HEALTH INSURANCE
For the past 10 years between 400,000-700,000 people declare bankruptcy each year. The number one cause of family bankruptcy is medical expenses. High medical bills and unexpected healthcare costs can quickly accumulate, particularly for individuals without adequate health insurance coverage or facing serious illness or injuries.
Most people have healthcare insurance through their work or through Medicare. The quality of healthcare insurance obtained through the workplace can vary dramatically. Most are good or at least sufficient, giving an individual or family protection against catastrophic medical expenses.
The average cost for health insurance for an individual under 65 in the United States for 2023 is $560 per month for a silver plan. A silver plan falls in the middle with moderate deductibles, copays and coinsurance. Catastrophic plans with high deductibles are the cheapest, averaging $332 per month, with bronze plans coming in at $440 per month. The greater the coverage the more expensive the plan. Gold plans cost $604 per month per individual, and platinum plans cost $737 per individual per month.
The cost of care also varies by the type of plan. Plans that are HMOs (Health Maintenance Organizations) usually have the cheapest premiums averaging $480 per month in the US in 2023. They have a limited panel of doctors to choose from, but usually, especially in a large city, is not so limited that there are few choices. You also typically need a referral from your primary care physician to see a specialist. This is one way that HMOs cut costs. Instead of being able to self-refer for any problem, it is preferred that you see your primary doctor for most issues. Most diabetics do not need to see an endocrinologist, most people do not need to see a cardiologist for years after a stent or heart attack for secondary prevention, most people do not need to see an orthopedist for every joint ache and pain. General internists and family physicians are well trained to treat these types of problems, and many studies have shown that people who live in countries with a strong primary care focus, vs a specialty-based focus like in the US, are generally healthier and have much lower health care costs.
PPOs or preferred provider organizations are the next lowest in premium averaging $576 per month. A PPO has a limited panel of doctors like an HMO but usually does not require referrals to see specialists.
For people over 65 and those on disability, Medicare is the primary insurance. Data from 2022 showed that the average Medicare spend per person was $15,700. This is the Medicare spend, which does not include patient copays or payments by Medicare supplements.
People should not rely solely on Medicare for their health insurance because Medicare only pays 80% of what they deem approved expenses. This can often be thousands of dollars less than the cost of care, which would leave people at severe financial risk. Everyone on Medicare should get a Medicare supplement to cover the expenses that Medicare does not cover. Supplements can be expensive, however, often averaging $200-500 per month. The supplements usually cover most if not all the expenses Medicare does not cover.
An alternative to having Medicare with a supplement is looking into a Medicare Advantage program. Medicare Advantage is an HMO program run by a private insurance firm funded and overseen by Medicare.
With a supplement, you pay the premium every month whether you are healthy or not. That is the point of insurance, to cover you for that major illness. With a Medicare Advantage program, the only premium you pay is your Medicare premium. The MA program covers everything else. You have a deductible and copays but also have a maximum out of pocket expense. This limits your financial liability because once you hit that limit you are done. The maximum out of pocket expense usually ranges from $2000-$3000 per year. So, in other words, if you are healthy and see your doctor twice yearly, you pay no additional expenses, as opposed to the supplement which would be paid monthly, healthy or not. If you have a bad health issue, your financial liability is capped.
Since Medicare Advantage is an HMO, you do need to get referrals to specialists from your primary doctor. Again, MA programs save on expenses by having your primary care doctor care for all routine issues, sending you to a specialist when you need specialist treatment only. Most patients have no problem with this, often saying they did not know their primary doctor handled all these issues, and they appreciate not having to see 5 different doctors for issues their doctor can care for. From the doctor’s perspective denying care is extremely rare. Physicians experienced in Medicare Advantage know that the way they make money is to keep their patients healthy and out of the ER and hospital, which are the most expensive points of medical care. If that requires specialist care, it will be given. And with the payment mechanism Medicare uses to pay physicians through Medicare Advantage, physicians are paid more for taking on patients with health issues, thus avoiding the “cherry picking” in which physicians avoided caring for sick patients in the past. If a physician has a patient with multiple health issues, they can earn more by keeping that patient healthy and out of the hospital than they might taking care of patients who have no health problems. In essence, in MA programs physicians are paid to keep their patients healthy. In traditional Medicare, physicians are basically paid to treat you when you are sick.
Some patients do not tolerate having to get a referral every time they wish to see their specialist and wish to see a specialist for routine problems. If that is the case, they are poor candidates for MA programs and should stay with traditional Medicare with a supplement.
For people who have no health insurance, either because they are out of work, recently changed jobs and have no insurance, or work for a company that does not provide health care coverage, the Affordable Care Act (ACA) also known as Obamacare, is a comprehensive healthcare reform law passed in 2010. The main goal of the ACA is to increase access to affordable healthcare coverage for all Americans, particularly those who were previously uninsured or underinsured.
The ACA introduced several key provisions to achieve its objectives. Firstly, it mandated that most Americans have health insurance, either through employer sponsored plans, government programs like Medicaid and Medicare, or through purchasing individual policies. It established health insurance marketplaces where individuals and small business could compare and purchase plans, often with subsidies based on income level.
To ensure comprehensive coverage, the ACA also included a range of consumer protections. It prohibited insurance companies from denying coverage or charging higher premiums based on pre-existing conditions, age or gender. Additionally, it extended coverage for young adults up to the age of 26 under their parents plans and eliminated annual and lifetime coverage limits.
The ACA also aimed to improve the quality and affordability of healthcare. It required insurance plans to cover essential health benefits, such as preventive services, prescription drugs and maternity care. It promoted the use of electronic health records and implemented various payment reforms to encourage cost-efficient and value-based care.
Overall, the ACA aimed to expand access to affordable healthcare coverage, protect consumers, and improve the quality and affordability of care. Its impact has been significant,
with millions of previously uninsured individuals gaining coverage, but it remains a contentious issue in American politics.
The ACA has an annual Open Enrollment period, typically from November to mid-December, during which individuals can enroll in health insurance plans. One can visit the Health Insurance Marketplace website or call the Marketplace Call Center to explore available options and enroll in a plan.
Outside of the Open Enrollment period, individuals may still be eligible for a Special Enrollment Period if they experience certain life events, such as losing job-based coverage, getting married, having a child, or moving to a new state. They have a limited time window to enroll in a plan after these qualifying events occur.
Depending on the state, individuals with low incomes may qualify for Medicaid, a government health insurance program. The ACA expanded Medicaid eligibility in many states allowing individuals with incomes up to a certain threshold to qualify. They can apply for Medicaid through their state’s Medicaid agency or the Health Insurance Marketplace.
The ACA provides financial assistance in the form of subsidies to help lower-income individuals afford health insurance. These subsidies are based on income and can significantly reduce monthly premiums. Individuals can determine their eligibility for subsidies when applying for coverage through the Marketplace.
Navigators and Certified Application Counselors are individuals or organizations trained to help consumers understand their health insurance options under the ACA. They can provide free assistance in completing applications, exploring plans choices, and determining eligibility for subsidies or Medicaid.
It is important for individuals seeking coverage to gather necessary documentation such as proof of income, Social Security numbers, and immigration information (if applicable) to facilitate the enrollment process. By utilizing the resources available through the ACA, individuals without health insurance can navigate the process and secure coverage that meets their needs.