Health Insurance: You Can Afford It

Prior to entering the Health Insurance industry by accident a few years ago, I hadn’t the faintest idea regarding health insurance options. I’m a military veteran, and thus I’m provided with health care from the VA. I assumed my ignorance was unique to myself. However after I became a professional in the industry, I quickly learned that I was not alone. Most Americans receive sponsored insurance from their employers, but for those not offered that such as small business owners and contractors, most are sorely ignorant of their options. The industry has dramatically changed, but most people just don’t understand their options all these years later. Oftentimes I speak to, including small business owners, that just assume that they can’t afford health insurance. One of the first lines I often hear when I respond to a lead is, “I can’t afford it.” Many times they’ve just gotten off the phone with another agent that was probably trying to sell him or her something more beneficial to their own bank account, rather than what’s in the clients best interest. The truth is, given the costs of unexpected medical emergencies pushing or surpassing six figures, very few people can afford not to have health insurance. The good news is that health insurance isn’t unaffordable, most people just aren’t aware of their options or how the system works.?

When it comes to the Health Insurance market, there are four classifications of people. The most common are people that are offered employer sponsored coverage from their employer. If the coverage meets the Affordable Care Act (ACA) minimum standard, they are not eligible to receive a “tax credit” on an ACA marketplace plan. Think of a tax credit as a government sponsored discount. For these people, their best bet is typically to accept a plan from their employer, and maybe find a more affordable alternative for their spouse and kids if the employer doesn’t sponsor their portion. For people with an income below the poverty line, they are eligible to receive free insurance from their State. This is called Medicaid. Every State has either a hotline or a website that can be used to apply for this. For everyone between just barely over the poverty line to a family earning six figures with four or five kids, they will likely be eligible for a significant discount on the ACA marketplace. And the final category are people that earn too much to receive a discount, and may find less expensive options on the private market. A full priced Insurance premium is still much more manageable for people in this position, than the expenses accrued from a medical emergency with no insurance.?

The ACA is a great fit for a lot of people, and for some people, it is the only viable option. The most glaring benefit for most, is the government sponsored discount called the “tax credit.” Your tax credit is determined by several variables including your zip code, household income, number of dependents, and age. Typically older individuals approaching Medicare age are shocked to discover the size of their discount, despite their fairly large income. I’ve had some who sadly thought I was scamming them when I told them the cost of their monthly premium, they thought it was too low to be true. I was a little embarrassed to be accused of scamming, but what’s worse is they are probably over paying for insurance now. Perhaps the biggest benefit of the ACA is that it is a guarantee issue plan, and covers pre-existing conditions. Regardless of your medical history, or ongoing medical problems, you will be fully covered at no additional cost. You can also find coverage for expensive medications, especially great if you’re suffering from Diabetes. A few downsides of the ACA that can frustrate many people. In most States, PPOs are not available, only HMOs and EPOs. This means you only have coverage in the network, and in your State. If you see multiple providers and multiple prescriptions, it can be difficult to find a plan that covers them all. A plan that works for you one year, may not cover your doctor the next year. That’s definitely something to look out for during open enrollment before you renew.?

For those high income earners, not eligible for an ACA discount, they may be interested in seeking a private alternative. Some private alternatives offer comprehensive coverage, with large PPO networks, for less money than you’d spend on the ACA Marketplace. However, there are a lot of plans that aren’t worth paying a penny for. There are some essential things that you want to look out for to ensure you’re actually protected in the event of a major medical emergency, which is why you have insurance. Make sure that your plan has a Max Out of Pocket. If the plan doesn’t have that, then there is no limit to how much you could potentially spend out of your own funds. This is arguably the most important thing. There are a lot of “indemnity” plans out there, that pay a set amount per incident, and offer a bunch of wellness benefits such as 21 doctor visits. You don’t get car insurance for oil changes, you get it for when you total your car, right? It’s the same with Health Insurance, you aren’t getting it to cover doctor visits, you’re getting it to protect you when you get cancer. You also want to find a plan that is guaranteed renewable, meaning it won’t drop you because you’ve acquired a chronic condition after picking up the policy. That basically eliminates all “short term” insurance plans, which will probably be legislated out of existence soon anyways. A popular one that people should really be more cautious of, are Healthshares. They are great for maternity, and minor medical events, but there is a glaring problem which you could find if you read the brochure. There is no guarantee of payment. This is a problem with major events like cancer, that could push $1 million in the first year, the Health Share may not even have the money to cover it. A lot of the Health Share companies end up changing their names every couple of years due to issues like this.?

Again, I’ve never met a person that truly couldn’t afford Health Insurance. I’ve met people that weren’t aware of these options. I’ve met wealthy people that didn’t want to pay for it, and I’ve met people that put it off, come down with cancer and come begging for help outside of Open Enrollment, and there was nothing I could do for them. I hate that. It isn’t worth the risk of going uninsured. None of us can ever foresee when we might need insurance, and unless you plan your medical emergencies to align perfectly with open enrollment, you may miss out on life saving procedures. Or you may lose your business in bankruptcy from excess medical bills. Traversing the Health Insurance market without a professional that helps you understand all of these options, and will help you select a plan that protects your assets in a worse case scenario with the plan that best fits your needs will likely lead you to fall into one of the traps listed above. Find a professional that won’t try and lure you into a low premium private short term policy with no max out of pocket. If you need one of those professionals, I know a good one. #maxyourcoverage