Shoud You Buy A “Bronze” Plan Simply Because It Is Cheapest?


Photo by Jessica Rinaldi of REUTERS
Photo by Jessica Rinaldi of REUTERS

Yesterday, while I was doing my daily study about health insurance, I noticed something interesting.  Those who are living in denial about health insurance “Rate Shock” were dancing with joy when the proposed health insurance rates from Oregon were publicized.

They pointed at the cheapest plan, the “Bronze” plan, and said, “See, rates are not going to increase that much.”

Like a sea-captain, many on the left are committed to going down with the ship.

Obamacare is the law of the land.  On one hand, there is no longer any point in complaining about it.  Under the current law, every American, unless they are otherwise exempt, will be required to purchase a government approved health insurance policy for 2014 starting this October.

My fear is that millions of Americans are going to make their decision based solely on price.

The “Bronze” plan, that Obamacare supporters are referring to, is significantly different from most plans today.  While the “Bronze” plan is a significant benefit for those who are currently uninsured, it is a step back for those who have health insurance today.

Most, but not all, health insurance plans today cover 80% of routine health care.  The “Bronze” plan has only a 60% actuarial value.  That means that in the event of a severe accident or illness, you may have to pay almost twice what you would pay today out of your pocket for health care.

For huge medical bills (think cancer), it really makes very little difference which of the 4 metal plans (Bronze, Silver, Gold, Platinum) you elect.  Since the maximum out-of-pocket benefit is the same for all of them, you can count on paying $6250.

The doctor’s office co-pay benefits in all the plans will also be similar.

If you currently have an 80/20 plan and elect a “Bronze” plan, you will see the difference if you must have health care treatment in a hospital for something that is painful but relatively routine.

EXAMPLE

Until my doctor gave me a diuretic, my body created a kidney stone every couple of years.  The smaller ones naturally passed through my urine but they were painful.  The larger ones had to have surgical help to pass.

My current 80/20 health insurance plan only leaves me paying 20% of the hospital bill.  The “Bronze” plan would double the amount that I would owe to 40% of the hospital’s bill.

Please do not misunderstand what I am trying to say.  The “Bronze” plan will be a fine plan.  It is not my intention to make you think that it is worthless.

My intention behind this post is to encourage you to take your time when you buy your health insurance.

CONCLUSION

Don’t just buy the cheapest thing available to spite Obamacare.  Take the time required to review all of the benefits that the different plans offer. 

Whether you like it or not, you are going to have to buy health insurance.  It is the law. 

Since you have to buy it anyway, you might as well get something that meets your needs.

SUPPLEMENTS

Since none of the Obamacare plans will pay 100% of your bills if you get sick, I encourage you, regardless of which plan you elect, to supplement it with a Disability Income plan if you are dependent on your job for your daily income.  That way, your other bills will get paid while you are recuperating from an accident or illness.

There are some other supplements that I recommend in other circumstances.

If you have had a parent or sibling suffer from cancer, heart attack or stroke, you have an additional risk of suffering from one of those conditions.  I highly urge you to consider a Critical Illness insurance policy to go along with your Essential Benefit plan.

If you elect either the Silver or Bronze plans, I encourage you to consider both an Accident and Hospital Income supplement.  They will pay money directly to you to help with the additional out-of-pocket expenses you would incur with a Bronze or Silver plan if you were hospitalized or suffer an accident.  (However, by the time you pay the premiums for those two supplements, you might be just as well off paying for a Gold level plan.)

Building A Health Insurance Portfolio

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