In October of this year every American who is not enrolled in another government sponsored health insurance program, must enroll in one of the government approved Essential Benefit Plans.
If you get your health insurance through your work, your group plan will make any required adjustments. If you are responsible for getting your own health insurance, you will be able to get one of the 4 “Metal” plans either on your state health insurance exchange or through a certified health insurance agent off the exchange.
Although I will not learn the final details about the plans until the middle of the summer, at the earliest, I have reviewed the basic outlines of the Essential Benefit Plans. What I find is rather alarming.
All 4 government approved plans have deductibles and co-insurance. All of them require you to pay up to $6250 out of your pocket before the insurance will pay 100% of your costs. The only difference is in how big of a medical bill you must have before you reach the out-of-pocket limit.
The new system is skewed to help those Americans whose household incomes are below the national poverty level. I am all for that, however, the largest segment of the “non-Medicare eligible” population do not live in poverty. Those who earn a pay-check will be penalized.
The amount of tax-credits you will get in order to subsidize your health insurance premiums is on a sliding scale. The more money you earn, the less you will get in the form of “subsidies.” (Click here for an estimate of the subsidy you would get.)
The average subsidy that is predicted for Americans who earn 1 – 4 times the federal poverty level is 40%. That means that if you are an average American who gets a federal subsidy for health insurance, you will still have to pay 60% of the increased premium.
If your household earnings exceed 4 times the federal poverty level, you will not get any “subsidy.” However, it is likely, depending on your age, that your health insurance premiums will still increase.
Many Americans who currently have an 80% plan will need to accept a 60% or 70% “Actuarial Value” plan just so they can keep their monthly premiums similar to what they are currently paying. Those plans are expected to have higher deductibles.
When the average American retires with less than $70,000 in savings, I am not convinced that the average middle-class American will have enough money in their “Rainy Day” fund to pay the larger deductibles that go along with those lower “Actuarial Value” plans.
I predict that supplements will become very popular among middle-class Americans when they see the holes that are left with the government approved Essential Benefit Plans.
1. Hospital Income supplements, like the one in the brochure above, are offered from several insurance companies. Many employers offer them as a “voluntary” benefit. That means that you are allowed to pay for the insurance through pay-roll deductions. As long as you pay the premiums yourself, any benefits you get in the future will not be taxed.
If your employer does not offer a “voluntary” plan, The Insurance Barn can help you obtain many supplements on an individual basis.
2. Hospital Income insurance is not the only supplement that will be available to go with your Essential Benefit Plan. If you have had a parent or sibling suffer cancer, heart attack or stroke, I encourage you to consider adding Critical Illness insurance to your Essential Benefit Plan.
You can add more if you want. It comes in very handy if you do not live close to a specialty hospital. Critical Illness insurance can provide enough money to allow you to pay for the extra room & board if you have to travel to another city for care and a healthy spouse has to stay in a hotel.
Fortunately, one of the nation’s foremost cancer hospitals is less than 10 miles from where I live. If you are able to stay close to home if you were to contract cancer but needed a specialty hospital, I recommend getting at least $7,000 of coverage. That way, you will have enough money to pay for all of your medical bills in the event you are diagnosed with cancer, heart attack, stroke or one of the other covered critical illnesses.
When it is compared with the cost of the Essential Benefit Plans, Critical Illness insurance is not that expensive. Click on the banner below to see how inexpensive it could be for you and your family.