When discussing the prospect of buying a health insurance plan, price is typically the star of the conversation. Few people believe health insurance is affordable, especially those who purchase their own health insurance and bear the burden of paying 100% of the cost themselves.
What isn’t discussed as often is health insurance medical deductibles. Most insured individuals understand they have to pay something to their medical provider when they receive care, whether in the form of a copay or the full extent of the cost, but do they realize how much their financial output has steeply risen in the last five years?
In a recent Kaiser Family Foundation study, it was determined that medical deductibles have risen 67% since 2010, while wages have only risen an average of 10% over five years. In monetary terms, an individual making $50,000 in 2010 would need to be making $83,500 today in order to equal the surge in health insurance deductible increases. That’s quite a raise.
“We have seen plan designs drastically change over the past five years. It used to be that you paid copays for everything and there were no deductibles in-network. We have now seen a shift to cost sharing plans that have copays for doctors, and then a deductible for major medical,” said Susan Combs, an insurance broker in New York.
“We have also seen consumers becoming more educated for the first time and understand how their coverages work. For example, if someone just uses their insurance for preventive care, we have seen them choose to go with plans with a high deductible because they want to get the cost down and are willing to roll the dice, so to speak,” said Combs.
For those who are healthy and use minimum services, a high deductible healthcare plan can be an affordable option. However, rolling the dice isn’t always an option for individuals with moderate to chronic medical conditions that require multiple medical visits. A more expensive health insurance plan with a lower deductible that pays for a greater amount of medical services can be a better option for this moderate to chronic group, but the monthly cost can be prohibitive for those on fixed budgets. So while the world of uninsured has shrunk with the Affordable Care Act, the number of underinsured has risen.
According to the Robert Wood Johnson Foundation, 79% of the uninsured said cost was the primary reason they have not enrolled in a plan. Of those who said they remained uninsured due to costs, the top three reasons individuals did not enroll in a plan was – no surprise – 1) monthly cost; 2) out-of-pocket costs; and 3) medical deductible.
Combs puts the math in front of her clients so they “understand the pain point.”
“We tell our clients to look at two numbers: 1) The annual cost of their [health insurance] premium and 2) The maximum out-of-pocket. By knowing these numbers, consumers can understand if they are in the “best case scenario,” where they just use their insurance for no charge preventative care, and also the “worst case scenario” if they were to pay their premium AND blitz through all the services to hit that maximum out-of-pocket before 100% is picked up by insurance,” said Combs.
Based on those two numbers Combs tells her clients to look at, let’s put together an illustrative example. In the state of Texas, a family of four can have the following maximum out-of-pocket costs on average during a plan year:
$8,964 per year health insurance cost
$12,869 maximum out-of-pocket cost
$11,220 per year health insurance cost
$12,214 maximum out-of-pocket cost
$13,512 per year health insurance cost
$10,640 maximum out-of-pocket cost
$14,196 per year health insurance cost
$3,000 maximum out-of-pocket cost
So do you roll the dice with a Bronze plan because you are healthy, or do you opt for a richer health insurance plan to insure you have coverage for life’s bumps and bruises? For those with a chronic illness, Gold and Platinum plans can help save money if costs are ongoing. In either situation, it’s vital to advocate for yourself to keep costs at the minimum price. Negotiate your bill with your medical provider, take maximum advantage of your health savings account, use a doctor through video consultation rather than visiting urgent care, and remember to check for a subsidy to receive cost assistance to help lower your monthly health insurance rate. By making a few small changes, the savings can add up.
NOTE: The views expressed here are those of the author and do not necessarily represent or reflect the views of Healthcare, Inc. and HealthCare.com.