So what now, for this benefits election season?
High deductibles for all...It stinks.
In 2008, this site reported, “High Deductible Health Insurance: Evolution of a Scam?” Among other things, that article discussed that high deductible health insurance began as an insurance company gimmick, a healthy/wealthy plan, for those who didn’t need health insurance because they were healthy or a way of “saving” some pre-tax dollars in the health savings accounts for the wealthy.
Eager to believe, we began Obamacare in 2010. Sure, we should have pressured the partisan nonsensical discussions to address the real issues that Obamacare was REALLY a way for payers, including government payers to save money, that’s where AFFORDABILITY came in. For those who became eligible for expanded Medicaid, Obamacare offered a distraction from what lay ahead for the rest of us.
This “benefits” election season, the articles are trickling down. On Sunday, November 14, 2015, for THE NEW YORK TIMES, Robert Pear, in his article, “Many Say High Deductibles Make Their Health Law Insurance All but Useless,” reports:
“…the sticker shock is coming not on the front end, when they purchase the plans, but on the back end when they get sick: sky-high deductibles that are leaving some newly insured feeling nearly as vulnerable as they were before they had coverage.”
Or Eric Pianin’s article, “Obamacare Enrollees Are Reeling from High Deductibles,” 11/16/2015, appearing in Yahoo Finance.
So what now, for this benefits election season?
Well, first, make a decision to purchase or not purchase a health insurance product. Obviously, advice is to purchase something, because no one would be irresponsible enough to advise having no health insurance with the prices charged to consumers for every service whether you’re sick or not.
While old-time numbers could justify rejecting the health insurance product if you were only purchasing it for the coverage of check-ups, which at one time were cheap enough that purchasing health insurance to cover a check-up was not a legitimate reason to purchase an insurance product designed to help pay for UNANTICIPATED costs, today, in part thanks to Obamacare guaranteeing payment for checkups have made these checkups big money for providers and merely getting a check-up can leave you on the hook for thousands of dollars. Sadly, Obamacare has helped make a check-up unaffordable without health insurance.
Second, Obamacare participants are STILL in better shape in terms of COSTS than those getting insurance from their employers for TWO reasons: Premium assistance is available to help pay for premiums and limits on what you can be charged include families. That’s not true for the rest of the nation.
In calculating what’s “affordable,” those who have employer health insurance can be charged up to 9.56 percent of household income for self-only health insurance the sky’s the limit when it comes to how much people can be charged to cover dependents. Not so with Obamacare which limits costs of health insurance for individuals and families to 8.05 percent of household income:
“For family members, coverage is affordable if the required contribution for the lowest-cost family coverage does not exceed 8 percent of household income, to be adjusted annually after 2014. - See more at: http://www.shrm.org/hrdisciplines/benefits/articles/pages/irs-affordability-percentage-2015.aspx#sthash.5R8j1HCj.dpuf .”
Third, CHOOSING BETWEEN PLANS:
Is there a limit on what we pay if we get sick? Not necessarily, because even once we reach our out-of-pocket maximums, under Obamacare ($6,850 for an individual and $13,700 for a family for 2016), where “…health insurance or plan starts to pay 100% for covered essential health benefits,” the “…limit does not have to count premiums, balance billing amounts for non-network providers and other out-of-network cost-sharing, or spending for non-essential health benefits.” (https://www.healthcare.gov/glossary/out-of-pocket-maximum-limit/).
So which plan to choose, SILVER (70 percent cost of essential health benefits) OR BRONZE (60 percent of cost of essential health benefits)?
For many of us, Obamacare incentivizes both the offering by employers (because it’s cheaper) and the acceptance by employees of the lowest type of qualified health plan, the BRONZE-type plan (60 percent coverage) for overall costs. WHY?
For those who DON’T have an Obamacare plan (purchased through an exchange), IF YOU HAVE NEEDED MEDICAL SERVICES during the year your TOTAL out of pocket costs before reaching the out of pocket maximum for the year will stay the same whether you choose a SILVER-type (70 percent) or a BRONZE-type (60 percent) plan.
This is, because whether you pay a higher deductible, higher copayments, or higher co-insurance under a 60 percent plan, (which likely you will), the out of pocket maximum that applies to a BRONZE-type PLAN AND A SILVER-type PLAN ARE THE SAME. As a matter of fact, if you end up unfortunately reaching the out of pocket maximum, you’ll likely have SAVED money because you’ll have paid lower premiums for a BRONZE-type plan.
IF YOU DON’T GET SICK AND SPEND THE OUT-OF-POCKET MAXIMUM, the Silver-type plan MIGHT be a good choice if you have the option to purchase it because you typically pay less out of pocket UP-FRONT as you use services for deductibles, copayments, coinsurance. But remember, you’ll have to carefully examine how much MORE you pay in premiums in order to achieve the anticipated savings from lower copayments, coinsurance and deductibles over the year assuming you don’t reach out-of-pocket maximums.
IF YOU ENROLL THROUGH AN EXCHANGE, YOU’RE CHOOSING METAL-NAMED PLANS and OBAMACARE INCENTIVIZES SILVER-LEVEL (70 percent) plans:
If you enroll through an exchange and don’t get sick enough to spend UP TO the out-of-pocket maximum how does Obamacare encourage the choice of SILVER?
Obamacare INCENTIVIZES consumers enrolling through exchanges to choose silver-level plans with money from the government in the form of premium assistance (available for ALL plans) and cost-sharing funds (available to some consumers but only IF THEY PURCHASE a silver plan or higher).
Even that was not enough to get people to ignore the obvious, that if you get sick your out-of-pocket maximum applies to both and therefore, there’s no substantive different between bronze and silver and many people opted into BRONZE plans as the Congressional Budget Office revealed: “…more people will forgo those subsidies by choosing to enroll in a bronze plan instead of a silver plan…” CBO, 1/15/15, page 13.
Remember, if you enroll through an exchange and you choose a BRONZE level insurance plan and you would be eligible for cost-sharing under Obamacare, you can’t get it with the bronze plan, only silver or higher. You CAN get premium assistance under ANY metal plan.
Healthcare.gov pushes the silver level plans based on the cost-sharing that MIGHT be available, https://www.healthcare.gov/lower-costs/save-on-out-of-pocket-costs/.
The INCREASED costs of BRONZE plans this year is estimated at about 11 percent versus a six percent increase in SILVER plans. While premium assistance will address the premium cost issue for many, the increase is another effort to get people who use exchanges to enroll in silver over bronze plans. Obviously, as premiums get closer for bronze and silver plans, more people will choose silver with its typically lower up-front consumer cash costs in the form of deductibles, copayments, coinsurance.
The MAJOR difference for all consumers who purchase health insurance in case they get sick, the choice between silver-type (70 percent) and bronze-type (60 percent plans) is the WHEN rather than HOW MUCH they’re paying their OUT-OF-POCKET costs for essential health benefits.
Under the bronze-type, consumers pay more up-front in order to reach higher deductibles, paying more money in copayments and a higher percentage of costs for other services, which means they’ll reach their OUT OF POCKET MAXIMUM likely faster than those with SILVER PLANS.
IF YOU DON’T THANKFULLY GET SICK ENOUGH TO REACH YOUR OUT OF POCKET MAXIMUM then you still must calculate the likely increased costs of deductibles which are often higher, copayments which are typically a few bucks more and coinsurance that might be five percent higher for certain services against the increased premium you’ll pay for 70 percent coverage (if it’s available).
For those using the exchange for an Obamacare plan, though premiums might be higher, silver plans are closer to bronze plan premiums this year with the 11 percent increase in bronze versus the 6 percent increase in silver AND with the premium assistance available (and in some instances cost-sharing), the silver plan might make more sense for your family.
