It’s that time of year again…
Yes, the holiday season but ALSO the dreaded “Open Enrollment” for medical insurance. That time of the year when you put off this line of the to do list because it’s just too confusing, overwhelming and irritating. The time of year when you start asking all your family and friends what they are doing for medical insurance or benefits. That time of year when you start reading the fine print and want to bang your head in bewilderment. Hopefully I can help elucidate things a bit today.
Medical insurance is important to be there in case of unexpected expenses such as surgery, accidents or injuries. Unfortunately health insurance has changed over the years and has become something it was never supposed to be. Instead of being like your car insurance or homeowner’s insurance, the minimum coverage requirements have caused insurance to be impossibly expensive. Imagine if you expected your car insurance to cover gasoline fill ups, oil changes, new tires, wipers and transmission repairs. You can imagine that your car insurance would suddenly become prohibitively expensive. Imagine if your homeowner’s insurance had to cover the cost of new carpet, window repairs, minor plumbing leaks etc. Your homeowner’s insurance premiums would be incredibly high. This is what we have done to health insurance. Instead of covering large, unexpected expenses we have asked it to cover predictable and minor expenses, causing monthly premiums to skyrocket.
What is missing in the marketplace is a “catastrophic policy” where primary care is the individual’s responsibility and there is a cap on out of pocket expenses in case of emergency. So a person would pay for their doctor’s visits and even specialist visits but if they got into an accident, everything over a certain amount would be covered. This is similar to how your auto insurance and homeowner’s insurance already work. Big, unexpected expenses are covered and you have to shop around for the best deal on tires and windows. This catastrophic plan is as mythical as a unicorn right now but if the required minimum coverage laws are changed and insurers are allowed to actually write insurance again, this product may again exist. Time will tell. For now, WHAT DO WE DO???
You have three choices:
1. Go “bare” without medical insurance
2. Term Policies
3. Health Sharing Ministries
1. Go Bare
Going without insurance is unwise but some are forced to do it out of necessity and inability pay the high monthly costs of premiums. If you choose to go “bare” make sure that you have a safety net in place of a primary care provider who can take care of your needs, provide you with clear, transparent pricing and give you quality customer service as well. And make sure to contribute to a bank account dedicated to medical savings, where you squirrel away some money for an accident or injury which is unexpected. It doesn’t matter whether this is an HSA, FSA or other tax advantaged account. Just put some money somewhere just in case.
What about the penalty? At this time there is still a penalty in place for those choosing to go without insurance. Click here for the details.
Rather than explain the nuances of each family situation, click here for an online calculator which can estimate for your particular specific circumstances.
So we have established that medical insurance is important and at this time legally mandated but we still haven’t addressed the fact that it is so darned expensive and premiums are increasing all the time. In Delaware in 2018, you have a choice of Highmark Blue Cross/Blue Shield or Highmark Blue Cross/Blue Shield. Nice choice, eh? And if they want to raise premiums 30% they can do that because there is no competition in the system anymore. Are you mad enough yet? To purchase insurance through the Exchange, click here.
By far one of the most common questions about Obamacare is:
what are the alternatives?
Obamacare is traditional medical insurance. They are required to cover many aspects of health which is the “minimum essential coverage.” Unfortunately, including all these things in the policy makes it expensive and premiums are constantly increasing. Alternatives include short term health insurance (“Term Insurance”) and Health Sharing Ministries
2. Short Term Health Insurance
“Term health insurance” is something that is offered for shorter terms, often 6 or 12 months and can be issued very quickly. However, you can’t wait until you have a problem to sign up because they often have clauses where they do not accept pre-existing conditions. This is to avoid people discovering they have a condition and then signing up for insurance, which also contributes to making insurance expensive. Insurance industries are based on distributing risk from both health and sick, or people with needs and people without needs and having some healthy people in the pool to offset the expenses of the unhealthy is a necessary part of a financially healthy insurance plan. This is also part of what is going wrong with Obamacare right now in that only the sick are signing up and the healthy are choosing to pay the penalty.
Pros of term insurance: more cost effective than Obamacare with premiums generally 1/3-1/10th of Obamacare’s monthly cost
Cons of term insurance: does not cover some pre-existing conditions, still have to pay penalty at this time, short term 6 months to 1 year, they can choose not to renew you
Click here for Agile Health Insurance where you can get specific quotes for term insurance without having to input your personal health information.
United Health One
3. Health Sharing Ministries
Health sharing ministries are not insurance in the traditional sense but are organizations where individuals and families can sign up for significantly cheaper than Obamacare premiums with excellent coverage for preventive and unexpected expenses as well as specialists and prescriptions. They are cost sharing organizations which basically means that the members pay each others’ bills. It sounds simple and indeed is. CLICK HERE for a video on how health sharing ministries works.
Individuals are generally around $200 a month and families are around $500 per month. Numbers are estimate. Please refer to individual pages for specific pricing for yourself or your family. Health Sharing Ministries are faith based and ask for their members to be Christians and thus are qualified as a religious exemption and you do not need to pay a tax penalty for their services even though they are not traditional insurance. They cover most expenses over a deductible usually $300-500 so this is much lower out of pocket expenses than most other plans.
Pros of health sharing ministries: no penalty (religious exemption), more cost effective than Obamacare, low deductible
Cons of health sharing ministries: faith based (not universally applicable to all people), less private (health information is shared with other members)
Providers for Health Sharing Ministries:
Samaritan Ministries CLICK HERE
Christian Healthcare Ministries CLICK HERE
Liberty Health Share CLICK HERE
Medi-Share CLICK HERE
Altrua Health CLICK HERE
Some of these websites also have some good videos on how health sharing works.
One of my favorite articles comparing the various health sharing ministries is CLICK HERE.
Small Business Owners
In some ways, small business owners are hit the hardest with medical costs because they are trying to provide benefits for their employees but it is often prohibitively expensive to do so. Health insurance advisors are available locally who can help with this decision making and advise businesses on their options. If you need a new broker, please give us a call at 302-565-4799 and we can give you some of our favorites.
As a starting place for research, small business owners may login for free at AHIX.com which is a health insurance marketplace for small businesses. They can provide free quotes for insurance for employees.
Make the best choice you can
Though I can not provide all the answers regarding the right insurance for you, this blog post should give you some good fodder for research. My hope is that in the future competition will be re-injected into the marketplace allowing insurers to again compete for our business like Geico, State farm and Liberty Mutual do. At this point, all you can do is make the best decision for you right now from the options that you have. I am not an insurance advisor and this is not my field of expertise but I know that patients are desperate for answers and hopefully we have provided some for you today. Please feel free to comment below with additional input or questions.