In the United States, under the Affordable Care Act (A.C.A.), or widely-known as Obamacare, every American is mandated to have a health insurance. If you can afford to pay a health insurance, and you don’t have one, you will be fined. As of 2016, the fine is $695 (if you haven’t had a health insurance in the entire year) or 2.5% of your household income, whichever is higher.
I have a health insurance at work, but my mom doesn’t. So, being the budget pal that I am, I had to search online for different health plans that would fit my mom’s needs. I want to share with you four important things that I have learned when I bought my mom’s health insurance.
This will be your monthly fixed cost for the health insurance. This varies depending on the health insurance plan (and its coverage) that you buy. The three major factors that affect the price of your premium are: copay, deductibles, and maximum out of the pocket costs.
This is the amount that you must pay before getting any minor services like doctor’s visit, and/or the cost of prescription drugs. This could either be a fixed cost or a percentage of the total bill. For example, when you see a doctor, your copay can either be a fixed $20 every visit, or a percentage of the total bill.
Generally, this is the amount that you must pay before getting any major services. For example, depending on your plan, if you go to the hospital and have to undergo a surgery, deductible is the amount that you have to pay first before your health insurance pay its share in the cost. If your medical bill is $20,000 and your deductible is $6,000, you will have to pay $6,000 first before your health plan kicks in.
Now, who pays for the remaining $14,000? The answer is: it depends on the plan that you bought. After the $6,000 deductible that you paid, you might still be liable for a portion of the $14,000 depending on your plan. Again, this is just an example.
Some plans don’t have deductibles and some have. This amount is tied to the premium. Generally, the higher the premium is, the lower the deductible is, and vice versa.
4.) Maximum Out of the Pocket
As the name suggests, this is the maximum out of the pocket cost that you can pay in a term, which is usually a year. From the example above, if your maximum out of the pocket cost in a year is $7,000, after you pay the deductible of $6,000, you will only have to pay the additional $1,000, and the health insurance will pay the remaining $13,000. This is because you’ve already reached your $7,000 maximum out of the pocket in a year. Any amount beyond your maximum out of the pocket cost in a year is usually paid by the insurance company. Again, this is just an example. Health plans differ and situations vary.
Bottom line is: taking care of our health is a serious business. Finding a health insurance is a serious business. We should carefully consider the premiums, copay, deductibles, and maximum out of the pocket expense, in line with the overall picture of our health and finances, when we buy health insurance.
In my opinion, if you will pay a $695 fine anyway, why not just buy a health insurance? Having a cheap health insurance with high deductible is still better than not having one at all.
I was able to find a health insurance for my mom. Though it is not the cheapest nor the most expensive, I have bought a plan that fit her needs and our finances.
For more information on buying health insurance from the marketplace, visit Healthcare.gov.
Have you bought a health insurance? What were your experiences?