Like all forms of insurance, health insurance is designed to protect you from the unexpected. Very few of us can afford the high costs of medical interventions resulting from chronic illnesses or severe accidental injury.
But unlike other forms of insurance, Affordable Care Act (ACA) compliant plans include specific preventative care, including vaccinations and wellness screenings. If you choose an in-network provider, the cost of these particular services is covered 100 percent by your plan, even before you meet your deductible.
Every ACA-compliant health insurance plan must cover ten essential benefits; among those benefits are several preventative services available to everyone and some additional services specific to women and children.
To protect your own and dependents’ health, make sure you take advantage of these no-cost services. In many cases, the value of these benefits exceeds the cost of your premium; if you have a monthly premium at all – through the government subsidies provided through the ACA, TrueCoverage is able to provide 70 percent of our applicants’ coverage with zero out-of-pocket cost toward your premiums.
When you enroll in a health insurance plan, it is crucial to understand that the plan lays out how you and your chosen insurer will share your healthcare costs. Your deductible is a limited amount of money you agree to meet before your insurance starts paying major healthcare costs. Note some basic in-network provided services, treatments, and medications may be covered before you meet this agreed limit or deductible. Once you have met your deductible for the year, your insurer will start to pay a more significant share of your ongoing healthcare costs, and you will pay only a fixed amount or percentage, which is your copay for each service or medication.
Well beyond your deductible, every ACA-compliant plan will have a maximum out-of-pocket (MOOP) limit. Over this considerable amount, your insurer will pay 100 percent of your covered healthcare expense.
It may make sense to find a plan with a low deductible and early access to low-cost services and medication to many people. However, a low deductible invariably means a higher premium. Your plan choice depends on your anticipated spending on healthcare in the coming plan period (usually the next calendar year).
Of course, you cannot predict accidents or visits to the Emergency Room, but you do have records of the previous year’s expenditure on minor interventions and prescription drugs. You also have your physician’s advice concerning your possible need for major surgery and the chronic (long-term) need for expensive prescription drugs.
This information will help you decide on the plan type you should choose and the deductible level for the next plan year.
Health insurance operates annually, and you cannot carry forward unused benefits from one year to the next. For example, you may have reached your deductible limit for the year, and this does not mean you reap the benefits of meeting again next year; you have to meet that deductible again first.
On the other hand, this may be the year in which you or your dependents have had unusual or expensive medical and healthcare needs. You may be close to or have exceeded your current plan’s maximum out-of-pocket limit. In other words, any further medical expense will be met by your insurer and, in effect, free. The MOOP will also reset at the end of your plan year, so you want to think strategically about any treatments, surgeries, or expensive testing you may have been putting off due to cost. The end of the plan year may be the best time to take care of that before your out-of-pocket maximum resets next year.
Alternatively, if you expect to commit to an expensive course of treatment next year, choosing a plan that takes this cost into account makes sense. For example, you could choose a plan with a low maximum out-of-pocket. Your monthly premium would be higher, but your savings on the cost of surgery, hospitalization, and extended after-care could be thousands.
Say you have not met your deductible for this plan year, you may want to wait (If you can without risk to your health) to schedule expensive procedures and testing until the beginning of your next plan year. While you will need to be prepared to pay the whole of your deductible and coinsurance up to the level of your MOOP, it means healthcare for you and your dependents will be cost-free for the rest of the plan year for having met that deductible and MOOP.
For most of us, the sudden cost of medical intervention is not practical. Depending on the urgency, we would prefer to delay and take advantage of the lower deductible and coinsurances, confident that our insurance covers our planned expense.
Read More: The Fight to Keep ACA EnhancementsOne last piece of advice. When selecting a plan, every ACA-compliant plan has a Summary of Benefits that one should carefully read before enrolling. It may even exclude specific procedures, for example, bariatric surgery, from your coverage. Even if you are sticking with the same plan next year, the summary of benefits may change from one year to the next. Talk to an experienced, qualified insurance broker if you are in doubt. The folks at TrueCoverage are here to help! It may cost you some time, but it could save you thousands.