been outside of the exchanges,” says Luss. “It costs you nothing extra to utilize a licensed representative who is experienced in the field.”

Experts recommend only working with a broker who is licensed in the state you are buying the insurance plan. States are also providing navigators and other trained representatives available over the phone, but most won’t be licensed health insurance agents, which means they can’t make specific plan recommendations.