After an extensive search, Mary had gotten a new full-time job that started a month ago. She was transitioning from out of state and was looking forward to starting over in a new place. She thought that Waco would be more her speed after living in Chicago for the last 20 years. We've seen a lot of people relocating like Mary over the last five years.
Now that she had her job and could breathe a little easier because she wasn't using her savings to live on, she was also excited that this new job came with a health care plan for her. She began looking at the plan details and tracking down in-network healthcare providers to see. She also decided to make sure that she understood her copays, deductibles, and other out of pocket costs. As she did this, she started to become frustrated as it appeared that her options for approved health insurance providers were limited and those out of pocket health costs were going to be pretty steep. Especially when you consider the annual premiums that you are being taken out of your paychecks.
Have you ever been in Mary's shoes and wondered what you're actually paying for with your health insurance? Deductibles, copays, coinsurance, max out of pocket, prescription tiers, pre-authorizations...it's enough to make your head spin! And it seems like every time you look, less is covered but the prices keep going up! Whether you have employer-sponsored insurance or an individual plan, it's all just a big confusing mess that only benefits the insurance companies. Even the doctors can't stand it!
Texans face a strange world of health insurance and employer plans. The belief that good health insurance only comes from employers is widespread. But when policies sound like jumbled fortune cookies in a foreign language, people start questioning their options. So, what do you do if your work health insurance sucks? Mary reached out to us to find if there were any affordable health plan options that she could leverage.
My Health Insurance At Works SUCKS!
We have a couple of times a year where our health agents become busy helping Texans like Mary evaluate their options for affordable health insurance because of what they are seeing in their annual employer health benefits enrollment. One of those time periods is when the teachers go back to school and the other is during the fourth quarter of every year when it seems like almost every company goes through their open enrollment for benefits. With that process comes the news about what is being done to the health insurance plan to "keep the costs of health care down".
At that point, the documents stating premiums and deductibles come rolling through and you feel confused about your coverage options just like Mary. We have good news. There is a path to comparing health insurance coverage beyond the health insurance premiums. It is important to understand networks and the true cost of health care for your family. Let's look at a plan to see how your level of coverage might stack up against your other options for health care coverage.
What are your guaranteed medical expenses for the year with each plan?
- Monthly Premiums
- Prescription Costs
- Copays for things you know you will use
- Visit Costs If Not Covered
What could be you out in Medical Costs if you had a major health event?
- Deductible Amount
- Coinsurance Amount
- Copays for things like ER visits that don't count towards your deductible
- Deductible + Coinsurance = Maximum Out Of Pocket Costs
The first step is to determine your guaranteed costs. This was an easy step for Mary, but we cannot stop there. You have more money at risk than just your guaranteed costs. This is where many Texans mess up their calculation. After you have determined your guaranteed costs and add up what you could be your out of pocket costs if you need to utilize your healthcare plan for more than basic guaranteed costs. This extra utilization could come from an ER visit, a referral to a specialist, or even a major surgery.
The total of guaranteed costs and potential costs when using your plan is your total cost of risk for any insurance plan or alternative to health insurance like health share programs. Take that total for each plan and see what your range of commitment is for each plan that you are evaluating. This will allow you to see not only the recurring, regular costs. But you will also see the downside potential if a major event were to happen on that health insurance coverage.
Knowing both the guaranteed costs to expect and the potential that you can be out of pocket will quickly expose if your employer-sponsored health insurance plan actually sucks because you can compare it to other plans available to all Texans including the individual health insurance exchange. This kind of comparison is more important than just comparing monthly premiums. Mary had never seen this before, but she liked understanding these differences and felt like she had power in the decision making now.
So My Work Plan Isn't Great. What Can I Do Now?
If you compare your current work plan to even the policies on the Affordable Care Act Exchange and determine that you can do better, what do you do now? The great news for you is that there are options in Texas that allow you to take control of your health care and the insurance that most feel is necessary to be protected from bankruptcy. When people like Mary call our office, they always want to know what their options are beyond the exchange and work plans. So let's take a look at what those are for Texans.
- Go Uninsured - We put this simply to say it is an option. Just a dumb one. There are many options to choose from. Do not take this route.
- Health Share Plans - These plans became very popular when the tax mandate was put in place as the Affordable Care Act rolled out to require people to buy health insurance that included essential minimum benefits. Though these plans are not actual health insurance, these were considered compliant for the purposes of the ACA mandate. These health plans allow people with common interests to share health care costs and pay for routine care out of their own pocket. The downside is that it is not actual health insurance and is not regulated by the state department of insurance. If there is a problem with them reimbursing you, you are on your own.
- Individual Health Insurance Exchange - These individual health plans are also known as Obamacare. They are guaranteed issue no matter your pre-existing conditions as long as you are inside an enrollment period. Typical open enrollment period is November to January for the upcoming calendar year, but there are also special enrollment periods during the year if you qualify with life events. You do not qualify for the premium tax credits that reduce the cost if you have an "affordable" employer based plan being offered to you. The number of health insurance companies offering these plans to Texans will vary depending upon where you live as the options available will vary by county.
- Private Individual Health Insurance - These plans are making a comeback now that the tax mandate has been removed. We are seeing the big health insurance companies bring these plans back to market. It potentially may be a bit more expensive than your work plan, but can provide you exactly the benefits you want to receive without being locked into a health maintenance organization if you qualify through the underwriting process. The health coverage that is offered in these individual health plans can range from high-deductible health plans to maximum health benefits, so make sure that your financial goals and cash flows match your choices made!
- Short Term Medical Insurance - These typically are fully underwritten health insurance plans that were created to provide health coverage outside of Open Enrollment for the ACA Healthcare Exchange. They offer a variety of options for true health insurance coverage, though many of the plans exclude some key coverage that many feel important like mental health or maternity benefits. These plans are also not required to cover the essential health benefits laid out in the Affordable Care Act, so some people can be caught off guard at times. While these health insurance plans are available to all Texans, the legislation associated with them makes the length of coverage available vary over time. That means they are not a long term solution unless for most.
- Catastrophic Health Insurance - There are many myths about Catastrophic Health Insurance floating about the internet. The way that the ACA Exchange Marketplace Plans describe it along with their age and income requirements is not the only way to obtain it. Catastrophic health care coverage does exist and it does protect you from those big events which can derail your life. It doesn't get involved in your routine care at your Primary Care Physician or typically does not require a specific provider network. But you do need to be prepared to pay for routine care visits out of pocket, which is a foreign concept to many people after all of these years of copays and "free" wellness checks. While it is not comprehensive coverage as you may think of it, the average cost for these plans is typically lower and this can be a long term solution for you until you hit Medicare.
That's Great! So Which One Should I Choose?
Mary liked having options and a plan to evaluate them. Choosing an alternative path to affordable coverage is a very subjective discussion which Mary was now beginning to understand. If you have a dreaded pre-existing condition it will reduce what type of health insurance options are available to you. But keep in mind that not all conditions are knock outs from coverage, so speak with an independent insurance agent who actually can sell you those kinds of policies.
The big reason that we believe that better health insurance is a subjective decision is that not all out of pocket health insurance costs are the same. We have seen local Texans utilize Direct Primary Care Doctors to manage all of their routine medical services in a very cost effective fashion. That concept pairs extremely well with a Catastrophic Health Insurance plan for a very cost effective solution when compared to marketplace coverage, traditional health insurance or even employer-sponsored plans.
On the converse of that, Short Term Plans have enough flexibility today to provide you a more traditional copay type situation. And there is always that Traditional Individual Health Insurance plan as well. The important thing to keep in mind are coverage gaps may be more important than just lowering your monthly costs.
So What Do I Do?
We recommend working with a health insurance agent who can present multiple options to you. Having options allows for the agent to work as a fiduciary on your behalf. They can present both the positives and negatives without an agenda to make sure that you can make the best decision for you and your family. As independent insurance agents, Insurance For Texans functions in this kind of role. If you would like to explore your options, just click the button below to see what is available to you.