Most people have some uncertainty on their health care costs for the next year. One plan might have higher premiums but lower total costs over the expected range of outcomes. Another plan with lower premiums will have more costs loaded into the deductible so if total medical charges for the year are in a narrow range, Plan A is better than Plan B but if the costs go above a threshold, Plan B is better. This is complex.
Some people have a simpler decision process. They know that they will hit any and all out of pocket limits. The only question is whether or not they hit the maximum in January or March. The optimization problem is a straightforward minimization of the sum of unsubsidized premium plus the maximum out of pocket limit. It can be further constrained by network but I don’t have that data and this is an individual judgement as to what a satisfactory network looks like.
I took the four ages (21, 30, 40, 50) from the 2018 Healthcare.gov Public Use Files and found the least expensive plan when annual unsubsidized premium is added to the out of pocket maximum. I then identified what plan and metal level that is the least expensive maxed-out plan by age. The metal band will vary by age and county.
Go play around with the file. Switch ages as you focus on a county. Look and see how much costs change as you change the ages.
There are limitations. I am not looking at Age 60 or Age 64 as a matter of simplicity. The Public Use File did not have a pre-calculated premium field for me. I am also looking only at single individuals who are not tobacco users. I am not considering subsidies, this also means I am ignoring CSR. This analysis is useful only for people who do not anticipate receiving pragmatically meaningful advanced premium tax credits.
I am not considering networks. That is probably the biggest omission. A dirt cheap narrow network that excludes the regional academic medical center that specializes in treating Rare Disease X is useless to someone who has Rare Disease X.
The big take-away in my mind is that Bronze is not useless for people with significant conditions that guarantee that they’ll blow through their out of pocket maximums. The specific details within a county will matter regarding plan selection and total costs but Bronze should be examined as a plausible option for high need individuals.
PST
Off topic, sorry, but the Times says it’s Manafort.
dr. luba
I switched from silver to bronze last year–I knew I was having major surgery (early kidney cancer) and would max out the OOP. The nifty calculator on the Marketplace website told me I would save 4K if I went with the bronze, so I did.
This year who knows? I’ve been afraid to look. My insurer dropped out of the Marketplace because of 45’s destabilization of insurance markets. MRIs are expensive, though, and I’ll need to get one annually for the next few years…..
David Anderson
@dr. luba: If you are on Healthcare.gov look at the county map above and it will give you the cheapest plan assuming that no matter what you will max out your out of pocket expenses.
Otherwise, go talk with a broker/agent/navigator
Bill Arnold
Bronze will get you negotiated prices, right? V.s. bankruptcy (aka “list”) prices?
I’m recalling stories like this, about bronze being helpful.
https://boss.blogs.nytimes.com/2014/12/01/its-not-all-about-the-premiums/
David Anderson
@Bill Arnold: Yes, Bronze gets you negoatiated prices.
The basic trade-off on Bronze is lower premiums and higher % of costs for low to mid-dollar claims.
No annual or lifetime cap on benefits, your out of pocket costs are capped etc.