Although all plans in the United States must offer “minimum essential coverage” to count as insurance under the Affordable Care Act, your policy might not cover everything you might need. There are a number of plans on the market that provide minimum essential coverage but do not provide minimum value. The benchmark for minimum value requires that a plan:
cover a substantial portion of doctor's office visits and hospital stays, and
pay 60 percent or more of the expected cost of medical services for the subscriber.
Even the plans that do meet this requirement may leave the subscriber with more out of pocket costs than he or she can truly afford. After all, 40 percent of one's medical bills can equal a large amount if the total cost of care is high.
According to the Millman Medical Index, an annual evaluation of health care costs for subscribers, the average cost of health care for an insured family of four is estimated at $28,166 for 2018. This expense includes the premium that covered adults pay toward coverage, but a significant portion of it is made up of high deductibles, required out of pocket payments, and non-covered expenses.
A deductible is the amount that you agree to pay for your health care before your coverage comes into effect. Certain services, such as preventive care for Health Insurance Marketplace subscribers, are exempt from the annual deductible.
Plans that have lower monthly premiums tend to have higher deductibles. Family plans may have a whole-policy deductible as well as individual deductibles for each covered person, and some plans may even have additional deductibles for prescription medications or other specialized services.
If your combined deductible amounts total more than your budget can accommodate, it may constitute a gap in your health care coverage.
Copayments, more commonly known as co-pays, are what you pay out of pocket for each visit to the doctor or hospital. Coinsurance, a separate charge, is the percentage of the total cost of care that is your responsibility according to your policy.
Like deductibles, co-pays and coinsurance percentages tend to be higher for plans with lower premiums and can reach well into the hundreds for higher levels of care. If your out of pocket maximum is also high, you may find yourself paying more in co-pays than you can afford.
Every health plan has certain services that it doesn't cover. This includes plastic surgery and other cosmetic procedures as well as other services that are deemed medically unnecessary. This is often at the insurance company's discretion and can include: a hospital stay under “observation” status if the insurance company believes you should be an inpatient, or vice versa
long-term nursing home care that is not geared toward a discharge
a test or treatment that, after it is performed, the insurer decides was not medically necessary
procedures that are considered “experimental”
Insurers can also deny any services that go against the terms of the policy. For example, if you are not hospitalized for at least three days under “inpatient” status, many insurers will not pay for skilled nursing or rehabilitative care after your discharge.
If your out-of-pocket medical costs are more than you can afford, consider adding additional health care coverage during your next open enrollment period.
To close gaps that result from high deductibles, co-pays, or co-insurance requirements, the simplest thing you can do is choose a higher-premium plan during your open enrollment period.
Certain events, such as serious illnesses or accidents, are common drivers of high medical bills. For that reason, some insurance companies offer specialized policies in these categories. Both critical illness insurance and accident insurance pay directly to you as the policyholder according to your coverage amount. You receive payouts only for qualifying expenses.
You can alter your coverage during your open enrollment period, which for most policyholders lasts for six weeks near the end of the calendar year. If you experience a major life event, such as marriage, birth or adoption of a child, or loss of other coverage, you may be eligible for a special enrollment period.
Building your ideal health insurance coverage strategy requires some research. PolicyScout lets you compare policies and coverage options from hundreds so that you can find coverage that suits your medical needs, lifestyle, and budget.