Lower Deductible Plan seems way cheaper... what am I missing?

[DogGone]

Entertaining leaving COBRA for a higher deductible, low cost plan.

Current COBRA (Blue Cross Plan) plan is $1650/mo for a family of 4. $700 per person deductible and $4k per person annual max.

Agent Proposed "Crown" Plan is $880/mo with similar co-pays but a $5k deductible/max per individual for major surgeries/hospital stays. Emergency Room coverage is actually only $300 and 100% after, so that's better than current.

For over $9k a year in savings... why wouldn't I switch and take on the deductible risk?

I am new to this... what am I missing? My family is healthy and only one on going prescription which is the same in either plan.

Thanks!

Dog

 

[Sarah S]

Is the provider network the same?

 

[ziggy29]

A few things to check:

One may be a PPO plan and the other an HMO plan.

One may be a national plan and the other may be a state plan.

One may provide co-insurance before the deductible is met, meaning you are less likely to hit your deductible or OOP max. The COBRA plan seems to provide coinsurance after $700 until you hit $4K. That said, all else being equal, that alone does not justify paying an extra $770 a month. But all things together need to be considered.

Have you confirmed your doctor and most local medical facilities are in network with the cheaper insurance?

ALSO -- Cheaper plans with very limited networks may have very few providers that are accepting new patients.

 

[MBSC]

It sounds like you are comparing a Major Medical plan (COBRA) to a Health Care Sharing Ministry (HCSM) plan. Ask the agent to email you some PDF documents so you can see what it is.

The "classic crown" plan below is an ACA-Exempt HCSM with $5000 Individual Shared Responsibility (equivalent to deductible) and $300 ER copay like you're describing.

Classic Crown: http://www.1enrollment.com/manage/materials/1357/National%20OneShare%20Classic%20Enhanced%20Crown%20v052819.pdf

ACA-compliant non-group health plans from the agent should have Bronze, Silver, Gold, or Platinum in the name or description even if it's the off-exchange version. You can view health plans available in your area at the website below. As others have noted, the provider networks may be smaller than the COBRA plan's network and the plan type (PPO, HMO, EPO) may be different.
https://www.healthcare.gov/see-plans/

 

[zinger1457]

It sounds like you are comparing a Major Medical plan (COBRA) to a Health Care Sharing Ministry (HCSM) plan. Ask the agent to email you some PDF documents so you can see what it is.

Was wondering what a 'Crown' plan was, never heard of it. If it is a healthcare ministry plan and the agent didn't provide details explaining exactly what it is it's time to find a new agent.

 

[gauss]

When I googled Crown health insurance I found the following:

https://crowninsgroup.com/health/

They call it insurance, mention agents, etc.

No evidence to suggest that it is a Healthcare Sharing Ministry -- at least on a quick glance.

-gauss

 

[Freedom56]

Entertaining leaving COBRA for a higher deductible, low cost plan.

Current COBRA (Blue Cross Plan) plan is $1650/mo for a family of 4. $700 per person deductible and $4k per person annual max.

Agent Proposed "Crown" Plan is $880/mo with similar co-pays but a $5k deductible/max per individual for major surgeries/hospital stays. Emergency Room coverage is actually only $300 and 100% after, so that's better than current.

For over $9k a year in savings... why wouldn't I switch and take on the deductible risk?

I am new to this... what am I missing? My family is healthy and only one on going prescription which is the same in either plan.

Thanks!

Dog

You should check which providers are in their network. Not all healthcare providers are created equal. You should also verify how financially solvent they are.

 

[summerblues]

Reasons I'm considering staying on higher cost COBRA rather than switching to ACA plan: 1) Ability to go outside the network; 2) a nation-wide network rather than only state-based; 3) can contribute to HSA under my COBRA plan.

 

[DogGone]

The "classic crown" plan below is an ACA-Exempt HCSM with $5000 Individual Shared Responsibility (equivalent to deductible) and $300 ER copay like you're describing.

Classic Crown: http://www.1enrollment.com/manage/materials/1357/National%20OneShare%20Classic%20Enhanced%20Crown%20v052819.pdf
[/URL]

That looks close.. even the fonts and formats are similar (attached).

The Network is "One Share Health" and we are not really committed to our current physicians, but I'll check Monday if they are included.

 

[DogGone]

These HCSM’s are concerning me the more I read... not regulated, have to sign forms as to various beliefs, not legal bound to pay bills, some activities/behaviors not covered...

 

[Sarah S]

Also note maximum benefits. They look astronomical but a truly catastrophic event could blast you right through 500 K and well above. Transplant ( I once knew someone who got acute hep A and needed a transplant emergently healthy to transplant in 2 weeks). Autoimmune diseases that need a particular iv treatment a million a year. Likely ? No. But they do happen

 

[zinger1457]

These HCSM’s are concerning me the more I read... not regulated, have to sign forms as to various beliefs, not legal bound to pay bills, some activities/behaviors not covered...

Yes, you definitely want to research it thoroughly, there are a few older threads discussing healthcare ministries on this forum that may help you. I have a traditional ACA HDHP but have looked into them a little. Never heard of the company referenced in the link (OneShare?), it's not one of the original ACA compliant healthcare ministries but I guess it doesn't matter anymore since there is no longer a penalty. The costs (premiums/deductibles) you mentioned seem very high compared to what I recall some of the other ministries were offering but it's been awhile. Maybe compare OneShare with Christian Healthcare Ministries, https://www.chministries.org/

 

[pb4uski]

These HCSM’s are concerning me the more I read... not regulated, have to sign forms as to various beliefs, not legal bound to pay bills, some activities/behaviors not covered...

Smart.... basically it isn't regulated health insurance... more of an unregulated "club" that shares health care costs.... I would not risk my life savings on something like that to save $770/month.

Though I concede that some people love them and swear by them.

Can you manage your income to be low enough to qualify for ACA subsidies?

Also under ACA if the lowest cost bronze plan exceeds 8.16% of your income, you can qualify to buy catastrophic coverage. In some jurisdictions catastrophic coverage is significantly cheaper, in others not so much... but worth spending a few minutes to check into.

Who can buy a Catastrophic plan

Only the following people are eligible:

• People under 30
• People of any age with a hardship exemption or affordability exemption (based on Marketplace or job-based insurance being unaffordable)

... If the lowest cost Bronze-level Marketplace plan available to you in the tax year costs more than 8.16% of your annual household income, you may qualify for a health coverage exemption. ...

https://www.healthcare.gov/choose-a-plan/catastrophic-health-plans/

https://www.healthcare.gov/exemptions-tool/#/results/2018/details/marketplace-affordability

 

[DogGone]

Can you manage your income to be low enough to qualify for ACA subsidies?

If this includes interest and realized capital gains (including capital distributions), I certainly hope not, given my assets and plan to live off the portfolio growth and income.

Do you need that level for the previous year or an average of years? I still have half a salary this year, so no chance this year, but much income comes from tax exempt munis... is that income included in this calculation?

 

[pb4uski]

It is for the year because if you receive advance premium credits they are based on estimates of income that you provide but the actual premium credit is based on your tax return... if the actual premium credit exceeds the advanced premium credits then you get a refund for the difference. conversely if the actual premium credit is less than the advanced premium credits then you pay the difference with your taxes.

You can opt to just pay the unsubsidized premiums and then get the premium credit based on your income when you file your tax return.

You can't control dividends or capital gain distributions, but you can somewhat control capital gains timing and by selection of purchase lots.

One strategy that some people use is to get no subsidies in one year and raise a couple year's worth of cash and then get subsidies for the next year or two and then repeat the cycle.

 

[DogGone]

Thanks... it looks more like I should keep the COBRA and study this til next year

This and ending my relationship with a FA which manages half my portfolio are my biggest expense opportunities.

 

[4legsgood]

I\...much income comes from tax exempt munis... is that income included in this calculation?

Yep, tax exempt muni income is part of MAGI for ACA purposes.

 

[DogGone]

I spoke to the agent again and I can add a "buy up" to $1M per incident per person for about $150 per month.

as for the Catastrophic plan... that is a bare bones plans that only covers catastrophes... not interested in that.

Interestingly, I can get into this at anytime and out of my COBRA at any time next year, so I could just delay the decision to Q1.

 

[pb4uski]

....as for the Catastrophic plan... that is a bare bones plans that only covers catastrophes... not interested in that. ..

WADR, you're totally missing the point.

There are two principal reasons for buying health insurance.

First, to insure your wealth from the financial impact of an expensive health event. My cat plan has a deductible and out-of-pocket maximum of $7,900 per person.... check.

Second, to gain access to negotiated rates for any health care services that you do need..... check.

Luckily we are healthy. Our claims average less than $1k a year and if we have a bad year we can afford the $6,900 additional deductible... why would we spend more for a lower deductible that is likely to end up unused?

Silver and gold policies are great... for people who have more chronic health issues.

The bronze deductible is $6,650... $1,250 lower... but the bronze premium is $250/month or $3k a year more... buy why would I pay $3k a year more for a $1,250 lower deductible? My mama didn't raise no fool.

On top of that, our cat policy covers annual physicals in full.

 

[MichaelB]

as for the Catastrophic plan... that is a bare bones plans that only covers catastrophes... not interested in that.

Is this catastrophic plan ACA compliant? If so, it offers a great deal more than “only covers catastrophes“ and if it was characterized this way by your agent, you might consider getting a new agent.

ACA compliant catastrophic coverage is a higher deductible policy that includes essential health benefits and preventative services. Not everyone is eligible and coverage is not available everywhere, but someone looking for high deductible coverage should consider it. pB4uski has shared his experience and knowledge of how that coverage compares with the meto level policies. You can also find some detail here https://www.ehealthinsurance.com/health-plans/catastrophic-insurance