For the most part, I write posts that tend to focus on building your spirit and strengthening your faith with the intent to push you towards Jesus. Sometimes, however, I find that people ask me to share some practical knowledge that I’ve acquired over the past few years. This week’s topic?
HEALTH INSURANCE.
I know, I know, everyone hates it. No one wants to talk about it. But let me tell you…EVERYONE needs it. I am no expert, by any means, but I have definitely learned my fair share about health insurance and dealing with plans, claims, and benefits, so I am happy to share a little of what I’ve learned. And regardless of your political affiliation and/or opinions, health insurance is a must-have, especially if you are over the age of eighteen..which most of you are. So READ THIS. Then GO GET IT.
1. Deductible & Co-Pay
This is one of the most important numbers that you need to look at because outside of normal health maintenance, this is the LEAST amount you’ll have to pay if you get sick. If you get the flu or hurt your ankle playing soccer or something, most likely you’ll go the doctor or ER or walk-in clinic.
Before your insurance company pays anything, you are required to pay your deductible. If you have a great insurance plan, this could be as low as $500. If you have a not-so-good plan, it could be as high as $8,000-$10,000. After you reach your deductible, your insurance will then begin to contribute towards your medical costs, usually at a 70/30 split (insurance pays 70%, you pay 30%).
2. Out-of-Pocket Maximum
This is another big one. The out-of-pocket maximum is that absolute MAXIMUM amount that you will spend on your in-network healthcare for a calendar year. For most plans, an individual OPM is around $6,000 and $13,000 for family. If yours is less, be grateful. The OPM does include your deductible and co-pays but does NOT include your monthly premiums. Most people don’t even look at this number but as soon as you have a major accident or illness, you’ll quickly learn what it is.
As a cancer patient, I reach my out-of-pocket maximum in about 15 minutes. It’s true. One full body scan and a brain MRI totals around $18,000. Crazy, huh? And that’s just the tests themselves and doesn’t include the radiologist that writes the report or the appointment I’ll have to have with my oncologist to READ the results…from the paper…someone else wrote.
So, if you need medical care beyond preventative services, you’ll pay 100% of costs until you reach your deductible after which you’ll pay a certain percentage, probably around 20-30%. If the bills keep coming, you’ll keep paying that percentage until you reach your out-of-pocket maximum. Then, finally, they pay everything (as long as it is a covered service and in-network).
3. Prescription Coverage
I had to learn the hard way the importance of this one. Most people don’t realize prescription plans are not often included in a medical plan. There’s a gamut of reasons why this is the case and as annoying as it is, it just is. If you look at your policy, you’ll probably find that prescription drugs are covered at certain percentage, much like the after-deductible deal. So, you go to fill a prescription that’s $100 and you have a 70-30 split, you’ll pay $30. This seems like a good deal but this is where the costs can really add up. Your prescriptions costs are rarely included in your deductible OR your out-of-pocket maximum so it’s likely you’ll keep paying these, regardless of your other costs.
Most of my melanoma treatments have been prescription medication, with the exception of all my surgeries and IV infusions. Everything else, prescription. The medication I’m currently on breaks the bank at–brace yourself–around $19,000 a month. So, even on an average plan that gives a 70/30 split, 30% of $19,000 is still $5,700–completely, absolutely, unaffordable. The plan I had a few years ago had this split and let me tell you, the few months we had to come up with that kind of money was AWFUL and soooo stressful, the last things cancer patients need to deal with. (One of the main reasons why so many cancer patients rack up medical bills is because of lack of prescription coverage.)
HOWEVER, there ARE ALTERNATIVES. There ARE plans that combine prescription and medical coverage. Thankfully, the one I’m on now is one of them. Because they are combined, the out-of-pocket maximum is now met with a 30-day supply of pills rather than a 15-minute test. What a relief.
Joking aside, if you can get a plan that combines the two, prescription and medical, get it. It’s worth it.
4. Health Savings Account (HSA)
A Health Savings Account is a great little “gift” that certain plans offer. It’s basically a savings account (hence its name) that can be funded with PRE-TAXed dollars. Money in the account must be used for medical expenses (copays, deductible, vision, dental, etc;) but if you don’t use it, it just rolls over into the next year, gaining interest all the while.
An HSA is only offered with a high deductible plan so while you’re saving money because of the lower monthly payment, you can put that extra cash into your HSA so if something does happen and the medical costs start to become an issue, you can just swipe your HSA card and be on your way. If you’re young & healthy, you’re kinda crazy NOT to get one of these. Just sayin.
5. Monthly Payment
When someone goes to sign up for insurance, the first question usually asked is “How much does it cost a month?” Your month-to-month costs can vary greatly, depending on a few main issues, one of which is your deductible and out-of-pocket maximum. This is last on the list because really, this should be the LAST factor you look at when deciding which plans works best for you. Of course your monthly expenses matter and no one wants to pay a super high bill but if you look at this first, I can almost guarantee that you won’t make the best decision for you and your family.
Monthly payments can be as low as $75 (for an individual) to upwards of $500 (for family). Lower monthly payments always result in higher deductibles and higher out-of-pocket maximums, two things we DON’T want. As I’ve said, the out-of-pocket maximum is really the most important number so let that guide your decision, followed by other factors we’ve discussed. Of course, you have to make a choice that is affordable but make sure to weigh the pros/cons before just checking the lowest monthly payment box.
Ok, so I really hope this is helpful and apologize if you were bored out of your mind. Sometimes, though, you just gotta talk about this stuff, especially if you find yourself on the phone with your insurance company wondering why in the world you just got an outrageous bill!