What you need to know as you shop for health care

With twice as many choices and half the time as last year to sort them out, consumers who buy health coverage individually - those who don't get it through an employer or Medicare, for example - must be able to quickly navigate jargon and fine print.

Are you willing to pay more for fewer surprises if you get sick? And with shrunken provider networks, is your doctor still covered?

If you're a small business owner, what are the options when it comes to providing coverage? What are the penalties if you don't? And what in the world is a MAGI?

'My meetings are taking one-and-a-half times longer than they have in the past,' said independent agent Amy Purcilly, who represents those who purchase small group insurance. 'The law is so complicated.'

But it's also worth it for millions of Americans who otherwise wouldn't have insurance.

Brian Young has spent much of the last year trying to get coverage, and the confusion began with last year's glitch-plagued, controversy-dogged rollout of www.healthcare.gov, the portal for online state exchanges where consumers can compare and buy policies.

He said he was first told he was eligible for advance tax credits, or subsidies, that would reduce his monthly premiums. Then he wasn't.

Instead, he was told he needed to sign up for Michigan's expanded Medicaid program, Healthy Michigan. Then he was told that because he lives with his elderly mother and her trust fund income counts in his application, he isn't eligible after all.

All this pivots on his Modified Adjusted Gross Income, or MAGI, a formula the marketplace uses to determine whether a shopper is eligible for Medicaid, gets advanced tax credits that could reduce the costs of coverage from the marketplace, or gets no assistance at all.

For now, he's in a plan called Keep Fit, a leaner, grandfathered policy offered until the end of this year by Blue Cross Blue Shield of Michigan. And he's back to sizing up plans - this time without an advanced tax credit - that will fit into his annual income of just below $20,000.

Under the new law, insurers can't deny coverage to someone or raise their rates based on their health status or the kind of work they do. But they can charge more based on age. And at 61, that means Young is looking at premiums that top $560.

The Farmington Hills man who retired from the beverage distribution industry said he still supports the idea behind the 2010 federal law that made the state exchange, or the Michigan Health Insurance Marketplace, possible.

'I can do it, but in my mind, I no longer see the 'affordable' part of this 'affordable health care,' at least for me,' he said.

But what choice does he have?

'If I get in a car accident - God forbid - or have a heart attack, I'd like to think that I'd be somewhat covered,' he said. 'People have to know, this might be a good thing overall, but it's not easy and for a lot of us, it's not cheap either.'

Know the real costs of coverage

Perhaps one of the biggest lessons for consumers last year was about the real cost of insurance.

This year's there's a new wrinkle: Extremely small networks of providers. Insurers present them as a great deal for the budget, and - as long as your provider is in your network - that's fine. Monthly premiums, in fact, may be much lower.

But if you seek care outside your network, it can cost plenty. In fact, in these plans, care outside the network, except in emergencies, isn't covered at all.

Sticker shock last year may have some shopping more cautiously this time around, some agents and consumer advocates told the Free Press.

After enrolling in policies with low or even zero-cost premiums, many consumers last year felt they were then slapped by jaw-dropping high deductibles and other out-of-pocket costs.

In other words, lower monthly premiums meant bigger costs if they got sick.

'There are some plans out there that have a $4,000, $5,000, or $6,000 deductible and it doesn't cover anything until that deductible has been satisfied first,' said Percy Richardson, an independent agent with Southfield-based Great Lakes Benefit Group. 'You want to be mindful.'

This year, the maximum out-of-pocket swells slightly. Plans must cap maximum out-of-pocket costs - such as for co-pays and deductibles - at $6,600 for an individual plan and $13,200 for a family plan. Those costs do not include monthly premium.

Even staying in the same plan - one that was satisfactory this year - can be a hazard for at least two reasons. First, the plan's benefits might have changed or the network might have shrunk.

Secondly, by not re-enrolling via the marketplace, the system will do it automatically, but without adjusting monthly premiums or changes in your income or family size. You may pay too much, or - if you don't pay enough - you'll have to pony up the difference come tax time in 2016.

Many won't be able to enroll in existing plans

Some 74,000 Michiganders won't be able to reenroll anyway. They are members of the Blue Cross Blue Shield of Michigan Keep Fit plan.

In the years leading up to the October 2013 rollout of the state marketplace, the state's largest insurer embraced health reform and reworked its offerings so that its policies offered the more robust benefits required under the 2010 law. The exception was Keep Fit, a leaner policy the insurer chose to keep after the Obama administration, facing a backlash over canceled policies, allowed insurers to extend cheaper policies temporarily.

But that plan goes away this year, meaning people will have to buy policies on the marketplace.

Other consumers might find themselves pushed into the marketplace as small employers dump coverage or it becomes more expensive to stay on a spouse's insurance.

Don't have health insurance? Don't forget the penalties

Under one of the most controversial components of the 2010 Affordable Care Act, those who refuse to buy coverage face increasing penalties. That fee is calculated in one of two ways and will be figured into your taxes the following year: either a percentage of your household income or a flat fee, whichever is higher.

If you don't have coverage in 2015, you'll pay the higher of these two amounts in 2016:

■ 2% of yearly household income. Only income above the tax filing threshold - generally about $10,150 for an individual or $20,300 for a couple filing a joint tax return - is used to determine the penalty. The maximum penalty is the national average premium for a bronze plan, the lowest of four levels of plans - platinum, gold, silver and bronze.

■ $325 per person for the year, or $162.50 per child under 18. The maximum penalty per family under this method: $975.

There are a few exceptions. Members of a federally recognized Indian tribe, for example, are exempt as are those with extreme financial hardships.

Small businesses won't have a reprieve next year

Some businesses this year were able to put off the requirements of the health care law after the Obama administration gave them a one-year reprieve from the penalties for non-coverage and allowed them to temporarily renew old policies, even if they weren't fully compliant with the law.

Now many of those businesses will be facing the Affordable Care Act for the first time next year. A decision by Blue Cross Blue Shield of Michigan - the largest carrier in the state - to stop renewing the older policies has resulted in some employers seeing big price hikes to continue offering insurance.

Starting in 2015, businesses with 100 or more full-time employees must offer health insurance to at least 70% of their workforce or pay fines. The fine will be about $2,000 for every employee in the company, minus the first 80 employees (That number lowers to 30 employees in 2016, as the required minimum for coverage rises to 95% of workforce).

Businesses with 50 to 99 full-time employees have until 2016 before the penalties kick in. Small businesses with under 50 employees are exempt from coverage requirements under the law, which defines a full-time employee as someone working at least 30 hours a week.

Insurance brokers are seeing some businesses get hit with double-digit price increases because the new policies must offer by law broader coverage, such as prescription drugs and free mammograms and colonoscopies.

'I have businesses saying, 'I have 10 men working here, why do I need maternity coverage as part of my plan?' ' said Kareim Cade, CEO of Great Lakes Benefit Group in Southfield.

Because not all businesses can afford the new rates, a few employers have been dropping coverage altogether, taking the fines, and directing their employees to the individual exchanges at www.healthcare.gov, where they may be eligible for subsidized coverage.

'It's not because they're not interested in covering their employees,' said Cade. 'But when you're getting those 40% to 50% increases, it is really cost prohibitive to have those plans.'

Contact Robin Erb at rerb@freepress.com at 313-222-2708. Follow her on Twitter @Freephealth.

Read or Share this story: http://on.freep.com/1A4V50J