Posted on 12/26/2013 11:47:21 AM PST by RKBA Democrat
Late yesterday the Obama administration announced that the millions of Americans who had their previous health insurance policies cancelled because they didn’t offer all the benefits required under Obamacare would be exempt from having to pay the tax for being uninsured, and would also be eligible to purchase what are known as ‘catastrophic’ health insurance plans.
Fans and foes of Obamacare are both weighing in with their take on this, and if you’re interested in hearing these opinions a quick glance at any news site will provide no shortage of commentary. I thought I’d offer something a little different, and talk about these catastrophic plans and how most people in them will be self-pay patients for most of their care.
Catastrophic health insurance plans were designed primarily for young people, with the idea being that the premiums would be more affordable but they would offer less coverage than the Bronze, Silver, Gold, and Platinum plans available on Obamacare’ exchanges. In fact, except for people given ‘hardship’ exemptions from Obamacare’s mandate to purchase insurance, only people who are under age 30 are able to purchase these plans.
The key feature of catastrophic plans is that they have a $6,350 deductible, pay for three primary care visits each year, and cover a variety of ‘preventive’ care such as immunizations. Other than that, people with catastrophic plans have to pay out of pocket for all other medical care until they meet the deductible, meaning most of them will be self-pay patients for all of their healthcare treatments.
In some regards the catastrophic plans aren’t all that different than the Bronze level plans available under Obamacare, most of which have deductibles in the $5,000 to $6,000 range and also cover three primary care visits and preventive care. Bronze plans may also have co-pays or co-insurance for some other services under the deductible.
The key difference is that because catastrophic plans were intended primarily to be filed with relatively young, healthy people, the premiums are fairly low compared to other options. I went to Healthcare.gov and checked out what premiums would be for a 29-year old seeking coverage in Fairfax, Virginia. The two least expensive options were both catastrophic plans, for $133 and $138 a month. The least expensive Bronze plan was $154 a month, with a $6,000 deductible.
I also checked out a few other areas where I’ve lived in the past. In Madison County, Iowa, catastrophic plans for a 29-year old start at $89 a month, compared to $131 a month for the least expensive Bronze plan with a $6,300 deductible. In Lincoln County, Oregon, catastrophic coverage is available for $131.86 compared to $145 a month for a Bronze plan with a $5,000 deductible.
So if you’re eligible for catastrophic coverage and aren’t sold on the idea of opting out of Obamacare and getting some alternative form of coverage, a catastrophic plan might be your best option. A few things to keep in mind, however:
Normally, pairing a health savings account (HSA) with a high-deductible, catastrophic-type of health plan is a great idea. Unfortunately, I didn’t see any catastrophic plans that are compatible with HSAs. I checked several states and did not find a single catastrophic plan that would allow people to put money into an HSA. If you were counting on tax credits through the Obamacare exchanges to help pay premiums, there are no credits available to those purchasing catastrophic coverage, only Bronze, Silver, Gold, and Platinum plans. Many, but not all, of the catastrophic plans I saw were HMOs, which tend to have the narrowest networks of all, meaning finding a provider who will take your insurance in the event you go through the deductible can be a problem.
Finally, two pieces of advice for the people who may be going from relatively generous comprehensive coverage to a catastrophic coverage plan.
First, while The Self-Pay Patient blog and book (available in e-book format on Amazon.com and Barnes & Noble at the moment, in paperback soon) most often describes and discusses things in the context of those without conventional health insurance, most of the providers, companies, web sites, and organizations featured here and in the book are just as beneficial to people with high-deductible or catastrophic plans. Bookmark the blog, and buy the book! It will be well worth your time and money.
Second, when seeing a doctor or having a procedure done, consider NOT letting the provider know that you have insurance. It can save you money.
This might seem odd, given that one of the benefits of insurance is supposed to be access to ‘negotiated’ rates that are typically lower than the ‘list’ price that is usually given to self-pay patients. But as readers of The Self-Pay Patient know, paying cash for treatment can often mean lower prices, at least if you shop for care.
Suppose someone with a catastrophic health plan needs a hernia repair surgery. I went to the web site Healthcare Blue Book to see what insurers are paying for laparoscopic hernia repair, and found that nationally the average is about $5,500. This is what someone giving their insurance card would pay for the procedure, because once you give a doctor or facility your insurance card, they are required to charge you that price.
However, if you go to the web site of the Surgery Center of Oklahoma, you’ll find that they offer hernia repair surgery for prices between $3,060 and $4,500. Depending on how friendly the local surgeon and hospital are to self-pay patients, it’s entirely possible that simply telling the doctor and hospital that you’ll be paying cash for your procedure and asking for a discount will get you a better price than if you give them your insurance card! If they don’t, plane fare to Oklahoma is probably less than the difference between the ‘negotiated’ rate and the cash price at Surgery Center of Oklahoma, or you might find a closer surgeon and facility using a web site like MediBid.
The drawback is that all or some of the cash price paid by you might not count towards the deductible. For most people that isn’t going to be too much of a problem, because they’re not going to get anywhere near their deductible.
The decision by the Obama administration to give ‘hardship’ exemptions to people having their existing plans cancelled, allowing them to purchase catastrophic health plans or avoid having to pay the tax for being uninsured, will almost certainly increase the number of Americans that are self-pay for some or all of their healthcare. This could lead to significant savings for many of them, especially if they understand how to get the most value for their healthcare dollars as a self-pay patient.
Oh, how wonderful. More band-aids for a dying socialist takeover plan.
Isn’t it great that a president can enforce, delay or just ignore laws?
A nation of laws?
A nation of socialist tyrant.
Writing the bills as we go along now, are we?
“Oh, how wonderful. More band-aids for a dying socialist takeover plan.”
Yup. But we’ll have to take what we can get. It’s not like the gop wing of the uniparty is going to actually end deathcare.
I found out that if the cheapest obamacare plan (bronze) costs more than 8% of your gross income, you are exempt. I qualify.
It’s kinda weird. If you make more than a certain amount, and don’t get healthcare, you are fined. If you make below a certain amount, you get subsidized. But if you are in the middle, you can legally have no health care and not be fined.
So everyone isn’t covered with Obamacare. But if you want to be, it will cost you a lot more than before obamacare if you are one of the producers.
No wonder they call it the Afordable Care Act. No, wait...
Yeah, what provision of the law passed by Congress and signed by him
allows him to do this?
How long will these exemptions last?
I mean you are, huzzah, allowed to buy catastrophic care by the grace of his wonder Obama and then just as you finally need it.... it gets canceled?
Publish BlogBooks.
For months, we have been told by administration network operatives and even by president TelePrompTer that these catastrophic plans were inferior, they were crap, they were trash. Now, the administration is putting out the word that the best this president's " signature" accomplishment can offer an American is an inferior, trashy or crappy health plan?
Our system of laws is now totally spontaneous.
Whatever ValJ is thinking when she hits the office that morning is the law.
No, no, no, you have it all wrong. Those health plans are inferior only if a Republican says they’re a good idea. ;-)
Obama is essentially repealing the law in effect with all of the late changes. It can mean anything to anyone at anytime for any reason. How is the IRS going to assess any penalties under this law? And, if they do, how do they justify it? The law? Really? Which one?
Amazing isn’t it? And not a peep from Congress!
“... It’s not like the gop wing of the uniparty is going to actually end deathcare.”
:::::::::::
Yes, they (GOP) are such useless bastards to the American people. Reagan is rolling over in his grave...along with Jefferson, Washington, Madison, Franklin and Adams.
The bronze plans are worthless;might as well toss the money out the window.
I HAD silver coverage free from my employer except obama/pelosi/scumbag dems wouldn’t allow the $25,000 annual cap ! So I either pay $200 monthly on top of my employer’s contribution )$200 that I don’t have to spare)or do without. And I make enough so the 9.5% rule for “affordable” btonze plan thru employer kocks in.That means no subsidy on the market.
I loathe Democrats.
“Isn’t it great that a president can enforce, delay or just ignore laws?
A nation of laws?
A nation of socialist tyrant.”
And isn’t great that congress allows it.
It’s hilarious that idiots are finding out there’s no “care” about it. Very many thought they were going to get free healthcare. Many will sign up for Medicaid. But they could have done that all along.
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