The ACA open enrollment period for almost everyone will be ending in the next week. After this Sunday, anyone who is looking for individual market insurance will need a special enrollment period. So get enrolled. And be ready to think about zero premium plans(**). Zero premium plans are common and they prompt a need to figure out what the relevant comparison is for decision making and prioritization.
Interesting that a plan with $6,000+ or $12,000+ up-front deductible, in almost all cases, is considered “acceptable” insurance. It’s not insurance, it’s nothing short of major medical emergency coverage for the average person. These plans ‘deter’ care!
— Antonio Paulo Pinto (@appinto17) December 10, 2019
The critical question from an analytical point of view is compared to what?
One way to look at this is that zero premium Bronze plan with a $6,000 to $7,900 deductible and maximum out of pocket limit is vastly superior to the alternative of a zero premium plan with an infinite deductible, higher cost per unit of service and no potential pre-deductible services. In that case, Bronze is great.
The other way to look at a zero premium Bronze plan is that it has a $6,000 to $7,900 deductible and out of pocket costs while Silver and Gold plans may have monthly premiums but potentially far lower out of pocket costs. Spending $0 on premiums for a Bronze plan or $12/month for a CSR-94 plan with a $600 deductible changes the analysis. Bronze is, most likely really bad.
There is a middle case of a zero premium bronze plan and a $150-$200 month Silver 73 or low Gold plan with a $3,000 deductible. In those scenarios, for people with bottom 60% health expenditures, it is very unlikely that they will incur enough claims where the cost sharing differences matter much less where the cost sharing is different enough to make up for the extra premiums that were used to buy lower cost-sharing.
Everyone who is likely to be subsidy eligible, go look. Zero premium plans are widely available and provide at least hit by a meteor protection.
** DISCLOSURE: I have a zero premium paper coming in the near future. My co-author and I also just got funding to do even more wicked awesome stuff in this domain.
debbie
Thanks for this information. I’ve begun my research so I can be ready when the time comes, and your posts will be making it so much easier.
wvng
At the end of the day, the reason most people really need health insurance is for major medical expenses, which ACA compliant plans handle really well. Unless you have a chronic condition, most people will be able to figure out how to pay that $3000 deductible for a medical issue that occurs once a decade (or less), even if they fall in the category of 50% of households with less than $500 in savings (which is another really serious problem).
For people with chronic care needs, it is entirely different. David, wth can people in that category do?
Sab
@wvng: I agree. One of the benefits of insurance is you get charged the negotiated price, not the insanely high prices of the uninsured.
wvng
@Sab: the ACA allowed us to transition from terrible catastrophic insurance that was all we could afford after my wife retired from teaching into excellent coverage on a Silver Plan. It paid most of the costs for her appendectomy, after the deductible that was not a problem for us.
I am still amazed at how easy enrollment was, how liberating that the ONLY health question on the application was about smoking.
Bnad
One thing I learned the hard way about high deductible plans is that most doctors can see that you have a high deductible plan and don’t give you their negotiated rates, or they ask you whether you’ve gotten up to the deductible yet, and if you answer “no”, they charge you their cash walk-in rate which is usually kind of ridiculously high.
If you lie and say “yes,” I don’t think they have a way of finding out though.
daveNYC
@wvng: I think you’re underselling the difficulty people might find themselves in if they have to burn their savings and take on a couple grand of debt out of nowhere to cover a health issue.
wvng
@daveNYC: I’m really not trying to. It’s a matter of balance between having to occasionally pay a large deductible versus constantly paying a higher premium. Insurance has to pay for care,the premium/deductible mix for any given company must cover the company’s costs.
David Anderson
@Bnad: The charge cash price to individuals with an insurance policy that the doctor is in-network for thing violates the contracts that the doctors signed with the insurers.
Pre-charging the deductible/estimated cost sharing does not violate regular contracts (I’m sure there are counter-examples somewhere) but charging cash price does not jive
Also note that many of these high deductible plans are offered by insurers that offer low deductible plans for higher premiums, so the networks are going to be the same.
WaterGirl
@Sab: OT, but one of your comments last night went into spam. I let it out but it was nearly identical to the comment you made either right before that one or right after it, so I deleted one of them right after I released it. Why it would have gone into spam was not immediately apparent.
Stan Dorn
One other factor: a high deductible can deter use of necessary care. It’s not just the economic analysis of picking the plan that leaves you farthest ahead financially, assuming fixed utilization.
scribbler
@wvng: The ACA is life saving, but it’s also a high hill to climb every year. We do a lot of research every year into what’s available, but still have to pay a large premium and have a high deductible.
Roger Moore
The other thing that he’s leaving out is that even those high deductible bronze plans are supposed to have free preventive care, which is likely to be a big deal to people who have been skipping even an annual checkup because they can’t afford it. It’s weird that we have plans that cover regular checkups and catastrophic care but hardly anything in between, but that’s what we have.
G McD
It’s great that there are options for $0 premium plans for folks who generally don’t need to utilize care. But a $6000 deductible makes that coverage moot. Most families struggle to pay for a $400 out of pocket cost, let alone needing to pay $6000 in costs before coverage kicks in. The follow on to that is what does that coverage look like? How much of the care does your insurer cover after the deductible?
The system as currently constructed leaves far too many people susceptible to being raked over the coals and bled dry because they got sick. Tackling rising premiums is a worthy cause, and Obamacare has done a really good job at that. But the insurer still has to make their money somewhere. So they’re raising deductibles to the point where they don’t have to pay for care until the patient has depleted their savings. So while upfront costs being down appears to be good, you’re getting whacked on the backend when you try to actually access care, which is the whole idea of health insurance in the first place. It’s a lose-lose proposition for the consumer, and the only winners are the insurers in this.
TomatoQueen
Open season for federal employees was over on Monday. I keep thinking ptui on this Aetna for feds plan I’ve got, but then I kick myself mentally…it has no deductible. All the other plans have deductibles in the thousands. Now if they’d reduce the premium a little…
Fair Economist
Health insurance has an enormous benefit even if you never hit your deductible because it forces health providers to give you fairer prices. You pay three times as much for the same care if you’re not insured.
Kelly
2020 will be our third year on a high deductible Kaiser Bronze HSA plan. This year the monthly payment will be a little greater than zero at $6.49 and the deductible will be $6900 each $13,800 family. The deductible is also the out of pocket limit. This has worked well for us because it moves our health care expense to tax exempt HSAs. This reduces our MAGI and keeps us from crossing the 400% of poverty subsidy cliff. Monthly payment plus deductible expense has been lower the past two years than it would have been with a Silver or Gold plan.
darms
I see a $200 ($900) /month bronze plan & an even more expensive silver plan – where is this zero-premium bronze plan of which you speak? (rural OR)
Kelly
@darms: The plan I described above is for Marion County, Oregon.
Raoul
I’m sure this varies from place to place, but my high deductible story is: abt 12 years ago I needed an urgent CT scan (it diagnosed pancreatitis). The ‘walk in’/uninsured price was something like $5,000. My provider’s negotiated price was $600. I paid the whole six hundred as I was far from exhausting my deductible. But coughing up 6 c-notes (or, really, a credit card 30 days after service provision) was much easier than having a bill collector going after me for the four+ grand difference for who knows how long.
I feel like the benefit of negotiated provider pricing is under appreciated. Yes, high deductible plans are a problem. We really should have much better healthcare coverage in this country. Other nations do far better. But for now, as a backstop, a premium-free Bronze plan is better than nothing. Of course.
darms
Kelly, I am in Florence. I’m also 63. Is that the difference?
David Anderson
for a single 63 year old in Florence earning $48,000/year (395% FPL) I am seeing a $78 Bronze plan.
It is from BridgeSpan
https://www.healthsherpa.com/marketplace/recommended?apply_for_subsidy=true&confirmation_id=&fip_code=41039&is_agent=false&locale=en&zip_code=97439&state=OR&applicants%5B%5D%5Brelationship%5D=primary&applicants%5B%5D%5Bage%5D=63&applicants%5B%5D%5Bgender%5D=male&dependents_count=1&household_size=1&is_default_scenario=true&utilization=low&custom_usage%5Bspecialist_visits%5D=0&custom_usage%5Bhospital_visits%5D=0&custom_usage%5Ber_visits%5D=0&custom_usage%5Bprescriptions%5D=0&custom_usage%5Bdoctor_visits%5D=0&custom_usage%5Blabs%5D=0&year=2020&subsidy=675.35&sort=premium_asc&page=1&per_page=10&all_benefits=true&add_attributes=true&shopping_scenario=finding_plan&health_subsidy_used=0&dental_search=false&v2=true&dental_params%5Bpremium%5D=&dental_params%5Bdeductible%5D=&dental_params%5Bpage%5D=1&dental_params%5Bper_page%5D=10&health_params%5Bsort%5D=premium_asc&health_params%5Bpremium%5D=&health_params%5Bdeductible%5D=&health_params%5Bpage%5D=1&health_params%5Bper_page%5D=10&show_dental=&household_income=48000&fpl_ratio=3.84&csr_type=none
Kelly
@darms: According to the Kaiser website they do not cover folks in Florence.
darms
Cheapest on healthcare.gov right now is Moda -$137.00 Including a $661.00 tax credit (Was $798.00), 2nd is BridgeSpan – $205.02 Including a $661.00 tax credit (Was $866.02), both are $8K deductible. Ouch. Catastrophic coverage at real insurance rates. Thoughts? (& thanks for the help)
ProfDamatu
I just signed up last week, after running the numbers. The good news is that the insurers in my area have finally committed enough to Silver loading that it’s financially feasible for me to get a Gold plan – this year, I’m on a Bronze plan with a $5600 deductible, which was the lowest deductible available in my market outside of the few Gold plans (which had premiums that were something like 2-3x as much as the Bronze premium post-subsidy).
Unless I get hit by another meteor, my projected surveillance test and office visit costs are around $6500-$7000 for next year (allowed amounts). I used that information, plus the premium, deductible, coinsurance rate, and OOP max details of all the plans available that cover all of my doctors to figure out which plan would cost me the least (premiums plus cost-sharing). Turns out that unless I hit something like $20k in allowed charges, the Gold plan is the best deal, again thanks to Silver loading that’s significant enough to bring that premium below $400/mo. Assuming everything goes as planned, I’ll be saving about $3000 on health expenses. The bad news is…that will still be over 18% of my *gross* income. And there’s no real prospect of that changing anytime soon.
And a couple more things about this whole process: First, I have to wonder how many people in my shoes have the information and knowledge needed to do these calculations. Second, there are so many things to take into account – networks, plan characteristics, pulling together all of your health expense records for the year and projecting next year – that we’re talking many hours of work. To be totally honest, although I’m grateful for the coverage (without the ACA, I would be uninsurable), I do resent being given a huge assignment, that has to be completed at one of the busiest times of the year, just to avoid getting a bad deal.
Kelly
@darms: Try to estimate your monthly payments + deductible. At the Healthsherpa link David provided it’s “your estimated all in”. Healthcare.gov has something similar where you rank yourself as a low, medium or high utilization. I’m a very health 63 year old and only utilize the no charge stuff so I rank my self low. My wife has a bit more going on we pay for so we rank her a medium. This gives us an estimate of the total annual cost and that’s what we care about. Leftover HSA money rolls into the next year and our balance will exceed our deductible this year. HSA money is pre-tax so depending on your effective state and federal tax rate you’re paying medical bills at a discount.
darms
Kelly, I’ll never make the deductible. I’m in good health & my income is low enough that OR covers my deductibles, it’s the meds & the premium reconciliation that I’m on the hook for, fortunately my income (SS) is stable so maybe the premium reconciliation won’t be so painful this time. I just hate paying real premiums ($900/month) for catastrophic care insurance. For what I’m getting I am paying way too much. (wife is on Medicare, a much better deal as she is high-usage)
Kelly
@darms: There’s a glitch where if one spouse is on Obamacare and the other isn’t the subsidy is something like 1/3 of the couple subsidy instead of 1/2 like I’d expect. Your description of your income suggests you may want a Silver plan to get the additional deductible subsidy. I believe Healthcare.gov will include that into total annual cost estimate I described above.
darms
Kelly, cheapest silver is Moda (again) $374.00 Including a $661.00 tax credit (Was $1,035.00) meaning $4488 for premiums alone. Ouch! & that’s still a $3550 deductible. I’ll go w/the cheaper bronze I guess but I’d like to lose the confusion about low-cost bronze plans as for me there aren’t any.
ProfDamatu
@darms: The very low-cost or free Bronze plans only show up in areas with aggressive Silver loading (i.e., the premium for the second Silver is so high that the subsidy has a decent chance of being greater than the Bronze premium). It also has to do with your age – basically, the older you are, the more likely you are to encounter zero-premium Bronze plans, for a given income level. This is because, no matter how old you are, if you make, say, $35,000 per year, your premium can be no higher than 9.65% (I think…it may be a slightly lower percentage) of your income. BUT, as you age, the age-based multiplier rises – by the time you hit 50, insurers may be charging you close to double the base rate…so, all else equal, your subsidy will be getting bigger and bigger for a given income level.
To take an example – I’m in my mid-40s, and the cheapest Bronze premium for me would be about $178/mo next year, post-subsidy. HOWEVER, the multiplier due to age means that I pay “only” about 35-40% more than the base rate. Someone in my area, making the same income as I make, but a decade older than me would almost certainly be seeing some zero-premium Bronze plans, because they’d be getting close to paying double the base rate, which would increase their subsidy.
darms
ProfDamatu,
I’m confused, as always. My income is SS which is $15K/y yet I see no low cost or free bronze plans. (I’m talking total premium, not just my share) Was paying $900/month for COBRA for self & spouse, that was low-deductible insurance that paid for everything. Now I’m supposed to pay $170 + a subsidy of $660/month (which I am potentially liable for if my income changes) for insurance that pays for nothing? Would make much more sense to have cheap catastrophic insurance & pay everything else out of pocket…
David Anderson
@darms: Check your e-mail ASAP
Kelly
@darms: Have a look at this
https://www.oregon.gov/oha/HSD/OHP/Pages/Apply.aspx
ProfDamatu
@darms: Yeah, something is wrong there; $170/mo would be over 13% of your stated income, which is way, way out of the percentage bands.
As for the lack of zero-premium Bronzes, I can only guess that there’s not that much Silver loading? But again, that premium is way out of line with your income. Hopefully David has some better insight to offer!
darms
@Kelly: Thanks, our SS income is too high. (OHP max is $1945/month for two)