Comparing Health Insurance Coverage Options in 2020

by | Dec 5, 2019 | Direct Primary Care, Health Share, Ridiculous Healthcare Costs | 0 comments

The process of comparing health insurance coverage options is incredibly complicated and daunting. With over 530,000 Americans a year filing for bankruptcy due to medical bills it is totally understandable why this process is so stressful. Every day I talk to families and small businesses about their health costs and insurance options. I am not a finance or insurance professional, I am focused on helping people access care. However, the concept of coverage is so ingrained with the need for healthcare that it is hard to separate the two.

Bottom line for you non-readers: I can save $10K this year by shopping around and comparing my health insurance coverage options while getting better access to primary care at a fixed cost by combining a short term limited duration policy with a Mission Direct Primary Care membership.

These conversations convinced me that I need to shop for my family’s (me and my husband) health insurance coverage to really understand what our customers are experiencing. I have never had to do this because we have always been a military family (now retired) and receive our coverage through TriCare, which I am incredibly thankful for. But I decided to push that aside and jump in and shop as if I was in need of coverage for my family. In this process, I learned so much and was just amazed at the cost differences between my options. I was also taken back by how complicated it was to shop and compare options given that I consider myself pretty well equipped to understand this stuff since I have had masters’ level finance classes and have been working in healthcare for almost a decade. Hands down it shouldn’t be this hard.

First things first, since I am incredibly data-driven and a little bit of a nerd I created a spreadsheet to keep track of my numbers and organize the specifics of each plan in a way that will allow me to compare the monthly, annual, and long term cost of each option. If you would like a copy of the spreadsheet head over to our Facebook page and send us a message and I will get it to you.

Comparing My Health Insurance Coverage Options

I researched three options for our health insurance coverage :

  1. Affordable Care Act (ACA or Obamacare) plans through the marketplace on Healthcare.gov (also available through a broker)
  2. A short-term limited-duration policy for a 12-month term
  3. A health share plan through Sedera

According to Colin Wattonville, an independent insurance broker, “it is important to understand that you have many more health insurance options since there is no longer a penalty for opting out of marketplace coverage.” A good insurance pro will be able to help find a product that is a good fit for you and your family.

ACA Marketplace Plan on Healthcare.gov

This is the place many individuals start. The process was straightforward and took me about 30 minutes to get to the actual plan options for my family (me and my husband). I needed to have both of our social security numbers available as well as information about our annual income and tobacco habits (we are nonsmokers). Your income information is needed to determine if you qualify for federal subsidies to off-set your monthly premium. It is very important that you estimate your income accurately because if you end up making more, you may have to pay back some of the subsidies dollars that were applied to your premium. No one wants to deal with that at the end of the year. 

In general, you may be eligible for tax credits to lower your premium if you are single and your annual 2020 income is between $12,490 to $49,960 or if your household income is between $21,330 to $85,320 for a family of three (the lower income limits are higher in states that expanded Medicaid). The range differs for families of different sizes. If you buy a plan through the marketplace and your income is between $12,490 and $31,225 for a single person ($21,330 to $53,325 for a family of three), you can also qualify for help with cost sharing. Special modified silver plans are available with lower deductibles, copays, and annual out-of-pocket limits on cost sharing.

Kaiser Family Foundation

After plugging in our data it was determined that we are not eligible for subsidies and our monthly premium options started at right around $1000 and went up from there.  After picking my jaw off the ground I reviewed my options and chose a bronze plan for my comparison. Neither of us has chronic conditions or regular prescriptions so the least (crazy) expensive option could fit for us. 

Beyond coverage, what do I pay for care?

This plan offers primary care visits for $80 and specialist visits for $150. These visits may be subject to additional billing events in which case I will pay full price for those services until I meet my deductible. After I reach my $7200 individual deductible I will pay my co-insurance rate of 50% for any bills.

Wow, is all I have to say. That is a ton of money without any real care included in the sticker price. I am so glad we have alternatives.

Short Term Limited Duration Policy

First things first, the name is misleading. Short term limited duration (STLD) plans may now be purchased for terms up to 12 months and can be renewed for up to 36 months. These plans are not designed to include all of the coverages required in ACA plans, like preventive services, primary care, and mental health. These plans provide financial protection from major medical bills from hospitalizations, accidents, and disease (like cancer).

To access pricing for STLD plans I worked with Colin Wattonville, a local insurance broker here in Omaha. He quoted me based on our ages, smoking status, and zip code. As I understand it, if we were to purchase an STLD policy we would need to go to underwriting to make sure we are eligible based on our health history.

Beyond coverage what do I pay for care? 

This plan is very straight forward and doesn’t include any preventive services or reduced pay rates for appointments. I will pay for all of my expenses up to my $2500 deductible and then I will pay a 30% coinsurance rate for all services I use until I meet the $5000 out-of-pocket maximum.

In order to create a similar level of coverage as the ACA plan I will add a Mission Direct Primary Care membership for us at $178 a month, and use the GoodRX app to shop for the best cash price for prescriptions. 

Sedera Health Share Plan

Health share plans (sometimes called health share ministries) are a noninsurance alternative to health insurance plans. Health shares are medical cost-sharing arrangements established for the purpose of sharing legitimate health expenses between members. I chose Sedera because they are secular, meaning that they don’t require a specific statement of faith that is aligned with a specific religion.

Sedera pricing is very straight forward based on your age, who is being included in the plan, and your preferred initial unshareable amount (IUA). Tobacco users pay a surcharge and preexisting conditions may be subject to exclusions from cost-sharing for a few years. 

Here is the breakdown of the Sedera health share plan I chose:

$510 per month with a $500 IUA for member plus spouse. My husband and I are in different age brackets so I just went with the higher of the two.

Beyond coverage what do I pay for care? 

By design, the purpose of a health share plan is to provide relief from large medical bills, not from manageable preventative and primary care expenses. Therefore, members are responsible for those costs and they access the share pool for larger needs, like an accident, an expensive test or imaging, or a hospitalization.

When I submit a medical need for payment by the plan I am responsible for the first $500 of that cost (our initial unshareable amount- IUA) and the share pool will pay the remainder. With a family plan, I will pay that IUA for the first 5 needs in a given year, after that the plan will pay the full amount of any additional needs. This basically creates a $2500 out-of-pocket maximum for the plan.

In order to create a similar level of coverage as the ACA plan I will add a Mission Direct Primary Care membership for us at $178 a month, and use the GoodRX app to shop for the best cash price for prescriptions. 

Trying to compare health insurance coverage options is hard when it is more like apples to oranges.

This is where the math got complicated and I had to establish a set of assumptions around the care I would consume in the next year and over the next 10 years.

My assumptions:

  • Costs will not change over ten years. It is a big assumption but I didn’t want it to get too complicated. In reality, premiums have been increasing most years. ABC News reported that individual premiums on the ACA marketplace went up 22% in 2017 alone. YIKES.
  • I will add a direct primary care membership to both the short term limited duration policy and the health share plan option to create a plan that includes preventive care services similar to the ACA plan. It includes a lot more than just that but for the sake of comparison, we will leave it there.
  • Just like the statistics report we will have one “bad” health year out of ten, where we meet our out-of-pocket maximum amount and get full dollar coverage for our remaining healthcare expenses.
  • Our annual healthcare consumption where we receive actual care, not just coverage, will remain constant over the nine remaining years in my projection. 
  • I will base that annual consumption amount on two of the examples of care cost provided on page 8 in the Summary of Benefits of my Healthcare.gov plan.

The Bottom Line:

What would you do in 2020 with an additional $10,000 in your family’s budget? Save for college, go on vacation, or save for the bad healthcare year when you have to pay for your out-of-pocket maximum? (Of course, I vote for choice #3)

The truth of the matter is that all of those things are an option for me if I choose the short term limited duration policy over the Healthcare.gov ACA plan. The annual savings are $10,843 which includes my primary care needs through a Mission Direct Primary Care membership and the two examples of additional needed care.

Here is the bottom line for an average year, a very bad health year, and the cost over ten years.

Is $10K worth it for you to shop around and think differently?

I bet it is. Let me help. All of the details of how I compared costs can be found in a spreadsheet I created. If you would like a copy of the spreadsheet head over to our Facebook page and send us a message and I will get it to you. 

Some risks to consider:

Again, I am not a pro, so do your own research.

  • Health share plans are not insurance products and therefore are not indemnified, meaning they are not legally bound to payout. They have been around for a long time and there has been very little reported about that happening, but please be informed. Check out our page on Health Shares for more info and here is a link to a great article that goes deep on health shares.
  • The short term limited duration (STLD) policy I am considering is capped at $800,000 per person for medical expenses. It also doesn’t include any coverage for mental health or preventive care. All I have to say is that I included a direct primary care membership so I have budgeted for my preventive care and the $10K in annual savings will get me more than a few counseling sessions should I need them.
  • The STLD policy is underwritten at renewal so if I have expensive claims or gain a diagnosis I likely will not be able to renew.
  • On the ACA plan, I will have to watch my network like a hawk. If I go to the emergency room at an in-network hospital but an out of network physician works on me, I could be liable for the entire bill. The same could be true if I am out of the area and need to seek care.

DISCLAIMER: I am not an insurance or financial expert, I am just sharing my personal experience in shopping for health coverage for a 48-year-old female and 50-year-old male, non-smokers with no pre-existing conditions. I do not sell any insurance or financial products. I do sell direct primary care memberships, so if you are interested in that give me a call 402-509-8964.

elizabeth

Elizabeth Hallgren is Co-Founder of Mission Direct Primary Care. She is focused on working with individuals and businesses to minimize the amount of money they spend on health care while receiving the highest level of care. Elizabeth has worked in healthcare marketing since 2011. She was entrepreneurship faculty at Tippie School of Business at the University of Iowa. She has worked with over 200 entrepreneurs to develop and scale sustainable business models. Ms. Hallgren has been an invited presenter at several conferences on entrepreneurship and economic development. She earned her M.B.A. at the University of West Florida.

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