Are platinum Obamacare plans worth a higher price?
Low out-of-pocket costs may be appealing, but not everyone will save money.
This post comes from Jonelle Marte at partner site MarketWatch.
Some people shopping for health coverage on the new state and federally run insurance exchanges may be lucky enough to find themselves contemplating the potential value of an increasingly rare option: the zero-deductible plan.
Insurance plans that don't have a deductible -- that is, a certain dollar amount that consumers must pay before their coverage kicks in -- are becoming harder to find in workplace plans, as more employers move people onto high deductible plans in an effort to lower the company's health care costs. They are also a rare option on the public exchanges: Less than 5 percent of the plans offered on HealthCare.gov, the exchange site servicing 36 states, have no deductible, according to an analysis by HealthPocket, a company that compares health-insurance plans. Still, the plans are available in some areas, offering consumers who are willing to pay larger monthly premiums a way to reduce their out-of-pocket medical costs throughout the year.
Zero-deductible plans are most common at the platinum level, the highest tier of coverage. Some 41 percent of platinum plans charge no deductible, according to an analysis by HealthPocket of the plans offered in 34 of the 36 states that sell plans on HealthCare.gov. In contrast, only 6 percent of gold plans and 3 percent of silver plans have no deductible, and the option is available with few if any bronze-level plans.
Health care consultants and insurance pros say zero-deductible plans may appeal to consumers who know they are likely to visit doctors and specialists frequently, particularly if they have a chronic illness that requires them to visit their doctor often or take several medications. The higher premiums, in a way, allow them to spread their medical costs over the course of the year, says Hector De La Torre, executive director for Transamerica Center for Health Studies, a nonprofit research consumer and employer education organization. Many of these plans charge a flat copayment for each doctor's visit instead of asking people to pay the full cost up front.
"If you have a pre-existing condition that requires you to visit your doctor regularly and you have a lot of prescriptions, then you should go for a lower-deducible plan that comes with a higher premium," says De La Torre.
But health-care consultants and consumer advocates caution that zero-deductible doesn't necessarily mean zero costs outside of the premiums. Even those Americans who can select zero-deductible plans may find themselves paying fees for medication, certain exams and other care.
"It doesn't mean you're not going to pay anything out of pocket," says Carolyn McClanahan, a physician-turned-financial planner and founder of Life Planning Partners, a financial advisory practice in Jacksonville, Fla.
Consumers should do the math to figure out what their maximum expenses would be under a particular plan and how much they would have to pay at a minimum. Starting next year, Americans will only be able to spend a certain amount on deductibles, copayments, fees and other qualifying expenses before they hit what’s called an out-of-pocket maximum, or the most they can spend on medical expenses for the year not including premiums after which the insurance company must pick up the rest of the tab. The cap protects consumers at all coverage levels from becoming overwhelmed with medical bills should they face an emergency. Such caps may also be lower for people choosing a no-deductible plan, but they would have to pay more on a monthly basis.
Consider two plans available for a 35-year-old in Florida. One is a low-premium bronze plan with a monthly premium of $160 and an annual deductible of $6,300, the same as the out-of-pocket maximum. Another is a platinum plan with a monthly premium of $359, no deductible, and a $2,000 out-of-pocket maximum. (Premium amounts do not take into account any subsidies consumers might qualify for.)
The person choosing the bronze plan could potentially wind up spending more on medical care throughout the year -- up to $8,220 between monthly premiums and the maximum out-of-pocket costs -- than the person choosing the platinum plan, who would pay up to $6,300 for the year between premiums and the out-of-pocket maximum.
But that scenario would only play out if the person ended up needing many medical services. If the person required minimal care throughout the year, he or she could have spent much less by choosing the bronze option. That's because the definite costs (the monthly premiums) would be cut in half with the bronze plan, totaling $1,920 a year for the bronze plan, compared with $4,308 for the platinum plan.
"You have to know as a consumer what your health care needs are," says De La Torre.
To be sure, a consumer in either plan could face additional costs if he or she needs to see a doctor that is not a part of the plan’s network or needs medication that isn’t covered. Such expenses may not be counted toward the out-of-pocket maximum and could add to one’s total medical costs.
"There's more to think about than premiums and deductibles," says Katherine Hempstead, the senior program officer for the coverage team at the Robert Wood Johnson Foundation, a philanthropy dedicated to health care.
More from MarketWatch:
As always s the answer depends...
If you are old, with pre-existing conditions, a bad health risk, and need someone else to pay your premiums, then Obamacare is great.
If you are in good health, young, then Obamacare is a terrible deal you will pay 3 times the normal premium to subsidize someone else. Like all socialist programs, you will need to drag those subsidizing others into the fold, by force.
If you like your Congressman or Senator you can keep him, if not, you will know what to do...
FIRE anyone that voted for Obamacare, unless someone else is paying your premium...
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