Skip Automatic Renewals: Shop Around for a Better Deal

If you already have coverage from the Health Insurance Marketplace, you may be tempted to automatically renew your policy for 2016. But if you automatically renew, you could end up paying more for your health insurance plan and getting a smaller premium tax credit than expected.

A study from Kaiser Health Foundation found that people were “very likely” to save if they shopped around and compared plans. Consider these factors when shopping:

Check the plan. Health insurance plans and prices change every year, so you can’t assume you’re getting the same coverage at the same price just because you automatically renew your plan. Make sure you’re getting the same benefits, network of healthcare providers and drug formulary at the same price.

Reassess your health care needs. Last year’s plan may not be the best choice for 2016. Did you develop a chronic medical condition that requires multiple doctor visits and pricey medications? Are you thinking of having a baby? Do you have a child with special needs? Make sure the plan covers your specific needs.

Calculate the premium tax credit. Although you can purchase a health insurance plan from any of the tiers on the Health Insurance Marketplace, premium tax credits are tied to the cost of the second least expensive plan in the “silver” tier. The cost of this silver plan varies from year to year, so you can’t assume that you’ll get the same premium tax credit in 2016 that you did the previous year.