Recently my husband and I traversed thru the process of signing up for insurance thru healthcare.gov. I am a full time doctoral student and my husband owns a software development firm. Being self-employed has always put us in the position of having to have some more creative options when it comes to health insurance. Our most recent policy had us paying $340 for a very high deductible plan that seems like it has only about 3 doctors and 1 hospital in America that take it. That being the fact we were very enthusiastic about what we might find thru HeathCare.gov.
Are the insurance policies in the affordable care act affordable? Well that depends on a few factors like income, family size, location, age and smoking status. The Affordable Care Act attempts to lower costs via tax credits called subsidies. These subsidies come in three forms.
Medicaid: If your single and your income is below 15,302 or if you are a family of four and have an income 31,115 and below. Some states do not offer medicare so if you fall into this category check your state’s marketplace.
Help to pay your premium, if you buy in your state's online marketplace: Individuals whose income is between Between $11,505-$46,021 and for a family of four between $23,425-$93,700.
Subsidies for out-of-pocket costs, if you buy in your state's online marketplace: Individuals whose income is between 0-$28,763 and a family of four between 0-$58,564.
What this means in plain english is that the government will pay a portion of your premium according to your income and family size. At first glance it may seem as though the savings you get from the Affordable Care Act may be minimal or in fact you may be paying a higher monthly premium than you currently pay. While your monthly premium may not have changed or in fact be slightly higher, there may be some other more important things to look at that may ultimately end up saving you money in the long run.
The amount you have to pay out-of-pocket for expenses before the insurance company will cover the remaining costs. Usually the higher the deductible the less your monthly premium will be. Some of the higher deductible plans come with an option for an HSA(Health Savings Account). These accounts allow you to put money into an interest bearing savings account and if the money is used toward qualified medical expenses it is completely tax deductible. Read more about HSAs here. We ultimately found one of these options as the best way to go.
The amount you pay per doctor visit. Policies will have an amount you will have to pay per visit, usually under $100 for normal doctor office visits. Some plans say you pay a certain amount of copay after deductible, which means after you have paid your total deductible, you have to pay the copay amount each time you have an office visit. If your plan has co-pays before the deductible for you primary care physician or emergency room visits, that means you only have to pay the copay when you visit certain doctor offices regardless if your deductible has been met or not.
Usually given as an a percentage. If your coinsurance is 20% after deductible, it means that after you have met your deductible you are responsible for 20% of your medical bill until you reach your out of pocket maximum. Some plans offer a co-insurance before the deductible is met but these usually have a higher monthly premium.
With these things in mind we ultimately chose a plan that had a higher deductible thru an hsa. We saved a small amount on our premium, but this plan allows us to save money into an interest bearing account that rolls over from year to year and the money that is use for medical bills is tax deductible.