The Affordable Care Act has been around for many years and each year the plans get worse; meaning deductibles and maximums out of pocket keep getting higher. The premiums also are getting higher and many plans are simply unaffordable for the average family. The older you get, the higher the monthly premiums.
What all of this means is you must figure out what type of plan do you want and what can you afford? With rising premiums, higher deductibles and maximum out of pocket, it’s difficult. So, let’s look at it from a different angle.
What do you want from your health insurance? Do you want fixed copays for doctor visits, lab and X-ray, hospital stays, etc.? Or will a high deductible plan meet your needs? Remember, the more features in your health insurance, the higher the cost. This kind of thinking is different from what you’ve been taught so it may take you a while to come to that conclusion.
First, you need to access your current health. Are you always running to the doctor or do you go when necessary? If you are sickly with a disease your needs are different than someone with no, or little health issues.
Simply put, buying health insurance today is very tricky. The more benefits you want, the more costly the premiums. The compromise is to simply look at your needs and what plan closely matches those needs.
It is my recommendation that if you are healthy and rarely go to the doctor, then you don’t need fixed copays for doctor visits? If you go for your annual preventative appointment, that is covered at no cost. If you go to the doctor maybe once more yearly, you don’t need fixed copays for doctor visits and can save significant premium dollars by choosing a high deductible plan with little or no fixed copays.
What you really need is protection from a catastrophic situation that could ruin you financially. Recognize that the real reason for buying health insurance is to protect your assets in the event something catastrophic happens to you. Protecting your self against something serious is the correct way to buy coverage. Prior to the Affordable Care Act, it was about covering all costs and the premiums were affordable. Today, it’s much different. Protect your assets. My suggestion for those who are relatively healthy to buy the plan with the lowest premium and highest deductible and max out of pocket.
There is also an HSA type plan where you put away the money to cover the deductible and max out of pocket and do so pre-tax. That is a great way to plan for a catastrophic situation. Many plans today offer the HSA component but very few people take advantage of it. You put the money away until you need it and you are prepared for any situation. When you retire you can use the money to pay you out of pocket costs on Medicare.
Buying health insurance today is more difficult and using a broker who knows the differences in plans and the reasons people buy the types of coverage is a wise move on your part. The broker gets paid from the insurance company, so it costs you nothing to use their services. Pick wisely as there are many brokers in the market so getting a referral from a trusted friend or associate is very important.
The Barend Agency Inc.
Len Barend, broker