For some across the nation, the Affordable Care Act (ACA) has rendered medical care less affordable. How did this result come to be? When you combine the cost of the monthly health insurance premium with the expenses that consumers still have to pay themselves, i.e., deductibles, coinsurance, copayments etc., many people do not see an immediate benefit from their insurance. That leads many to avoid going to a doctor since they will have to pay for it themselves out of pocket. This is why supplemental health insurance can be so important to so many people.
Unfortunately, putting off consulting a doctor until you are very ill can often result in medical treatment costs being even higher. What began as a minor ailment or condition can escalate over time to something more serious and costly to treat.
There are many reasons people need supplemental health insurance. Most often, supplemental health insurance can provide the safety net you need to assure that you have the full range of financial protection for many different types of injury and illness situations.
Understanding Health Insurance Costs
It’s important to understand that the total cost of health care insurance includes a number of factors:
- Monthly premium cost for health insurance
- Deductibles and copays when you actually utilize medical care
- Coinsurance that may kick in after you’ve met your deductible
The ACA has set out of pocket limits for what you can be are charged on healthcare expenses. The Department of Health and Human Services (HHS) in Washington, D.C., sets this maximum each year, and it increases every year. That means the costs and the gap in coverage for most consumers increases each year.
In the last 3 years, HHS has steadily increased the out-of-pocket maximums each year. Here are the numbers:
2021 Out-of-pocket Maximums:
$8,550 – Individual
$17,100 – Family
2020 Out-of-pocket Maximums:
$8,150 – Individual
$16,300 – Family
2019 Out-of-pocket Maximums:
$7,900 – Individual
$15,800 – Family
That’s an increase in the deductible in just 3 years of:
$650 for Individuals
$1,300 for Families
For helpful reference, here are definitions and more information on the terms deductible, coinsurance, copayments and maximum out-of-pocket spend:
Deductible: Before your health insurance company will begin paying for most health care services, you must meet your medical deductible. This deductible may be thousands of dollars. If you see a specialist and go to the hospital once a year, paying more each month for a health care plan with a lower deductible could reduce your overall out-of-pocket expenses during the year. If you are healthy and only use preventive services, which are covered 100 percent by your insurance carrier, enrolling in a lower-cost, higher-deductible plan could help your overall budget.
Coinsurance: After your deductible is met, you are not off the hook. You and your health insurance company will be paying “coinsurance.” That means your carrier is responsible for a percentage of the covered medical bills and you also are responsible for a percentage of the covered medical bills. If you have an 80/20 plan, for example, your insurance company will pay 80 percent of the covered medical expenses after your deductible is met, and you are responsible for paying the remaining 20 percent.
Copayments, Rx drug deductibles: Other out-of-pocket expenses include physician copays and prescription drug deductibles.
Out-of-pocket maximum: After you meet your deductible amount and you are paying your percentage of coinsurance, you may reach a maximum amount that you will need to pay for covered medical care before the health insurance company begins to pay 100 percent. This number is an important factor, especially if you have an unexpected serious illness or injury.
Bonus: these terms will also help you understand your health insurance company’s explanation of benefits (EOB).
High Deductibles Make It Difficult to Have Affordable Health Insurance
If you don’t have more than your deductible amount in the bank or some other type of savings, or you don’t have that much available credit on your credit cards, it’s understandable that you might put off medical care when you can. In fact, you’ve probably wondered: how will I pay my plan deductible when they charge so much money upfront?
In a Kaiser Family Foundation study it found that:
- About one-fourth of U.S. adults (26%) say they or a household member have had problems paying medical bills in the past year.
- Half of this group (12% of all Americans) say the bills had a major impact on their family.
- At least one-fourth of insured adults reported it is difficult to afford to pay their deductible (34%), the cost of insurance premium each month (28%), or their copays for doctor visits and prescription drugs (24%)
So it comes down to this: It’s a toss-up:
- Risk your physical health by not getting medical care that you need
- Risk your financial health by getting care and paying a lot out of pocket
The Added Cost of Delaying Health Care
In a Kaiser survey, half of all Americans delayed or skipped either healthcare or dental care in the past year because of the expense. It’s even more common for people with high-deductible plans, with 62% saying they had skipped care because they couldn’t afford the medical bill.
CBS News reported that Robyn Hodgson is not filling a prescription to recuperate from back surgery because she has a $7,300 deductible through her husband’s employer and can’t afford the medication. In addition, she and her husband pay about $6,500 a year in health insurance premiums for the policy. CBS reported that she can’t afford to get care and is angry at the health insurance system.
Supplemental Health Insurance Reduces Your Burden
So how do you afford both your health insurance premiums and your costs for health care? In many cases, the best and easiest way is to purchase supplemental health insurance. And here’s why:
Supplemental health insurance pays benefits for sickness and accident that coordinate with your major medical plan or pay IN ADDITION TO any other coverage you have—to help fill the out-of-pocket gaps in your coverage.
Insurance benefits can be used for:
- Medical deductible or coinsurance
- Rent or mortgage
- Car payments
- Child care
- Everyday living expenses
Because supplemental insurance policies generally pay benefits directly to you, that means you can use the funds wherever you need them most.
Even if you do not have major medical insurance coverage, you can purchase one of these supplemental plans and have coverage that is focused on medical events that usually have the highest-cost instances: accidents and serious illnesses.
And, in many cases, supplemental insurance coverages are packaged with other health care-related services and discounts that can save you even more money on everyday medical care.
Innovative Ways to Fill Health Insurance Gaps
Just because you have a health insurance plan with a high deductible doesn’t mean you cannot add coverage and packages that provide you with more complete financial protection.
Here are some practical tips:
- Purchase a supplemental health insurance plan that helps cover the gaps in your high deductible health insurance.
- With supplemental health insurance coverage, you may be able to switch to a higher deductible, since you have a safety net of supplemental protection.
- Consider low-cost health care alternatives: See if your plan offers access to telehealth or telemedicine services. This may be phone or video access to a doctor or a nurse triage call service.
- If you have access to telemedicine, you can receive medical consultation and, in many cases, have a prescription sent to your local pharmacy.
- With a nurse triage call, you can receive guidance on whether an issue is serious enough to warrant a visit to the doctor.
So, before you decide to put off contacting a doctor for that ache or pain that’s been bothering you, or another physical change, consider how you can reduce your cost and increase your peace of mind with supplemental health insurance.