Updated: Mar 24, 2020
Yes: But it sucks unless you really need it
So, regardless of your politics…most agree having insurance and the access to needed care that comes with it shouldn’t only be for those with good jobs and money. In our last piece, we answered the question of whether having insurance is still worth it…and the answer was clearly yes…if you have a good job.
But, what about the folks who are either self-employed or don’t have the best jobs and get their insurance through what has come to be known as ObamaCare? Well, that gets a bit more complicated.
Let’s start with this…if you don't have access to healthcare insurance…you should try to get it. The premiums you pay, the total out-of-pocket costs you incur and the type of coverage you select are levers you can play with to make it work for you. But, if something goes terribly wrong…you’ll be happy you have coverage for you and your family. Now with that public service announcement on the record…ObamaCare is not the best insurance. When we think of “good insurance” it starts and stops with a simple question: “How much do I have to pay when I need care?” It’s not about which doctors are in the network, most of us only care about our primary care doctor…after that we don’t really know which specialists are better or think much about which hospitals we can and can’t go to. We don’t need a fancy website from the insurance company or want a lot of hard to understand mail and correspondence. “How much do I have to pay when I need care?” That’s it…simple…”So, How much?”
This is where the complicated part comes in…but it’s really not that complicated…if you keep this question in mind…”How much?” The Accountable Care Act (ACA), passed in 2010, set the maximum amount anyone can pay out-of-pocket…after that, the insurance company is required by law to pick up the rest. Well, most insurance companies that offer insurance plans on either www.healthcare.gov or one of the state-run websites, have set the deductibles on their ObamaCare plans at…you guessed it…the legal out-of-pocket limits. So, it’s pretty easy to answer “How much” when it comes to ObamaCare, right? Problem is this legal limit keeps going up…check out the table below.
Now, it’s important for you to know what counts in this “out-of-pocket maximum.” Funny how when it comes to insurance…words that normally mean one thing, magically mean something else. The out-of-pocket limit doesn't include:
· Your monthly premiums
· Anything you spend for services your insurance plan doesn't cover
· Out-of-network care and services
· Costs above the allowed amount for a service that a provider may charge
So…let me understand…all of these costs, including the premiums, are not considered out-of-pocket?
Ok. Lesson learned is, in addition to the premiums…you should focus on the deductibles. The different types of ObamaCare plans, called metallic levels, offer different premium and deductible combinations. Bronze, lowest premium/highest deductible; Platinum, highest premium/lowest deductible…Silver in the middle. Little talked about ObamaCare Catastrophe Plans only cover you if something serious happens and don’t normally have deductibles (more to come on this). Remember…all the metallic plans set either the deductible or the combination of the deductible and the other costs that actually count as out-of-pocket costs (co-pays and co-insurance) at the legal out-of-pocket limit.
So, if you get really sick and go into the hospital for something serious…you’ll quickly meet the deductible The good news is that this is when an ObamaCare plan has true value, because it caps the amount you will have to pay. However, most people don’t get really sick or need expensive procedures. This is when an ObamaCare plan’s value is in question…and effectively managing your deductible is key. For most folks on ObamaCare, you basically have a Catastrophe Plan and you’re Cash Pay for most everything else. If you’re well within your deductible and you’re essentially Cash Pay, it is important for you to shop for best price on any services you may need. Afterall, it’s your money…not the insurance company’s money until you meet the deductible which in 2020 is $16k dollars. The same procedure can cost hundreds or even thousands of dollars more if you get it done at a hospital versus at an independent provider’s office or out-patient facility. Shopping for services isn’t easy in healthcare…maybe that’s by design…but things are changing.