Bronze May Be the Most Precious Metal Under Obamacare

BRONZE MAN

Bronze: Good for statues. Good for Obamacare?

Note: This article is intended to give you a framework for how to evaluate different ACA plans. Based on the plans available in your state, your results may be different. This framework is based on the initial plan released by California in June, 2013 and is illustrative.

Up until now, health insurance has been an issue of great concern for people who looked to change their jobs or potentially retire before age 65, when they were eligible for Medicare. With the passage of the Patient Protection and Affordable Care Act (PPACA), portability of and accessibility to health insurance is supposed to go away as a concern, since you cannot be denied health insurance coverage, and there will only be four factors included in determining your rates (not provided in any sort of order):

  1. If you’re single or have a family
  2. Where you live (to make cost of living adjustments)
  3. Age
  4. Tobacco use (it’s nasty, so stop using it)

In its place is a supposedly simpler way of choosing healthcare. You get to choose from one of four (or five) types of plans. More on that in a bit.

Previously, depending on the coverage you had (or didn’t have), you could still face high medical costs. You didn’t want to be the one who had to have super expensive medical treatment lasting years and go bankrupt in the middle of your care, forcing you to move to Albuquerque and start selling meth (for those of you who think I’m encouraging you to become a drug dealer, this is a reference to the show Breaking Bad). So, as a result of the fear of the blackest of black swans (aside from outright death) hitting you, you were (and maybe still are) tempted to get the Cadillac of healthcare plans.

If you have such a plan, you’re almost completely cost insensitive. You probably think that a blood test, X-ray, and prescription all cost $10 – your copayment. At this point, you remain willfully blind to the true costs of your medical care because Monkey Brain wants to justify your spending on the Cadillac plan (“MAY GET HIT BY BEER TRUCK AND NEED TO DRINK BEER THROUGH STRAW!”). Plus, he’d rather go through pain one time – paying the health insurance premium, no matter how high – than go through multiple sets of pain in paying for treatment as needed.

This cost insensitivity also encourages you to avoid preventive treatment, since you can hop over to the doctor or the emergency room at any old time and get that sneeze checked out. By paying so much for health insurance, you run the risk of becoming complacent about your own health, since you’re tempted to abnegate the responsibility for your own care and hand it over to your doctor.

With the 2014 implementation of the Patient Protection and Affordable Care Act (PPACA), I expect one of the consequences to be that many employers who have 25 or more employees will choose to pay the fine for not providing health insurance, bump up pay of their employees slightly, and allow employees to choose their own health plan. Even though at my last company, we had a high contractor to employee ratio, we often had enough people receiving checks from us that if we were to convert them all to employees, we’d fall under the auspices of Obamacare, and that’s the choice I would recommend we make were I in that position.

If you buy your own health insurance now or are going to be buying your health insurance in the future and are going to have to go out onto the healthcare exchanges rather than having a grandfathered plan, you’re going to be facing a new realm of choices for what types of insurance plans you can buy. You’ll be asking yourself:

Which Obamacare plan should I choose?

The plans (bronze, silver, gold, and platinum) reflect an effort to share costs between insurer and insured (that’s you). The table below does not reflect discounts for people below 400% of the federal poverty line (as of 2013, for the lower 48 states and DC, it’s $45,960 for singles, $62,040 for a married couple with no kids, and $94,200 for a family of four), and it does not include the catastrophic coverage option.

Plan Type Expected Cost Share
Bronze 40%
Silver 30%
Gold 20%
Platinum 10%

If you want to see the actuarial discounts for people below the 400% federal poverty threshold, check out the Kaiser Family Foundation PPACA actuarial analysis, page 2.

If you stop right there, though, you’ll be tempted to believe that you could be on the hook, for example, if you chose the Bronze plan, for 40% of your overall health costs.

You’d be wrong.

Regardless of the plan that you choose, as it stands now, your maximum out of pocket cost for health care, aside from your insurance premiums, will be the federal limits for high deductible healthcare plans (HDHP). In 2014, the limit will be $6,350 for singles and $12,700 for families.

Since everyone’s out of pocket maximums will be the same, regardless of the plan they choose, unless each state decides to change the limits for higher plans (such as California has done with Platinum plans) the math of choosing the plan becomes relatively simple, assuming that you have all of the proper information – namely, how much your healthcare would have cost if you didn’t have insurance covering you (note, this lack of information will make it very difficult for people to make informed decisions).

The way that the insurance companies will get to where you’re sharing the actuarial cost based on your plan level will be through deductibles, copayments, or both.

Therefore, the total cost estimates are simply a factor of premium + expected co-pays/deductibles where expected co-pays/deductibles won’t exceed your out of pocket maximum. If you have high healthcare costs each year, then it will seem to make almost no sense to get anything except a Bronze plan (or, if you qualify, catastrophic coverage plan) because you would hit your out of pocket maximum regardless of what type of plan you choose, so why pay the extra premiums? Of course, if your state lowers the out-of-pocket maximum for a Platinum plan (like California does), then you’ll need to do the comparisons. I’ve done a comparison as an example below.

On the other end of the spectrum, if you’re healthy as a horse and never go to the doctor, then you’d also want to get the highest cost share plan you can get (catastrophic coverage, if you qualify, or Bronze), because, barring an unexpected event – hence catastrophic coverage – you won’t pay the medical profession for any of their services. Thus, why pay the extra premiums for coverage that you don’t need?

Somewhere along the spectrum of medical care spending, there may be a sweet spot for each type of plan. Unfortunately, there are currently no calculators for estimating premiums aside from the Silver Plan calculator at the University of California Berkeley. California has released their standard plan co-pays – there are no deductibles apparently – for each of the plans as well as sample premiums that each of the insurers will charge (see p. 5 for the standard co-pays). Let’s assume you live in California’s Region 1 and are a 40 year old male to see what the costs are using Anthem’s PPO (the cheapest option).


Continues Below


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Plan Type Expected Premium
Bronze $234
Silver $309
Gold $376
Platinum $436

The difference between Bronze and Silver is $75 a month. Depending on what service you receive, you’re paying between $5 and $50 less per visit, except for lab testing and X-rays, where you’re paying a percentage co-pay in the Bronze plan versus a fixed dollar co-pay in the Silver plan.

Coverage Category Bronze Silver Gold Platinum
Preventive Care Copay (1 visit/year) No Cost No Cost No Cost No Cost
Primary Care Visit Copay $60 for 3 visits $45 $30 $20
Specialty Care Visit Copay $70 $65 $50 $40
Urgent Care Visit Copay $120 $90 $60 $40
Emergency Room Copay $300 $250 $250 $150
Lab Testing Copay 30% $45 $30 $25
X Ray Copay 30% $65 $50 $40
Generic Medicine Copay $25 or less $25 or less $20 or less $5 or less
Max out of pocket $6,350 for single; $12,700 for family $6,350 for single; $12,700 for family $6,350 for single; $12,700 for family $4,000 for single; $8,000 for family
Monthly premium, region 1 minimum, 40 y/o single $234 $309 $376 $436
Annual premium $2,808 $3,708 $4,512 $5,232
Difference from next lowest plan   $900 $804 $720

Thus, you’d have to go to the emergency room more than once a month but not so much that you’d hit your out of pocket cap ($6,350 per year) for it to make it worthwhile to get a higher level of coverage. Of course, lab tests and x-rays are a wild card, but how many of you get that many tests and x-rays but wouldn’t hit the spending cap? I doubt I’d see many hands raised.

What about the person who would normally hit a spending cap? Which is better? Bronze or Platinum?

Since you, as a 40 year old male living in Region 1 in California, are going to spend at least $6,350 on your out-of-pocket costs, the calculation winds up being pretty simple.

  • Bronze Plan. You’ll spend $2,808 on your annual premium and $6,350 on your out of pocket expenses for a total of $9,158.
  • Platinum Plan. You’ll spend $5,232 of your annual premium and $4,000 on your out of pocket expenses for a total of $9,232.

The winner in this case is the Bronze Plan, costing $74 less than the Platinum Plan. The reduced out of pocket expense does not justify the increased premium. The instances where getting a Premium Plan are justified are pretty rare – for example, only having between 17 and 26 emergency room visits in a year and nothing else.

I don’t know how each state’s premiums are going to emerge, but I’m willing to hazard a guess that in most (if not a high percentage of) cases, it’s going to be more economically viable to buy the Bronze plan and work to save up a pot of money for out of pocket expenses. Furthermore, the Bronze plans will qualify as high deductible healthcare plans (HDHP), so use health savings accounts (HSA) to sock away the money for out-of-pocket expenses.

While this year, we’ve already had two MRIs, a spinal tap, and a knee surgery, meaning we’d have probably already hit our out-of-pocket maximums, this year is an exception rather than the norm.

Ask me how much we would have spent out of pocket with no insurance in any other year, and I’d give you a blank stare with my mouth gaping open like a fish going after a tasty worm. Aside from people who already have HDHPs and HSAs, I imagine the question of actual costs for any given family would evoke a similar response.

Do you need to go back and do a whole bunch of forensic work and harass your doctors, pharmacists, and hospital administrators for information back to when you were knee high to a grasshopper? No. I don’t recommend it.

Here’s what I do recommend if you’re going to have to purchase health insurance through an exchange in 2014 after the implementation of the PPACA (or, pejoratively, Obamacare):

  • Save money so that you have enough to cover out of pocket expenses. The worst that could happen is you do get hit by the beer truck. You already know what your maximum out of pocket cost will be. Plan for it. If you don’t have to spend it, whoo whee! Roll it over into the next year and keep saving.
  • Start out with a Bronze plan. Again, once your state rolls out their premiums, you can calculate what your absolute maximum out of pocket expense is going to be. Then, track your spending. See how much more (or less) you would have spent had you purchased another plan. If necessary, change in the future, but also look at your medical care needs in 2014 compared to previous years to see if it was an outlier or if it was truly representative.

Monkey Brain is going to bristle at going with what he perceives as less coverage. He’s going to feel like you’re walking out on a tightrope with no net, particularly if you’ve had a more comprehensive plan that didn’t require you to pay much in out of pocket expenses for your health care. The reality of having a Bronze Plan (or any plan under the PPACA) is that there will be a safety net – your maximum out of pocket expenses for a given year. If you have sufficient assets, then the bigger financial risk is overinsuring for the illusion of peace mind. That additional peace of mind isn’t necessary in a higher tier plan because, if you have sufficient assets to self-insure the out-of-pocket maximum, you won’t need the lower co-pays provided by the higher tier plans.

Remember the example of the 40 year old male in Region 1 in California. In his best-case scenario, he never went to the doctor. By choosing a Bronze over a Silver plan, he saves $900 per year. A disaster scenario would be having only one lab test costing $9,071.43, requiring him to pay his out of pocket maximum under the Bronze plan but only $65 in the Silver plan, leaving him, overall, $5,450 worse off.

I see no reason to try to insure for the far extreme edge cases of medical need under the PPACA plan structures given the limit of damage for the worst cases. Why pay $900 (or $2,424 in the case of upgrading to a Platinum plan) a year more for an extremely low probability outcome that has a limited downside?

The purpose of insurance is to protect you from catastrophe. The limits of financial catastrophes, at least based on the premiums and rate structures for Obamacare released by California, mean that it’s not worth paying the additional cost for coverage for the bizarre set of circumstances that would justify getting the additional insurance.

Based on what I’ve seen, smart money is going Bronze.

Don’t forget to check out the companion pieces “How the Obamacare Subsidy Threshold Could Make You Pay a Lot More for Health Insurance” and “Is Obamacare Viable for Early Retirees?”

What do you think about what’s coming down the road with Obamacare? Does it make you feel better or more concerned? Have you even thought about it up until now? Let’s talk about it in the comments below!

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The Winning With Money course offers 20 lessons, 8 worksheets, and several exercises designed to provide you with the answers you need to have certainty in your financial life. Stop spinning your wheels and take action!

About Jason Hull

Jason Hull is a Fort Worth financial advisor. Before becoming a Fort Worth financial planner, Jason co-founded, built, and sold a software development company. He is a CFP candidate, has a MBA from the University of Virginia, and a BS from the United States Military Academy at West Point. He is the owner of Fort Worth financial advisor Hull Financial Planning.

Comments

  1. Looking at it all, I would say your best bet is Silver though given the fixed rate, the ability for some wiggle room (Looks like after 3 primary care visits on bronze in a year and your SOL) Silver wins in a lot of respects, not one extreme, or the other, especially for those that hitting the out of pocket max would be a crushing financial situation

    • Hi Jason–

      Thanks for commenting!

      I have to disagree with the Silver conclusion. After 3 primary care visits, you’re still $855 better off for choosing Bronze than Silver. You need to account for the total premiums as well as additional co-pays. Also, aside from Platinum, the out of pocket maximums remain the same. Bad health shocks will be a hit for any of the plans.

  2. Will I be able to use my Medical Savings Account money to increase my savings by making my monthly premium costs essentially tax free?

    • Hi Neal – if I understand your question correctly, you’re asking if you can use money in your MSA or HSA to pay insurance premiums. In general, the answer is no. See IRS Publication 969 for more. There are four conditions under which you can use your MSA or HSA funds to pay premiums:

      1. Long term care insurance
      2. Health care continuation coverage (such as coverage under COBRA).
      3. Health care coverage while receiving unemployment compensation under federal or state law.
      4. Medicare and other health care coverage if you were 65 or older (other than premiums for a Medicare supplemental policy, such as Medigap).
      • Thank you very much for your answer.

        I was not sure if this had changed under ACA.
        Make a nice bone for some taxpayers.

        BTW, we support ACA although my wife and I are both vets and with my other health insurance relatively unaffected.

        We both work with severely disabled children.
        Although education and health care are expensive, ignorance and illness are far more so.

        Besides, it is not as if health insurance companies exactly distinguished themselves.

        Regards,
        neal

  3. I’m 27 in Los Angeles but looking at having to get heart surgery within the year what plan makes the most sense?

    Thanks Jason!

    • Keith – I’m sorry to read of your situation. Unfortunately, that’s not something I can just answer in a comments section of a blog post without a lot more information. If you want to contact me, we can set up some time to discuss your situation.

  4. Thank you for your thorough analysis. It makes so much sense that the real importance is the OOP maximum which is the same for all medal levels. You either pay extra in the monthly premium or you pay extra in copays/deductibles. The unhealthy will end up with a comparable cost under all medal levels but the winners are the healthy that get the bronze. So yes, bronze is the precious medal!

  5. Great article! The company I work for compares their employee plan to the Bronze.

  6. Thanks for the useful analysis. One thing, unless I missed it (and I did skim a few sections) is missing the analysis of the tax consequences of each premium choice. A large number of people who are buying insurance themselves are self-employed. Self-employed people can deduct 100% of their premiums from their taxes. Depending on your tax bracket, that deduction can be significant enough (I think) to shift what makes sense in choosing a premium level. Is there any comment on this?

    • Hi Bob–

      Based on my reading of the IRS notice regarding the ACA, nothing really changes from a tax perspective. I don’t think that you could both deduct the cost of the premiums and then claim a credit as well.

      Then the analysis comes down to whether or not you’d pay more with a higher plan that then allows you to reduce your after-tax out-of-pocket expense. I suspect it’s still going to wind up being the same, as you’re only saving (1 – your marginal tax rate) * (difference in premiums). So, the difference would be a little less, but probably not enough of an out-of-pocket difference to change the outcome, particularly when you incorporate the potential long-term benefits of having a HSA via a Bronze plan.

  7. risk share- not insurance says:

    this is a great info source. I learned a lot about this program.. unfortunately that largely consists of a conclusion that the ACA is ACTUALLY a ‘risk sharing program’ for poor people who cannot afford to ‘risk share’ – not a issue of insurance coverage.

    The working poor with ACA coverage dont have the diposable 6k/yr. to ‘risk share’ with, so even those with ACA coverage have something that they cannot use because they will get hit with a giant copay.
    The end result will be people with giant deductibles who “on paper” have insurance coverage, but in practice cannot get care or treatment because thye dont have 6k in co-pay funds.
    This program actually DETERS claims or care, due to the giant copays, which is undoubtedly what the lobbyists who wrote the law intended to bring about. Revenue windfall from people who cannot themselves afford to make medical claims

    • Thanks for commenting! I suspect that young people will do just that – they’ll pay the penalty and only apply if they are facing a major medical cost.

      There are people who will, because of the tax credits, be able to enroll, as they’ll only pay the co-pays, and there are some free preventive health services in the plan. There are also some cost-sharing benefits at below 250%, but it’s not going to be free except in a small percentage of cases.

      I’m not going to comment on whether or not the PPACA is good, as this isn’t a political article, but I do believe, as you mentioned, there were some unintended consequences of this act. They may get discovered and then ironed out in implementation guidance.

  8. Jason – As a semi-retired CPA looking at coverage and cost options, I have independently come to the same conclusion as you. But you are the first I’ve seen promote this concept. I am self-employed for purposes of deducting premiums and with deductions for a retirement plan and Bronze HSA contributions, will keep my income under the 400% threshold thus qualifying for the premium subsidy.

    I’ve worked out the after-tax cost of the Bronze vs. Silver plans using an average of our last two years co-pays and out-of-pocket expenses (we already have HSA coverage) and as you note, with equal out-of-pocket maximums for all plans, in our situation the HSA wins every time. The other key is in being able to deduct your co-pays and out-of-pocket costs via the HSA/Bronze plan while virtually no one with the other plans will be derive any tax benefit by inlcuding those same costs as an itemized deduction. Good work to realize this and advise your readers of something that goes against the normal thinking process!

  9. Am I wrong in my understanding that regular preventive care benefits (annual physical, colonoscopy, blood pressure, cholesterol, diabetes, cancer screenings, mammogram, etc) are covered 100% with no deductible or co-pay and so the annual out-of-pocket maximum may not be a real “issue” for most people — unless or until they face a more severe and costly health crisis (major surgery, hospitalization, etc)? Because it seems to me that people are up in arms over cost that may rarely be an issue beyond a monthly premium. In other words, my annual physical (preventive) is 100% covered so I owe no co-pay (if deductible is met), nor do I pay full pop (if deductible is not yet met). And so on ….

  10. Max Alexander says:

    I don’t think this analysis holds up. You do mention that labs and X-rays are “wild cards” but you don’t elaborate. The truth is, those wild cards can throw the odds off a bronze plan routinely. The difference between bronze and silver premiums is $900 annually, but bronze members pay 30 percent of lab costs (vs just $45 a pop on the silver plan). An MRI can cost $3,000 and they do those for almost anything these days. So a bronze member could very quickly pay that $900 difference in premiums just with deductibles on a few routine lab tests. They’ve already paid as much on an annual basis as people with a better silver plan (factoring in all the money they just spent on lab work that the silver people didn’t)–and yet they’ll still be paying through the nose for anything else that happens all year. This is hardly an unusual scenario, or some major disease or accident; it’s quite routine in typical ER work.

    • Max – Thanks for commenting! I appreciate it!

      16% of adults 18-64 with private insurance will have one ER visit in a year (see p. 43). Most lab work is under $100, and, unless you’re looking at specific arterial X-rays, most of them cost a few hundred dollars. You’d still need several common X-rays before you hit a breakeven. How many people get that much lab work or X-rays in a given year? How many of them go from a very small number to a much higher number in one year? I still posit that, for a large majority of people, Bronze will be a better plan, although, as you so well argue, my idea of a large majority might need to shrink a little, but, in general, those are still relative outliers.

      Someone who’s more injury or sickness prone could look at a higher tier of coverage. They could also change tiers in a subsequent year.

      Still, I think that if you’re under a HDHP plan of any type, you’ll be more aware of the costs and will negotiate more. Medical service costs aren’t set in stone.

      Thanks again for the thoughtful comment. I really appreciate it!

      • Max Alexander says:

        Thanks for responding, Jason. It’s actually pretty hard for patients to negotiate fees for lab work and X-rays. To whom would you direct your query on pricing? Not the clinician who is positioning you on the X-ray table, generally your only personal contact with the service provider. It’s one thing to shop around for scheduled non-emergency surgery like a minor hernia repair, although even there, good luck getting a straight answer. This brings up another important issue with the ACA that I have not seen addressed by any pundit: What kind of negotiating power will the new non-profit health co-ops have with hospitals and doctors? This is important because patients will be bearing much more of the cost out-of-pocket. Those costs can vary dramatically depending on the rate negotiated by the insurance company. So while I would love to support one of the new nonprofits instead of giving my money to Anthem Blue Cross and Gulfstream pilots, I worry that a nonprofit will not have the clout of Anthem in the marketplace, and I will end up paying more for the same services. No one I have talked to, including my insurance agent, knows the answer to this vexing issue. It’s yet another reminder that the whole thing is just so needlessly complicated compared to universal healthcare.

        • Some you should be able to negotiate. I knew I needed a knee MRI when I tore my ACL and meniscus. My wife recently had an x-ray for a benign lump. Those are important but not urgent. I still posit that most people won’t find themselves in the urgent and important situation in a given year.

          You are right in that there’s not a negotiating organization to get bulk rates down. I think, over time, because there’s a need, one will emerge. By then, though, who knows what the ACA will look like?

          • Max Alexander says:

            Perhaps, but for most people the idea of haggling with a doctor is even more distasteful (and often impossible) than haggling with a car salesman. On its face it’s just so obviously a bad way to deliver healthcare. The free-market proponents who think shared costs will magically bring down prices in healthcare are either delusional or (more likely) lying to protect powerful business interests. The reason medicine costs far less in Europe and Canada is because the government (i.e. all the people of the country, functioning as one huge customer base) sets the prices, not because individual citizens bargain with doctors in waiting rooms.

  11. congratulations, you got the health care plan you voted for in the last election !!!!!

  12. Jason, you are right on and virtually 100% correct in your analysis. The only thing I saw missing was the deductible, if any, for the plans you listed. This would come into play in determining if there is any “sweet spot” in any of the higher cost plans. I should add that for older persons (around age 55 and up to 64) there is almost never a “sweet spot” or if there is one it is for a very narrow range of medical expenses. For an older person if you are never sick, you want the bronze plan. Similarly, if you are very sick, you want the bronze plan. Better yet would be the catastrophic plan, if you qualify, for either the sick or well person. The reasons why things work out this way are threefold: the ACA limits the maximum out of pocket expense to a very low number ($6350), AND the ACA limits the ratio of the premium cost between oldest and the youngest to 3:1, AND, as you point out, your total maximum cost on an annual basis is simply the sum of your premiums plus the out of pocket maximum. Co-pays and deductibles only affect when your maximum out of pocket is reached. If I haven’t lost you so far read on for my wife’s real life example as she just received her cancellation notice.
    While my wife’s old plan from Blue Cross/Blue Shield was better for her than anything offered through the exchange it was cancelled due to not meeting all of the ACA requirements. A summary of what is available to her now, through the exchange, is as follows:
    Bronze: Monthly premium – $597.00, $4400 deductible, $6350 maximum out of pocket.
    Gold: Monthly premium – $947.67, $150 deductible, $5100 maximum out of pocket.
    If never sick, bronze will save $4200 annually. If very sick, bronze will save $3000 annually. There is a “sweet spot” between $8000 and $10500 of total medical charges where the gold plan would result in an annual savings of approximately $300 but who would want to risk the huge savings available to potentially gain $300 only if they could accurately predict their medical expenses for the following year. Jason makes this point well.
    You can determine your “sweet spot”, if any, using some basic algebra or by plotting total medical expenses (premium plus medical expense before insurance applied) on the X-axis and out of pocket expenses (premium plus co-pays and deductibles) on the Y-axis.
    One other significant point: As good as the bronze plan is, the catastrophic plan is even better. In my wife’s case the catastrophic plan had a premium of $454.83, $6350 deductible, and $6350 maximum out of pocket. When plotted against the gold plan there was no sweet spot. The catastrophic is better regardless of how many medical expenses there are and regardless of their type. Even more significant is that to qualify for the catastrophic plan your premium for the cheapest plan under the exchange (in my wife’s case bronze at $597 per month) must simply be less than 8% of your adjusted income. In our case, that would be under $89,550. I am retired, as is my wife, and we can easily manage our AGI to be under that amount. Many other older persons will be able to as well. This fact is not well known or advertised but is an important one for people in their late 50’s or early 60’s.
    Will gladly answer questions or clarify anything stated above.

  13. Mark Trexler says:

    Thanks for this article. Best I’ve come across in terms of providing real analysis. I’ve been looking for an actual calculator on the web based on real (albeit average) risk numbers to compare different plans, and have found absolutely nothing. Perplexing since it wouldn’t be that hard to put together.

  14. I’m going with the second lowest bronze plan (only because it is only $3 more/mo than the lowest and does cover (limited) child dental. When doing the math, it doesn’t really seem to ever be a good idea to go with a higher plan (except maybe for self-employed for tax reasons) because if you add the premiums + OOPM (out-of-pocket max) of the lowest bronze and then pick a higher plan and add those premiums plus the lower OOPM (my choices do contain lower OOPM’s), almost every time I’ve done it the plan with ‘better coverage’ that costs so much more per month comes out to a HIGHER # than the bronze. Plus another thing to consider is a HSA – higher plans aren’t eligible and not only does that $$ put into the HSA lower tax burden and all the other benefits of an HSA, but it will also increase your subsidy or get you down into the level to get one, if you’re right on the line. So I very much agree with this article!

  15. Great Article! ALL my labwork is over 500! I have been self pay, any GYN visit, or even CBC, women’s lab work is MUCH more annually.

    With that said, what would you suggest for a 45 yo woman who is NOT working/unemployed because of health reasons, and below the income minimum of $11,490 required to get the subsidy-and does not qualify for Medicaid because she has an IRA? There is a very critical hole for anyone with assets that is sick! She needs monthly/bi-monthly visits and probably 100-200 in medication a month, which would = around 300+ every month or two.

    Health insurance was suppose to prevent someone from losing everything they own if they get sick. It appears to me, if someone has an IRA / House, gets sick, can’t work, can’t pay the full premium, then they are SOL?!

    Do you have any suggestions? I will probably go with the Bronze and withdraw the required amount from the IRA (inherited) and pay the taxes to get the subsidy? So complicated!!!!! Between taxes, and now this….

    • Hi Grace–

      I’m sorry to read of your situation and hope your health will improve.

      There are a couple of options:

      1. Draw down the IRA to get to the asset limit and pay the early withdrawal penalty/taxes. You could also take a hardship withdrawal (search for hardship on the page) and avoid the penalty.
      2. Use a Miller/Medicaid trust. Nolo has an excellent article on your options here.
      3. Convert the IRA assets to an annuity. This may affect your income, and hence, your Medicaid eligibility, so run the numbers before you make this decision. Lorman’s guide can help you with what you need to look at.

      I hope these give you some clarity.

  16. Hi there. I have a very simple question as to what you think would be my best option. I’m a 40 year old male living in FLORIDA. I make maybe $7500 a year. Yes…seven thousand five hundred not 75,000. I take a medication for depression but that’s all. I haven’t had a check up medically in 18 years. What is the best plan for me?

  17. What type of plan under the bronze should one pick in the event that he have to visit the ER? Last I check, the hospital near me don’t take blueselect , Aetna, mycigna. That leave bluecare, blueoption for selection but how would I know that the hospital doctor will accept those two plans?

    • John–

      You have definitely found one of the major shortfalls of the ACA plans – little or no out-of-network coverage.

      I’d call the nearest hospital and find out what plans they do accept. The ACA plans should all have the same basic coverages, so it will come down to comparing price and what is and isn’t covered after you determine what plans the hospital will accept.

      Another option is to find a local navigator by going to https://localhelp.healthcare.gov/.

      Best of luck!

  18. Thank you Jason. You succinctly describe what it took me a couple of spreadsheets and lengthy periods of head scratching to try to figure out. I wish I had found this article before I went through that. Again, thank you!

    • Glad to help! You’d think by now, there’d be a good and accurate spreadsheet or quick computer app that would help you solve these questions.

  19. Mark Anthony says:

    My 27 year old daughter has monthly pharmacy prescriptions of approximately $300. Her annual income in below $5000 but Virginia has opted out of Obamacare. I’ve been paying for these expenses. Which plan would you recommend for her?

    • Hi Mark – She can buy it on the national exchange at http://www.healtcare.gov. I’d recommend a catastrophic plan. Any way she can move to another state? Or get more income? She’s below the Medicaid threshold in Virginia, so doesn’t qualify for the subsidies.

  20. I came to the same Bronze+HSA conclusion. If I blow through the $6350 OOP max then having the lower premium matters. If I’m completely healthy then having the lower premium matters. The HSA is tax advantaged gravy and it rolls over year by year.

    It is a matter of cash flow.

  21. Jason,

    Are your assuming, or do you know for certain that the coverage ( for procedures, drugs, facilities, etc) are identical across the various “metallic” plans within a given insurance provider, and that the only variables are costs (premium, copay, deductible, coinsurance, etc) to buyer?

    • Hi Dave–

      Thanks for commenting!

      Looking at Covered California, which I used as the example in the article, there doesn’t appear to be any difference in the coverage. This chart summarizes the coverages and costs and doesn’t call out different levels of coverage for different metal plans.

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