Does anyone understand Obamacare?

[mountainsoft]

I'm trying to estimate what our healthcare expenses might be when we retire using the Washington Healthplan Finder (for Washington state, of course). To keep things "simple" I'm only comparing plans from Kaiser Permanente (what we have now through my wife's employer) with subsidies based on our estimated income. Unfortunately, I'm getting buried in all the premium, deductable, copay, coinsurance, and other lingo to make any meaningful comparison.

The healthplan finder gives an "estimated out of pocket cost, INCLUDING premiums". But that's obviously useless as it estimates a $350/mo plan as costing $1900 for the year (350x12=4200?).

I assumed if I had a $1000 deductible we would pay out-of-pocket until our costs got over $1000. Then insurance would cover a portion of the additional expenses until we reached our out-of-pocket-maximum (say $7500). Then we would pay nothing over that. But none of the examples I see on Kaisers plans work anything like that, and don't include enough detail to understand where the costs are going.

I'm just trying to estimate our "worst case" healthcare expenses. I could just add the premium and max out-of-pocket cost, but that would be overkill. We had one major hospital expense last year ($80K before insurance), but most years we only spend $2k to $5K per year per person (before insurance).

How on earth do you make sense of this stuff to make any meaningful estimation?

How do you choose between gold, silver, bronze or decide what deductible to select?

Bonkers over complicated...

For example, why would I pay $430/month for a Gold plan (no deductible) with a $7250 out of pocket max, when I could pay $0/month for a bronze plan (5000 deductible) with a $7750 out of pocket max?

 

[Mr._Graybeard]

I tried to keep things simple and chose a high-deductible Bronze plan that's HSA eligible with zero co-pay after reaching the deductible. To me, the best option is to treat Obamacare as insurance -- that is, protection from a medical catastrophe -- rather than a fringe benefit that you might get from an employer.

 

[joeea]

How on earth do you make sense of this stuff to make any meaningful estimation?

If you aren't able to understand the tradeoffs, you can get help from an Assister. See: https://localhelp.healthcare.gov/#/

 

[Bamaman]

We're on Medicare with a supplement purchased through our ex-Megacorp.

We don't know anything about O'Bamacare, and am glad that we are finally of real retirement age.

With my wife's cancer 12 years ago and my type II diabetes, obtaining outside insurance wouldn't be cheap.

 

[gauss]

I do actually understand a fair amount of it. I did much research before ER'ing at a sub-50 age to ensure that I wouldn't be screwing myself (under current law).

If you will be getting subsidies (ie ACA MAGI < 400 % FPL) then your net premiums will be less than 10% of your MAGI for the second lowest cost silver plan. If you choose a more expensive plan than this you will pay the net increased cost and if you choose a less expensive plan, such as a Bronze plan then you will pay less accordingly.

The max out-of-pocket costs typically don't include the premiums, at least for the HSA compliant plans.

It looks like Kasier Permanente in WA interprets out-of-pocket max this way also (ie. premiums are additional).

Annual out-of-pocket maximum
This is the most you’ll pay for care during the calendar
year before your plan starts paying 100% for most
covered services. In this example, you’d never pay
more than $6,500 for yourself and no more than
$13,000 for your family for your copays, coinsurance,
and deductible in a calendar year.

So net premiums plus max out-of-pocked costs would be your worse case scenario - IMHO.

Regarding the terminology, copays and coinsurance are similar concepts. It relates to your contribution for service after you have met your deductible. Copays are typically fixed dollar amounts (ie $50 per office visit) and coinsurance is a % that you pay (ie 20% for in-network services).


> For example, why would I pay $430/month for a Gold plan (no deductible) with a
> $7250 out of pocket max, when I could pay $0/month for a bronze plan (5000
> deductible) with a $7750 out of pocket max?

I have seen strange things like this in my wife's employee/retiree plan this year. Obviously we took the $0 premium plan in that we are fairly healthy.

While I am at it, if you have multiple people on your policy, beware of the term "embedded deductible". This has to do with whether one person can meet the deductible for the entire family, or if each individual person has to meet their own deductible before the Insurance will start to pay for them.


-gauss

 

[RunningBum]

The healthplan finder gives an "estimated out of pocket cost, INCLUDING premiums". But that's obviously useless as it estimates a $350/mo plan as costing $1900 for the year (350x12=4200?).

Any chance there's a subsidy reducing or eliminating the premium to make those numbers work?

For example, why would I pay $430/month for a Gold plan (no deductible) with a $7250 out of pocket max, when I could pay $0/month for a bronze plan (5000 deductible) with a $7750 out of pocket max?

Some, not me, have found that some of their providers are in the Gold plan but not the Bronze. There could also be some differences in drug coverage or other things.

If you can hold your MAGI under 250% there can be cost sharing benefits to a Silver policy.

What I do, after checking to make sure my preferred HC providers are in the plans I'm comparing, is to make some estimates for low/medium/max usage, and see which plan works best, and by how much. Last year I found that the bronze (obviously) worked best for low usage, and surprisingly for max usage because the Max OOPs were about the same, but there was a window of fairly high to high usage where gold was best. The advantage wasn't that much compared to the bronze advantage at low levels, so I went with bronze. It also had the advantage of being HSA eligible, which has an additional cost benefit of a greater subsidy and tax break.

Sounds like your process is good. The numbers don't have to make sense. Some of those plans really just don't make sense, so don't try to make sense out of them.

 

[MichaelB]

I'm trying to estimate what our healthcare expenses might be when we retire using the Washington Healthplan Finder (for Washington state, of course). To keep things "simple" I'm only comparing plans from Kaiser Permanente (what we have now through my wife's employer) with subsidies based on our estimated income. Unfortunately, I'm getting buried in all the premium, deductable, copay, coinsurance, and other lingo to make any meaningful comparison.

The healthplan finder gives an "estimated out of pocket cost, INCLUDING premiums". But that's obviously useless as it estimates a $350/mo plan as costing $1900 for the year (350x12=4200?).

I assumed if I had a $1000 deductible we would pay out-of-pocket until our costs got over $1000. Then insurance would cover a portion of the additional expenses until we reached our out-of-pocket-maximum (say $7500). Then we would pay nothing over that. But none of the examples I see on Kaisers plans work anything like that, and don't include enough detail to understand where the costs are going.

I'm just trying to estimate our "worst case" healthcare expenses. I could just add the premium and max out-of-pocket cost, but that would be overkill. We had one major hospital expense last year ($80K before insurance), but most years we only spend $2k to $5K per year per person (before insurance).

How on earth do you make sense of this stuff to make any meaningful estimation?

How do you choose between gold, silver, bronze or decide what deductible to select?

Bonkers over complicated...

For example, why would I pay $430/month for a Gold plan (no deductible) with a $7250 out of pocket max, when I could pay $0/month for a bronze plan (5000 deductible) with a $7750 out of pocket max?

All those options are really one plan with many different ways to pay. It’s called cost sharing. When you increase your share, with a higher deductible or copay, the premium goes down. Here’s an excel spreadsheet one of our members built that lets you plug in the different numbers for gold, silver, etc, and then see how much the total yearly cost is for each option at different levels of health spending. http://www.early-retirement.org/for...nd-coinsurance-copay-68965-3.html#post1374536

 

[davebarnes]

With my wife's cancer 12 years ago and my type II diabetes, obtaining outside insurance wouldn't be cheap.

These do not affect insurance prices under ObamaCare.
Only four factors count: location, income (subsidy eligible or not), age, smoker/non-smoker.
Thanks to ObamaCare, you can no longer be denied insurance for pre-existing conditions nor be charged an extra amount.

P.S. The answer to the original question in the thread title is: no.

 

[MichaelB]

Insurance companies offering numerous combinations of premium, deductible, total out of pocket, etc, is nothing new and definitely not the consequence of Obamacare, If anything, the ACA simplified this.

Most people never dealt with it because the employer did when choosing insurance plans for job health benefits. Ask any benefits coordinator. Health insurance complexity is designed by the insurance companies.

 

[mountainsoft]

Some, not me, have found that some of their providers are in the Gold plan but not the Bronze.

All of the plans I'm comparing are with Kaiser so they should all have the same providers.

make some estimates for low/medium/max usage, and see which plan works best, and by how much. Last year I found that the bronze (obviously) worked best for low usage, and surprisingly for max usage because the Max OOPs were about the same

I was trying to estimate the costs based on our actual pre-insurance expenses from the last three years. That included two fairly normal years, and one year with significant hospital bills. The best gold plan had simple fixed copays, the silver plan pays about 30% instead. When I added up the various copays, lab fees, hospital costs, insurance premiums, etc. the end totals didn't seem to vary much from one plan to the other.

The max out-of-pocket for the gold plan is $7250 compared to $7750 for the bronze plan. That's not much difference considering the gold premium is over $5000 more. What am I missing?

Any significant bill over $26K per year shouldn't cost more than the out-of-pocket maximum right? 30% of 26K is $7800, 40% of 26K is 10,400, either way they shouldn't exceed the out-of-pocket max would they?

With only 2-3 doctor visits average per year, the difference in copays doesn't amount to much.

 

[Dtail]

The cost can be widely different by state and then even by zipcode.
You can play around with Healthcare.Gov at different MAGI scenarios.
In FLA where I live, there is no reason to get a Gold plan, as almost all doctors accept the bronze and silver plans.
To me, if you do expect some costs and use of the system, the Silver plans with tax subsidies and cost sharing appear to be the best choice.

 

[Mr._Graybeard]

If you aren't able to understand the tradeoffs, you can get help from an Assister. See: https://localhelp.healthcare.gov/#/

Yep, we used an independent health insurance agent. He was a huge help the first year, when you could sit on hold for hours waiting for help from ACA staff over the phone. The agent's commission came from the insurance provider, so his assistance didn't cost us anything.

 

[mountainsoft]

Here’s an excel spreadsheet one of our members built that lets you plug in the different numbers for gold, silver, etc, and then see how much the total yearly cost is for each option at different levels of health spending. http://www.early-retirement.org/for...nd-coinsurance-copay-68965-3.html#post1374536

I tried entering Kaiser's top Gold plan, middle Silver plan, and the low end Bronze plan. As with my own crude calculations, the total cost of Gold and Bronze did not differ much at most health expense levels. Surprisingly, Silver was the worst in most cases, and as a TOTAL cost Bronze seemed to come out ahead in most every case.

That seems counter intuitive to me. How can the bargain plan outperform the premiere plan? Same providers, same health care. The only advantage I saw to the Gold plan was a lower price at each doctor visit, but averaged over a year it didn't seem to matter.

I MUST be overlooking something?

 

[razztazz]

I tried entering Kaiser's top Gold plan, middle Silver plan, and the low end Bronze plan. As with my own crude calculations, the total cost of Gold and Bronze did not differ much at most health expense levels. Surprisingly, Silver was the worst in most cases, and as a TOTAL cost Bronze seemed to come out ahead in most every case.

That seems counter intuitive to me. How can the bargain plan outperform the premiere plan? Same providers, same health care. The only advantage I saw to the Gold plan was a lower price at each doctor visit, but averaged over a year it didn't seem to matter.

I MUST be overlooking something?

It is designed to confuse people. If transactions were easy and transparent they couldn't skin a few extra bucks off the people who got duped. This is true of all consumer contracts.

 

[ivinsfan]

We're on Medicare with a supplement purchased through our ex-Megacorp.

We don't know anything about O'Bamacare, and am glad that we are finally of real retirement age.

With my wife's cancer 12 years ago and my type II diabetes, obtaining outside insurance wouldn't be cheap.

No it would not be cheap but not because you have previous health problems. Your previous problems have nothing to do with the cost of your insurance. Now depending on your co-pays and deductibles your OOP costs could be more expensive then someone with no health issues.

 

[Cut-Throat]

How on earth do you make sense of this stuff to make any meaningful estimation?

Bonkers over complicated...

It's the U.S. Healthcare System in general. Just look at any Medical Bill or any Medical Insurance Policy...

 

[bobandsherry]

I tried to keep things simple and chose a high-deductible Bronze plan that's HSA eligible with zero co-pay after reaching the deductible. To me, the best option is to treat Obamacare as insurance -- that is, protection from a medical catastrophe -- rather than a fringe benefit that you might get from an employer.

In my area, the Bronze HSA is not better overall vs the standard Bronze plan.

 

[ivinsfan]

All of the plans I'm comparing are with Kaiser so they should all have the same providers.



I was trying to estimate the costs based on our actual pre-insurance expenses from the last three years. That included two fairly normal years, and one year with significant hospital bills. The best gold plan had simple fixed copays, the silver plan pays about 30% instead. When I added up the various copays, lab fees, hospital costs, insurance premiums, etc. the end totals didn't seem to vary much from one plan to the other.

The max out-of-pocket for the gold plan is $7250 compared to $7750 for the bronze plan. That's not much difference considering the gold premium is over $5000 more. What am I missing?

Any significant bill over $26K per year shouldn't cost more than the out-of-pocket maximum right? 30% of 26K is $7800, 40% of 26K is 10,400, either way they shouldn't exceed the out-of-pocket max would they?

With only 2-3 doctor visits average per year, the difference in copays doesn't amount to much.

You are missing the amount of money you pay out BEFORE you hit the OOP maximum... if you claims below the OOP maximum yet still a hefty amount the Gold plan should cost you less. If you are only worried about coverage above the OOP maximum.. get the bronze with an HSA component.

 

[Mr._Graybeard]

In my area, the Bronze HSA is not better overall vs the standard Bronze plan.

IMO, the HSA eligibility is a valuable benefit the standard plan doesn't have. You can make tax-deductible deposits into an HSA, use it to reduce your MAGI and pay medical/dental bills with pretax money or use the account as a tax-deferred investment vehicle.

 

[PaunchyPirate]

You really need to dive into the specific details of EACH cost component in order to determine which one works best for you. While presenting a lot of alternatives at various price points can be considered confusing to some, to others it might mean "this one works better for me, because of my situation".

I'm not from WA, but I did a quick comparison for a Seattle zip code using an estimated income of $40,000 and looked only at the Kaiser plans.

Did you notice the "Compare" option that lets you see plans side-by-side? Doing this, I can quickly notice multiple differences between the Flex Gold 19 and the Flex Bronze 19.

1. Difference in the # of visits to primary care doctor covered
2. Difference in the # of specialist visits covered
3. Very different deductible level
4. Copays differ for primary, specialists, chiropractor, substance abuse, vision care
5. Bronze plans have co-insurance clauses for primary, specialists
6. Significantly higher prescription costs at all level of drugs for the Bronze plan

Bottom line -- bronze plans cover less and you might have to pay more IF you use the services. If you don't, then you're the winner. If you need significant medical services, then Gold might be a better solution.

Personally, as a new retiree (age 56), I thoroughly WELCOME the Affordable Care Act process. By reading the Heathcare.gov website content and all the various websites that discuss it, I was able to educate myself on what all these terms mean (and don't mean). I found that all the data was laid out for me in a manner so that I could compare plans and make my choice. In PA, we use the Healthcare.gov site since we don't have a state market site. I did think the Washington site was a bit more confusing than Healthcare.gov. But the same basic information is there for your reading pleasure.

 

[mountainsoft]

You are missing the amount of money you pay out BEFORE you hit the OOP maximum... if you claims below the OOP maximum yet still a hefty amount the Gold plan should cost you less.

The difference in OOP-Max is minimal ($7250 vs 7750) between Gold and Bronze. Gold is a $5000/yr premium with zero deductible. Bronze is $0/yr premium with $5000 deductible.

If we spend $5000 for the year they would seem to break even. If we spend less than $5000, the Bronze plan seems to make more sense. That $5000 premium would pay for a fair number of doctor visits.

Any significant medical cost is going to hit the OOP-Max with either plan.

I've always assumed we would opt for the top of the line Gold plan, but the more I'm researching I'm starting to lean towards the Bronze plan.

 

[bobandsherry]

IMO, the HSA eligibility is a valuable benefit the standard plan doesn't have. You can make tax-deductible deposits into an HSA, use it to reduce your MAGI and pay medical/dental bills with pretax money or use the account as a tax-deferred investment vehicle.

Yeah, I've heard that and then tried going down that path. Seemed no matter how I looked at it my non-HSA was lower overall cost. I'm sure I'm overlooking something obvious as to how I could make that more beneficial.

With my non-HSA I get $35 visits to Dr (first 3 visits free). Specialist for $65. With the HSA plan the negotiated rate would be somewhere around $95 for Dr and $150 for the specialist. Drugs also include a co-pay only vs. paying whatever negotiated rate is for HSA plan. Same with labs, I basically pay nothing for labs on non-HSA and full cost for HSA plan.

Using HealthSherpa they estimate my "all in" costs would be $2,711 for non-HSA and $2,937. I'm sure there is some obvious I'm overlooking on the longer term basis.

 

[ivinsfan]

The difference in OOP-Max is minimal ($7250 vs 7750) between Gold and Bronze. Gold is a $5000/yr premium with zero deductible. Bronze is $0/yr premium with $5000 deductible.

If we spend $5000 for the year they would seem to break even. If we spend less than $5000, the Bronze plan seems to make more sense. That $5000 premium would pay for a fair number of doctor visits.

Any significant medical cost is going to hit the OOP-Max with either plan.

I've always assumed we would opt for the top of the line Gold plan, but the more I'm researching I'm starting to lean towards the Bronze plan.

I did a bronze too so no disagreement here. The 500 dollar difference in Max OOP isn't the point it's that every year you are assuming you could/would hit the max deductible. If you did hit the max OOP you could pay with HSA dollars which makes the difference less then 500 bucks.

 

[Mr._Graybeard]

Yeah, I've heard that and then tried going down that path. Seemed no matter how I looked at it my non-HSA was lower overall cost. I'm sure I'm overlooking something obvious as to how I could make that more beneficial.

With my non-HSA I get $35 visits to Dr (first 3 visits free). Specialist for $65. With the HSA plan the negotiated rate would be somewhere around $95 for Dr and $150 for the specialist. Drugs also include a co-pay only vs. paying whatever negotiated rate is for HSA plan. Same with labs, I basically pay nothing for labs on non-HSA and full cost for HSA plan.

Using HealthSherpa they estimate my "all in" costs would be $2,711 for non-HSA and $2,937. I'm sure there is some obvious I'm overlooking on the longer term basis.

Well, TBH, I've never done a dollar-to-dollar comparo, and of course it's hard to compare plans between states anyway. Last year I believe we spent about $2300 (pretax) from the HSA for medical costs that weren't covered by our Bronze policy. A couple years ago my DW and I had about $4,000 in dental bills, and I used pretax money from my HSA to pay them. The subsidy fully covered the cost of our Bronze policy.

Figuring about a 25% combined state and federal income tax burden, the HSA effectively gave me a 20% break by making those payments tax-exempt. We're in Medicare this year, and we can use the tax-deferred money in our HSA to pay our Medicare Part B and Part D premiums until we start collecting Social Security.

So that's why I like the HSA.

 

[walkinwood]

Try this spreadsheet.

http://www.early-retirement.org/for...-and-coinsurance-copay-68965.html#post1374536

That thread has a lot of discussion about how to pick between the various "metal" plans. I think a simple rule of thumb is - if you're pretty healthy & don't have any chronic conditions that require regular treatment or expensive drugs, a bronze plan will be the most cost effective.

Take a deep breath. It feels overwhelming at first, but it isn't that complicated once you've been at it for a while. Once you figure out the options, you can start thinking about how MAGI and subsidies work