We’re now at the end of open enrollment aka the busy season in my department at the company where I work as an individual business representative for Blue Cross Blue Shield’s individual and family products. With just two more weeks until Open Enrollment ends, individuals who aren’t offered insurance through their job will have to make a decision as to what kind of health plan will work for them. Many do not know how health insurance plans actually work and for those that were accustomed to their standard 80/20 plans, many of the Affordable Care Act plans play by their own rules. Plan designs have become complex and particular.
Many times, individuals will purchase health plans unaware of how they work in the instance of an emergency or illness. Most of Blue Cross Blue Shield’s plans don’t cover prescriptions until after you meet the plan’s deductible. Back in the day, there were health plans that were covered solely based on whether they were a generic or brand name. Now, you have to follow a prescription drug formulary, which has prescriptions listed under certain tiers and depending on which tier the prescription is listed under, that will determine what you will pay for it (after meeting your deductible).
Now, I can really only educate you on Blue Cross Blue Shield plans because that is the carrier that I work with, however, it is to my understanding that the plans work similarly across all carriers. Let’s cover the basics of choosing a health insurance plan based on your lifestyle.
Deductible- The dollar amount that you must meet (out of pocket) before coinsurance kicks in
Coinsurance- The amount you pay minus the difference that the carrier pays for services rendered
Out of Pocket Max- The dollar amount that one must hit before most services on the plan are covered at 100%
Premium- The amount you pay every month to keep your insurance active
Ancillary- Dental, Vision; Other insurance for additional services
Plan types and coverage options
Catastrophic Plans- offers coverage in the case of an emergency. Coverage is very basic. Preventative is covered (by law) and members will have copays for office visits as most of the plans do. The deductible on this plan will most likely be $6,600 for an individual and $13,200 as this is the max deductible a carrier can charge per the Affordable Care Act. This will also be the member’s out of pocket max (the maximum amount a member will pay out of pocket before all other coverages are covered 100%) You as the member will essentially pay for all medical cost out of your pocket until you meet your deductible. These plans do not have coinsurance. All costs will go towards your deductible. BCBS only offers their catastrophic plan to applicants 30 years and under unless you can prove financial hardship as these are the cheapest plans that they offer. I do find that a lot of college kids (not on their parent’s health plan) purchase this plan.
Light Coverage- most services will be covered at a 60/40 percent ratio. Meaning that the carrier will pick up 60% of all cost incurred by the services provided after the member meets their deductible and until the member meets their out of pocket max. The deductible will be just a little less than the catastrophic plan and the out of pocket max will be around the same as the catastrophic plan. This plan is the essentially the lowest cost plan for those over thirty.
Medium- The amount that you’ll pay for premiums will be slightly higher but will meet in the middle in terms of how much you’ll be paying for services. The deductible on this plan is typically just a little bit over $1000 for an individual and around $3000 for a family. After meeting your deductible, coinsurance is 20% for most coverages with an out of pocket max of around $6000 for an individual and $12,000 for a family
High- Monthly premiums will be higher but your out of pocket cost will be lower. Your deductible will be lower and your out of pocket max will be slightly lower. You’ll be mostly paying for services at the coinsurance amount until you hit your out of pocket max.
Highest-your premiums will be very costly but your deductible will be very low, Generic RX will be covered up front with a small co-pay and it will not take you long to reach your out of pocket max. Your coinsurance will be 10% and additional ancillary products are available within the plan.
To reiterate, I am only speaking on knowledge from my everyday work with Blue Cross Blue Shield. What’s explained here is solely based off of their plans. Keep in mind that a lot of their plans are network driven and that will take part in determining what your premium is every month, where you can seek service and how services are covered. Also, Dental and Vision is an option to purchase as a standalone plan with any of the plan types that I’ve described above.
When choosing a health plan that’s right for you, keep in mind your physical state and health conditions, if any. If you’re the type of person that visits the doctor a lot, then purchasing a plan with a lower deductible is probably the best option for you. Vice Versa, if you’re pretty healthy and typically only visit the doctor for preventative services and feel as though for the next year you’ll still be in good physical health, then pick a plan with a higher deductible so that you’re paying a lower premium every month. If you want to play it safe for the what ifs, purchase a medium coverage plan in which your premium and out of pocket costs will be more of a balance.
Feel free to contact me via social media with your health care questions as I’m pretty versed in the individual and family market and how it works with the affordable care act.
I’ve provided a link from Blue Cross Blue Shield’s web site that provides a page of links to info published by the carrier explaining how their plans work and how you the consumer can get the most use of your insurance.
Good Luck and as always: Stay Ambitious, Stay Motivated!