Important Information About Healthcare Plans
Following Is Information That Is Really Important To Know
The total cost of your healthcare plan is not just the monthly cost. You have to know the plan's Max Out-of-Pocket cost. Together, this would be the plan's "All-In Annual Cost". The All-In Annual Cost is what you really need to know to make a comparison and to select your Healthcare Plan.
The Monthly Cost: First, you need to be able to afford the monthly cost. CHPs are about 50% less than ACA plans. For a 25 year old person the ACA cost is about $200. For the same person the CHP cost is about $95.
The Deductible Cost: When you have a medical event you will need to pay the plan's deductible cost before the plan pays any of your medical bills. For ACA plans the deductibles range from about $1,000 to over $7,000. For CHPs the deductibles range from $500 to $2,000.
The Co-Insurance Cost: After you pay the Deductible, most plans charge you Co-Insurance. Co-insurance is a percentage of the remaining medical costs after subtracting the Deductible. Usually you see 80/20 or 70/30. This percentage calculates to a dollar amount. For ACA plans the Co-Insurance cost could run between $1,000 and $7,000. CHPs have no Co-Insurance!
Max Out-of-Pocket Cost (MOOP): The MOOP is the total of your Deductible and Co-Insurance cost. This is the cost that is really important to know. For ACA plans the MOOP is almost always greater than $6,500 for an individual and over $14,000 for a family. For a CHP, the MOOP is between $500 and $2,000 per person.
As an example, your major medical plan’s monthly cost is $500, has a $5,000 Deductible and 80/20 Co-insurance. Your medical costs are $20,000. Once you pay the $5,000 Deductible the remaining medical cost is $15,000. You will pay 20% of this cost until you reach your Max Out-of-Pocket. If your Max Out-of-Pocket is $6,500, your Co-Insurance cost is $1,500 ($5,000 plus $1,500 equals $6,500).
All-in Annual Cost: Finally, add your annual monthly cost to the plan's MOOP to really see the plan's cost. If you are paying $500/mo., your monthly premium's annual cost is $6,000. Add a $6,500 MOOP and you All-In Annual Cost is $12,500 for one person. For your family the All-In cost would be $19,000.
The Bottom-Line: You must be able to afford to pay both the monthly cost and the Max Out-of-Pocket cost. If you can't, you should not purchase that Healthcare Plan. You need to look to other options.