From Consumer Reports
---- — On Oct. 1, America's health care system underwent its biggest change since Medicare's arrival almost 50 years ago when the major provisions of the Affordable Care Act start kicking in. And although millions of people who have been without health insurance should finally be able to get it, the system will remain just as complex and unforgiving as it is today.
To avoid unnecessary fees, penalties and just plain bad deals, Consumer Reports Money Adviser offers these health-insurance don'ts:
1. Don't assume because you're healthy you don't need health insurance. If you get sick and then decide to buy health insurance from plans made available as part of the Affordable Care Act, you might not be able to, at least not right away. You'll be allowed to purchase only individual health insurance during the initial open enrollment period — Oct. 1, 2013, through March 31, 2014. In subsequent years, open enrollment will run from Oct. 15 through Dec. 7 for coverage that begins Jan. 1.
So if you decide to thumb your nose at the 2013-14 deadline and are hit by a bus on April 1, you'll have to wait nine full months to get health insurance. And needless to say, it won't retroactively pay for care you received when you didn't have it.
2. Don't pick a plan based solely on low premiums. There is no free lunch in health insurance, but there is a menu of payment options to choose from. You can pay for your care upfront, in the form of a higher premium, or later, in the form of a higher co-payment, a bigger deductible or both. Neither form of payment is inherently better; it depends on your personal situation and preferences.
3. Don't carelessly go out of network. One of the big selling points of a preferred provider organization (PPO) over a health maintenance organization (HMO) is that if you have a PPO, you can opt to get your care from doctors or hospitals that don't participate in the plan's network. With HMOs, you can't.
But the fine print can cost you if you're not careful. For instance, if your PPO says it will pay 60 percent of the cost of out-of-network care (compared with, say, 80 percent for in-network care), it will pay 60 percent of whatever it determines is a "reasonable" price for the service — not 60 percent of whatever the doctor decides to charge. So if his fee is $2,000 and your insurance company decides that the fair price is $1,000, it will reimburse you only $600, leaving you on the hook for the other $1,400.
4. Don't miss the Medicare sign-up deadline. If you're already retired or plan to retire at 65, Medicare enrollment is a no-brainer: Sign up during the month you turn 65 or the three months before or after.
Where people get in trouble is when they, or a spouse, continue working past their 65th birthday. As long as you or your spouse works at a job with health benefits and there are 20 or more employees, you will probably get little or no benefit from being on Medicare. That's because Medicare pays secondarily to your employer's group plan.
But once you (or your spouse) stops working and you lose your insurance — even if you can continue with the employer plan through COBRA or some other retiree benefit — you must switch to Medicare as your primary insurance. You need to sign up within eight months after you stop working. If you don't and your private plan finds out, it can refuse to pay for your health care.
It gets worse. If you don't sign up for Medicare when you should, you'll be hit with a permanent 10 percent premium surcharge for every year you should have been on Medicare but were not.