During its long stint on television, The Tonight Show Starring Johnny Carson, featured a skit where Johnny dressed as, “Carnac the Magnificent,” a mind reading magician, and answered a question contained in a sealed envelope. “I shall divine the answer to this question.” The skit, while hilarious, is the perfect example of how healthcare consumers are expected to select an insurance plan for the following year. Stick an insurance policy on your forehead and see if you can determine how much medical care you will need in the next 12 months. It’s not very easy.
Reminder: You Must Buy a Health Insurance Plan By December 15 to Have Coverage on January 1!
When analyzing a health insurance plan, there are many elements to take into consideration: monthly price, the deductible you have to pay out-of-pocket, the percentage of coinsurance you are responsible for once you’ve met your deductible, and any copayments. But not every plan is right for individuals, couples or families. Let’s look at how the most popular plan, a Silver level plan, fares for each group in the city of Miami, Florida with similar benefits but varying deductibles.
$392 per month, $6,100 deductible
Chris, an independent web developer, buys a Silver plan because he’s healthy, and is watching his monthly budget. During the year Chris begins to experience a racing heart at various times throughout the day. He sees his primary care physician and is referred to a cardiologist for further examination. After wearing a heart monitor to capture the episodes, the cardiologist diagnoses Chris with atrial fibrillation, and prescribes him a prescription drug to take daily. Chris follows up with the specialist three months later to confirm the medication is working effectively, which it is.
The total cost to wear a heart monitor, see a heart specialist and receive a follow-up consultation is $4,250, and Chris’ medication is $90 for a 60 day supply. Because Chris’ deductible is $6,100, he has to pay all of his medical bills out-of-pocket, including his prescription drugs. Chris decides to opt for a Silver plan again the following year since his condition is diagnosed and appears to be under control.
$695 per month, $12,200 deductible
Lauren and Chad are newlyweds who have just purchased a Silver plan together, which is the most affordable plan for their budget. Lauren is healthy and only uses preventive services, but Chad has Type II diabetes and sees a specialist during the year to maintain his medication. If he maintains his health throughout the year, he should only need to pay for a specialists office visit once a year.
By mid-summer, Chad’s blood sugar level is unmanageable. One day, Chad’s blood sugar plummets, and he collapses his bathroom, hitting his head on the sink on the way down. Lauren hears the “thunk” and finds Chad with a bloody gash on his head. She calls 911 and an ambulance takes Chad to the emergency room.
After an ER visit and four stitches, Lauren and Chad receive a $2,378 bill for the hospital services, $800 for the ambulance, and $180 for the follow-up visit with a specialist, they are faced with $3,358 in medical expenses. Chad will also need an adjustment in medication. Because he and Lauren have such a high deductible, all of Chad’s medical expenses are their responsibility.
In this case, if Lauren and Chad had purchased separate insurance policies, Lauren could have purchased an inexpensive Bronze plan for $261 a month, and Chad could have gotten a top-tier Silver plan for $341 per month with a $2,750 deductible and pharmacy benefits. They would have saved $93 a month compared to their current rate, and Chad would have richer benefits with a lower annual deductible.
$754 per month, $4,000 deductible and includes child dental coverage
Louis, Kate and baby Charlie are young and healthy, and while their budget is extremely important, they understand that Charlie can get sick throughout the year, and should carry a lower deductible plan with low doctor office copays, should he need medical attention.
During the year Charlie gets three ear infections, two which land him in Urgent Care and one at his primary pediatrician. He also gets two colds, and needs prescription cough syrup to clear his infection. Charlie gets five prescriptions over the course of 12-months, two which are generic at $10 each and three which are regular retail price at $55. Louis and Kate get their annual exams, which are free preventive wellness checkups.
The family has shopped smartly, and because of their richer benefit plan that pays for doctor visits and prescriptions, the family’s medical bills and prescriptions over the year total just $395.
The first open enrollment deadline for health insurance is December 15 to ensure you have coverage beginning January 1. When shopping for a plan, keep not only your budget in mind, but your healthcare expenditures for the coming 12 months.
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The views expressed here are those of the author and do not necessarily represent or reflect the views of Healthcare, Inc. and HealthCare.com.