If you read my last blog, you know that the enrollment deadline for the healthcare marketplace is just ONE WEEK AWAY, March 31st to be exact. The Affordable Care Act (ACA) and its promises for higher quality health care with more affordable rates is dependent on Americans enrolling in the marketplace. Not only will enrolling in the marketplace help ensure the successful future of the ACA, buying health insurance will give many women and families the chance to feel secure with their health status for the first time. As easy as it is to say “enroll in the marketplace now!” and try to get people to enroll, many people may still be confused about which plans are the best for their lifestyle. Sure, you can read an article and retain the fact that there are plans with lower premiums and higher deductibles and vice versa…but what does this really mean for you? You might read some information sheets and think ‘but what does this plan actually mean in everyday language?’ If you have a good understanding of what the fundamental healthcare terms are, you can empower yourself to be able to make an independent decision about which plan is going to fit your lifestyle the best.
Where is my money going?
Premium: The money you pay the insurance company to buy your specific plan. This is usually a monthly payment you make to the insurance company.
Deductible: The amount you pay for health care services before your insurance starts to kick in. For example, if your deductible is $500, you must pay the first $500 of the health service fees and after that your insurance will pay. This may be only for certain plans or certain services, you should check the provisions of your plan so you know.
Copayment (or ‘copay’): The amount you pay for a specific service paid usually when you receive the service. Remember, with the ACA many services no longer require a copay.
Co-insurance: When you pay a percentage of a specific service provided. For example, you may have a 20% co-insurance rate in which you pay for 20% of that health care service and the insurance company pays the other 80%.
Out of Pocket Maximum: This is the most you will pay for out of pocket expenses (deductibles, copays, and co-insurance) during a policy period or one year. For 2014, the highest out of pocket maximum is $6,350 for an individual. This number can vary based on your health plan and after this maximum is reached, insurance companies will pay 100% of the rest of your covered essential health benefits.
What types of plans are there?
There are four main categories of general health insurance plans with the fundamental differences being in how much of costs are covered by insurance and how much are out-of-pocket. Each of the four plans contains all the essential health benefits required by the ACA but some contain additional benefits depending on the employer:
1. Platinum Health Plan: Has the highest premiums but is designed to offer the lowest out-of-pocket expenses. The insurance company will pay for 90% of your health insurance costs and you will only pay the remaining 10%.
- Annual out-of-pocket limit for an individual: $1,855
- Average deductible for an individual: $347
- Monthly average premium for a 30 year old individual: $345
2. Gold Health Plan: The plan that offers the second lowest out-of-pocket charges. Gold plans are required to cover 80% of medical costs while the consumer covers the remaining 20%.
- Annual out-of-pocket limit for an individual: $4,081
- Average deductible for an individual: $1,277
- Monthly average premium for a 30 year old individual: $336
3. Silver Health Plan: 70% of costs are covered by insurance and the remaining 30% are covered by the individual.
- Annual out-of-pocket limit: $5,960
- Average deductible for an individual: $2,907
- Monthly average premium for a 30 year old individual: $284
4. Bronze Health Plan: Has the lowest premiums of the four categories but the highest out of pocket payments. 60% of costs will be paid by insurance and 40% by the consumer.
- Annual out-of-pocket limit: $6,350
- Average deductible for an individual: $5,081
- Monthly average premium for a 30 year old individual: $263
There is also another plan option available for people under the age of 30 called a Catastrophic Plan. This plan covers three annual primary care visits and preventative health care. It also covers the essential health benefits but has a very high deductible. This plan is for individuals who are in financially unstable positions that do not have an option for affordable coverage. These individuals may get a “hardship exemption” under circumstances such as homelessness, domestic violence, filed for bankruptcy in the past 6 months, or others.
As you can see, there are a lot of options for every type of individual and these descriptions are just the beginning of diving into what each health insurance plan truly means. If you are young and don’t feel you are at risk of becoming seriously ill, choose a plan with a lower premium so you can pay less each month and you may not have to reach your out of pocket limit. If you are worried you may become seriously ill, choose a plan with a higher premium so that you can be covered in the event of a serious health issue. There are many plans out there and with the ACA, they are all on their way to becoming higher quality care that each and every American deserves.
Bottom line: you really never know when you are going to get sick and you may need insurance. So look at the insurance plans you can afford and enroll now because you still have another week! Go to https://www.healthcare.gov/ and get yourself and your family insured today!
Another tool you may want to use is this handy comparison tool from HealthPocket to compare and contrast different health insurance plans and their premiums/deductibles/etc. in your area: http://www.healthpocket.com/individual-health-insurance/
Some more tools you can use to research insurance: