Welcome back, friends. In this latest exploration of Open Enrollment for 2019, we thought we’d take a deeper dive in to the types of plans available in the marketplace and the natural sidekick of that - the costs associated with health insurance.
There is no doubt that health insurance is too expensive. It’s important to know, though, that 87% of people who used the federal marketplace for their 2018 plans qualified for reduced costs. While it can be a pain, take the time to figure out if you qualify for tax credits or cost-sharing reductions. It could save you hundreds of dollars per month.
You can find out if you qualify for either premium tax credits or take part in cost-sharing reduction here.
We’ll get into the details about the cost saving measures at the end of the article, but before we do, it’s important to talk about the types of plans you’ll see when you get in to the marketplace. Let’s get started by talking about the types of things you pay for when you get health insurance.
What are all these things I’m paying for?
Most people have a pretty good sense of the big things health insurance can do for them: covering huge expenses for major surgery, a child’s birth, or cancer treatment. When it gets down to it though, most of us only have a general idea of what co-pays, co-insurance, deductibles, and out-of-pocket costs actually mean. Time to break it down.
This is the amount of money you pay each month in order to maintain your coverage. You pay the same amount every month, regardless of whether or not you receive medical care.
This is the amount of money you are required to pay before your insurance starts to pay. Once you reach your deductible, your plan can cover various types of medical care differently — some may be paid for 100%, and others may still require you to pay with co-insurance.
This is the fixed percent cost for your share of most health care services after you’ve reached your deductible. If your deductible is $5,000 and your co-insurance is 25%, this means that once you’ve paid the $5,000 for your medical care, if you received an additional $1,000 in care, you would pay $250 more as your share.
This is the fixed dollar amount you pay for specific medical services. Often, the amount of the copay varies by type of service. For example, you may pay a $15 copay for a doctor’s visit and $250 copay for a trip to the emergency room.
This is the total amount you’ll be required to pay before your insurance will cover 100% of costs. Some things aren’t included (like your premiums or elective surgery), but for most plans, things like your co-insurance, copays, and deductible can count towards your out-of-pocket maximum. For 2019, out-of-pocket maximums for individuals is $7,900 and for families is $15,800 for the year.
What sorts of plans are available?
The marketplace requires that all plans be grouped in to a “metallic” category. All plans are considered either bronze, silver, gold, or platinum.
What’s the metallic designation mean?
The designation that a plan receives by metal is related to how much of the actuarial value will be paid for by the insurance plans. There’s a lot of math that goes in to identifying what the actuarial value is, but the key outcome for most people to be aware of is just that the “higher” designation of plans means you will pay higher monthly premiums, but that your insurance will cover a higher percentage of costs at the time of care.
On average, a bronze plan will have the lowest monthly premiums (sounds great, right!?), but be aware that means the plan will cover less of the total costs.
Across all plans, bronze plans cover 60% of medical expenses (which means you’ll be responsible for 40%). Silver plans cover 70%, gold plans cover 80%, and platinum plans that have the highest monthly premiums will cover 90% of medical expenses.
What coverage is included?
For all plans that fall within marketplace plans supported by the Affordable Care Act (ACA), there are ten things that will always be included as an Essential Health Benefit: addiction treatment, ambulance services, newborn care, chronic disease care, emergency services, hospitalization, maternity care, laboratory services, occupational therapy, prescription drugs, preventative services, and speech language therapy.
You may still be required to pay for these services with a copay, coinsurance, or a deductible, but these services will be recognized by any bronze, silver, gold, or platinum plan.
What is catastrophic care?
For people under 30, or those who qualify for a hardship exemption, a catastrophic plan is a high-deductible plan that covers pretty much just worst case scenario medical emergencies that would cost thousands of dollars.
These plans often have lower monthly premiums, but be aware that almost all of your medical costs under a catastrophic plan must be paid out of pocket.
How do I know what I should pick?
This is a really tough question. Making a decision that costs this much and has such an impact on your family is important. It’s worth taking some time to read some of the articles on healthcare.gov to understand all of the ins and outs of your plan.
Your health and financial situation should both be considered carefully before deciding what type of plan may be right for you. If you expect the next year will have lots of doctor visits and prescription drugs, a gold or platinum plan may be best, since a higher percentage of the overall costs will be covered.
If you are healthy and don’t expect to need much medical care in the next year, you may be better suited by a bronze or silver plan. Keep in mind, though, that knowing how healthy you’ll be in the future is impossible, so be sure you’ve thought about your tolerance for risk if the unexpected were to occur.
What can I do to save money on the plan I choose?
Great question. The government offers two types of support, as we mentioned at the beginning of the article. You should know that neither of these types of support are automatic, and you must apply through the marketplace to receive them.
Advanced Premium Tax Credits (Premium Subsidies)
The government has issued subsidies to help make it easier to afford insurance in the marketplace. If you earn less than four times the federal poverty level, there is a sliding scale of relief that can help cut the costs of your insurance. Here’s the link again to find out if you qualify. Premium subsidies can be applied to any “metal” plan in the marketplace.
Cost-Sharing Reduction (CSR)
The CSR is designed to minimize the portion of a claim that you will have to pay. If you earn less than 2.5x the federal poverty level, you could qualify for a CSR. What’s really important though, is that CSR only apply to Silver plans. If you want to take advantage, check out this same link again to see if you qualify.
Whew. That was a lot.
Yes, navigating the marketplace can be tough. But we’re here to help make it easier to understand. And thanks to our new Health Explorer, you can check out which plans are available to you for Open Enrollment by going to health.try.catch.co.
Don’t forget to see if you qualify and apply for subsidies, and be sure to sign up for your plan for 2019 by DECEMBER 15!