It is almost that time of year. The time when people choose to overpay for healthcare. A 2016 Commonwealth Fund study said that healthcare accounted for over 10.1% of family budgets which is up from 6.5 only a decade ago. The study also said that healthcare was also outpacing income but had slowed slightly. Without getting into politics, and that is a challenge when you discuss healthcare, my goal is to help people understand the options available and to remove the risk that people have by simply choosing either substandard healthcare or none at all.
The first thing you should consider is whether or not you qualify for subsidies for the ACA (Affordable Care Act) plans. These plans offer unlimited coverage and have no restrictions on pre-existing conditions.
Depending on your household income you could pay as little as 2.08% of your income to as much as 9.86%. So, if you made $100,000 and had a family of 4 you would be expected to pay $9,870 a year for your family healthcare. This is $822.50 a month and if you are this close you may fall off what is known as the “cliff”. This means if your income exceeds the maximum limit even by $1 you could be responsible for the entire cost of the healthcare plan you choose. This comes as a surprise to many and will show up on your tax bill when you file.
Fortunately, there are alternatives that do not come with all the variables and you can sign up for them at any time. That is right anytime. This means if you are currently in a plan and one of these plans better fits your needs you can sign up today and start saving money. It is also beneficial if you think your income may exceed the limit and minimize the penalty that you will have to pay for making too much money.
So, what are the options I am talking about. These are Health Sharing Plans. They are not insurance but provide coverage to cover cost of healthcare and they come in many forms. I think they break down into affordable options in three areas depending on what you can afford and what you need. Most come with limits for pre-existing coverage for major illness, such as hospital or surgeries.
The most basic plan is a MEC, which means Minimum Essential Coverage. These are the most affordable plans and start at $69 a month. They provide telemedicine for family, annual physical and a limited number of Doctor visits a year. They are designed to provide routine healthcare for cuts, breaks and colds. They things you would normally go to your doctor or urgent care to treat. They do not provide any hospital or surgery care. They are a good option compared to no coverage at all and can save you money overpaying for routine care out of pocket.
The next area is catastrophic care. This is the opposite of the MEC and provides only Hospital and Surgical care. These plans are to provide a safety net for a major health event. They do have pre-existing condition limitations and a lifetime cap on the amount they will pay out but compared to the risk and cost of paying for a hospital stay yourself it is a good option.
The last option is a comprehensive plan that combines both the Doctor and Hospital care in one plan. This is where if you are currently on an ACA plan you should compare the cost verses the benefits to see if you can save money with these plans.
I help people evaluate all these plans and determine which way to cover your healthcare is best for you and your family. There is no cost for this analysis. As healthcare cost continue to rise and budgets become more stretched it is critical that you evaluate one of the largest expenses that most people have in their budget.
As a CERTIFIED FINANCIAL PLANNER ™, I am always looking for ways to help people stretch their budget and accomplish their goals while protecting their families. Feel free to give me a call (828) 559-0299 or stop by my office in Marion on Main Street.