Health insurance? What's that?

April 22, 2014 5:07 AM

I am aging out of my health insurance and totally clueless. Help this soon to be 26 year old find resources to unravel this mess.

I'm aging out of my health insurance in late June. I don't know anything about health insurance. I just figured out what a deductible is. I'm not sure I entirely understand what a copay or coinsurance is. I know what a PPO vs HMO is but not an HSA.

My situation is I will need to enroll in obamacare as I will be unemployed (well employed part-time but no benefits). In August I will go to graduate school and will have to decide between the university plan and whatever plan I'm on.

I've tried looking online but I'm really looking for resources that spell out what all these mystery terms mean for someone who is uneducated on healthcare. And I also need advice on choosing a health plan. Due to poor eyesight (chronic but stable) I see a neuro-opthmalogist once a year and I am high risk for a detached retina (which would mean surgery).

I am already poor ($11/hr job) and will be moreso in grad school so how high of a deductible is too high? Is there anything special I should take into consideration because of my low vision and needs for a specialist?

Bonus: How expensive is a normal dentist checkup (no x-rays) without insurance?

posted by Aranquis to Health & Fitness (19 answers total)

Did you try calling the phone number listed on https://www.healthcare.gov/?
posted by devnull at 5:20 AM on April 22, 2014

What state are you in? This will determine whether you're dealing with the federal or a state-level exchange. I have dealt with several phone representatives from the federal exchange, and they are very, very helpful. If you start your application online, definitely call them when it's time to pick a plan- if you're eligible for any extra special cost-saving plans (with lowered deductibles and out-of-pocket maximums), they will direct you to those.
posted by ThePinkSuperhero at 5:23 AM on April 22, 2014 [1 favorite]

How about contacting a navigator? This is a person who will actually help you through the process, explain everything and help you choose exactly what's right for you.

I have a friend who got a great plan, with dental for about $75 per month. So it's really based on income.

My dentist charges $75 for a cleaning, no x-rays.

Heads up though, insurance companies negotiate special rates for different procedures. For example, a regular office visit, off the street, with no insurance might be $100. But the doctor agrees to take less from an insurance company, under a contract. So that visit will be $80.

So you need to tell the doctor, "I don't have insurance, I"m paying out of pocket, can you help me out on the fee?"

HMOs are the most affordable for most people. You pay your insurance and you just go to the doctor when you need to. HMOs don't usually have co-pay or deductibles, but they get a bad rap for having poor customer service. It's a crapshoot. When we had Kaiser in California, it was AMAZINGLY great. You walked into the building and all the doctors were there. You got your prescription in the pharmacy. No money changed hands. It was a beautiful thing.

PPOs are typically more expensive, but they're also more flexible.

I have an HSA. That means that my insurance has negotiated rates with providers, and that I can contribute money tax-free into a bank account exclusively for medical expenses. My deductible is $2,000 annually and any money I contribute into the account over what I spend, stays there as long as I want it to. I can withdraw it tax free in retirement.

Unless you have enough money to cover the deductible in a bank account, I don't think an HSA would be appropriate for you.
posted by Ruthless Bunny at 5:23 AM on April 22, 2014 [2 favorites]

I'm not sure I entirely understand what a copay or coinsurance is.

A co-pay is a set amount of money you pay every time you see a healthcare provider, no matter how expensive the actual visit is. So, for instance, my co-pay is $5. (I have unusually generous insurance: it's probably typically higher than that.) I go to a several doctors, and I pay a $5 co-pay for every visit. $5 is relatively trivial for me, but the idea is that you'll avoid getting totally unnecessary care if you're paying something.

Co-insurance is also a contribution that you make to the cost of your care, but it's a percentage of the total cost. So, for instance, I once needed a couple of MRIs that cost $10,000 total, and my co-insurance was 20%. I was responsible for $2000 of the total. Co-insurance can really add up if something serious happens to you. There may be a limit to how much you can have to pay: if you hit that limit the plan will pay everything. You should check.

HSAs or Health Savings Accounts are special tax-free accounts into which consumers can contribute money to pay for their healthcare. Usually, people combine those with a high-deducible policy to cover catastrophic events. So basically, you would pay for your routine care out of your HSA, but if you got hit by a bus and needed millions of dollars of care you would still have insurance to cover it. Conservatives typically like HSAs, because they think that people limit unnecessary care if they're paying out of pocket. I think you're probably not a great candidate for an HSA at this point in your life, although you might be later on.

Congrats on paying attention to this and actually looking into what kind of insurance you're getting. I didn't do that when I aged out of my parents' plan, because I was young and healthy and not that interested, and it kind of bit me in the butt when I developed real health problems. 20% co-insurance is no biggie when you're healthy, but it's potentially-bankrupting when you're not.
posted by ArbitraryAndCapricious at 5:58 AM on April 22, 2014 [2 favorites]

In my experience, a dental cleaning might be in the $75-90 range, maybe a little more for digital x-rays if they do that in the office you go to, but if you haven't been to a dentist in a while they'll probably want to do a set of x-rays in addition, which might double that; other additional procedures they might want to do but which I suppose you can decline (fluoride treatments, periodontal disease and oral cancer checks, etc.) would add even more to it, so it's good to discuss with them before they get to work exactly what you want.

As far as some of the basic health insurance terms:

- Premium - what you pay every month to the insurer to be part of their plan
- Co-pay - a set charge, typically $20-40 in my experience, that you pay for common procedures such as each regular visit to a doctor's office
- Co-insurance - for procedures not covered by a set co-pay, this is the amount you are responsible for paying; often 20% of the bill for lab work or surgery or hospital visit (80/20 plans are common - the insurer pays 80% of a procedure, you pay 20%)
- Deductible - an amount you have to pay for co-insured procedures before the insurer starts covering you; so, even if a procedure is covered by your plan, you need to accumulate the amount of your deductible before they start paying the 80%. This can be anywhere from a couple hundred dollars to many thousands of dollars depending on how good the plan is.
- Out of pocket maximum - the most you'll have to pay in co-insurance in a year; note that co-pays don't add to this, only co-insurance. Usually several thousand dollars. In other words, when all the 20% amounts you've paid for procedures add up to this, the insurer starts covering the costs in full. Bad plans have high deductibles and out of pocket maximums.
- Lifetime maximum - the grand total that an insurer will ever pay for all of your medical care. Usually a very large amount that will not be reached unless you are really unlucky or have an expensive chronic condition.
- Reasonable and customary charges, or allowed amount - Usually your insurer will have agreed upon standard charges for various treatments you might get from physicians who are "in your network"; if you were to go to some other random doctor not in network who charges more than those agreed-upon amounts, you might be responsible for the difference (in addition to the 20% of the reasonable charge amount) above those "reasonable and customary" amounts.

Here is the healthcare.gov full glossary https://www.healthcare.gov/glossary/

Finding a good plan is juggling a good balance of these factors - low co-pays and premiums, low deductible, and high out-of-pocket maximum is ideal, but you're not going to get ideal so you have to strike a balance. People often make the mistake of going for the plan with the lowest premium and then have problems when they need a procedure done and they have a really high deductible and co-insurance and end up paying a larger share of the actual medical bills than they might have with a plan with marginally-higher premiums.

For details of the ACA, as ThePinkSuperhero said, that varies by state, unfortunately, so your best bet might be to do some research on the healthcare.gov site or by calling a help line listed there. We all know there's been a lot of bad press about signing up, between the early web site issues and the vicious political attacks on the law, but a couple people I've spoken to personally had good experiences.

Good luck.
posted by aught at 6:03 AM on April 22, 2014 [1 favorite]

An ACA "silver" plan is probably for you for a short amount of time, and then switch to your graduate school plan. The silver plan will have a low premium in all likelihood after subsidy, and won't have deductibles so crushing that if you ended up with a detached retina surgery you'd have huge medical debt.

The graduate school plan is likely to be far better for you than the ACA plan however. Single grad students have incredibly cheap actuarial characteristics (rarely sick, rarely injured, rarely pregnant) and the premiums are priced accordingly.
posted by MattD at 6:16 AM on April 22, 2014

You've gotten some good advice about contacting a navigator, and updating us with your state. The HealthCare.gov glossary is helpful too.

I am already poor ($11/hr job) and will be moreso in grad school so how high of a deductible is too high?

Health insurance with a high deductible requires you to also do some self-insurance. This means, essentially, put money away in a bank that covers your deductible and Out of Pocket Max.

If a higher premium with lower deductible is easier for you to afford on a month-to-month basis do that. It's essentially a forced savings plan, knowing you will need to cover some health care costs, but don't have the cash-on-hand to do so.

If you have money in the bank already that could cover this, you can afford a higher deductible.

Basically if a deductible would wipe out your savings account, or throw you into debt, it is too high. Any savings on premiums could be wiped out by the interest of putting it on a credit card, or forcing yourself into poor financial standing.

Your deductible and out of pocket max are a pretty crucial part of your Emergency Fund, along with 3-6 months of living expenses. I know it might not be easy to build this fund up now, but it should be your first financial goal.
posted by fontophilic at 6:43 AM on April 22, 2014

Here's some information that will probably be helpful to you when picking a plan through Obamacare or your state's insurance exchange. Health insurance is confusing, so you may have to read through this a few times to digest/understand it.

I'm no expert in health insurance, but this is what I've come to understand over the years.

A Health Maintenance Organization (HMO) is a health insurance plan where you have to pick doctors out of a network. You pay a set amount out-of-pocket (called the co-pay) for each visit, and your insurance pays the rest. When I last had an HMO for insurance, the co-pay was $20 for a doctor's office visit or $50 for a trip to the ER.

A PPO (I don't know what PPO stands for) is similar to an HMO, with the exception that you are allowed to go to doctors that are not in the network, but you pay more out-of-pocket (higher co-pay) if you go to an out-of-network doctor.

A Health Savings Account (HSA) is usually combined with a High Deductible Health Plan (HDHP). You can contribute up to a certain amount per year (I believe this year it is $6,500) to your HSA and you won't have to pay income tax on that amount. You pay ALL of your health care expenses out of your HSA until you reach your deductible. At that point, your insurance pays a percentage and you pay a percentage out of your HSA (this is called co-insurance), up until you reach your Out Of Pocket Maximum. After you exceed your out-of-pocket maximum, your insurance pays everything.

A Flexible Spending Account (FSA) is also used with a HDHP. It is another type of HSA you can contribute to in the same way as an FSA, with one important difference: if you don't spend all the money in your FSA by December 31st, you lose the money. By contrast, with an HSA you get to keep the money from year to year. I don't recommend an FSA unless you know you're always going to spend X dollars a year on health care, and even then I don't really recommend it.

I currently have an HDHP with HSA, and I've been quite happy with it. My deductible is $2,500 (which I usually exceed) in-network and $7,500 out-of-network (I rarely use out-of-network doctors, but they count that money separately rather than together -- i.e. if I see 20 in-network doctors and spend $2,500, then see another in-network doctor and an out-of-network doctor, the insurance will contribute toward the in-network doctor, but the out-of-network doctor will still cost me the full amount). My annual out-of-pocket maximum is $6,188 in-network and $35,000 out-of-network. As you can probably tell, it's a good idea to use in-network doctors and hospitals when possible; fortunately my health insurance plan has a very big network of doctors and hospitals. My coinsurance percentage is 20%. I'm married; the deductibles and out-of-pocket maximums are less for single people and more for people who are married and also have children. When I was single, my deductible was $1,200 in-network, and I don't remember the other amounts.

I fund my HSA through automatic payroll deductions (not an option for you since you'll be unemployed, but worth considering if you do get a job in the future).

I suggest you check the network of the health plans you're considering and be sure the doctors you currently use and like (such as your neuro-opthalmologist) are in-network for any plan you buy. Also check the other doctors and hospitals that are in-network. Having in-network doctors and hospitals will save you a bunch of money on health care in the long run.
posted by tckma at 7:18 AM on April 22, 2014 [1 favorite]

Three points I forgot to mention:

One, your deductible resets every year. So, say you exceeded your deductible on October 1, and are paying less for doctor's visits from October through December. On January 2 you have to go see a doctor. Now you're paying the full amount and it's counting towards the new year's deductible.

Two, doctors charge different rates depending on what insurance company their patient has. Doctor A may charge $100 for an office visit to a patient with no insurance, but has agreed to accept $80 from patients with Health Insurance Company X, $85 from patients with Health Insurance Company Y, and $75 from patients with Health Insurance Company Z. There's no way for John Q. Public to find out these agreed-upon amounts, so it's hard to shop around. The doctor will still bill the insurance companies for the full $100. Let's say you have Health Insurance Company X, though. They'll say you only owe $80, and you will only owe $80 (if you haven't met your deductible) or $16 (if you've met your deductible and your coinsurance is 20%). With a HDHP you don't pay anything at the time of your doctor's visit, but you wait for the bill. With an HSA or PPO, you pay your co-pay up front at the doctor's office.

Three, preventative care (such as an annual physical, or an annual gynecological exam) is required by law (the Affordable Care Act) to be paid in full by the insurance company, regardless of if you have a co-pay, or whether or not you've met your deductible or out-of-pocket maximum. This is meant to encourage people to get annual checkups.
posted by tckma at 7:34 AM on April 22, 2014

A Flexible Spending Account (FSA) is also used with a HDHP. It is another type of HSA you can contribute to in the same way as an FSA, with one important difference: if you don't spend all the money in your FSA by December 31st, you lose the money. By contrast, with an HSA you get to keep the money from year to year. I don't recommend an FSA unless you know you're always going to spend X dollars a year on health care, and even then I don't really recommend it.

Well, first, FSAs aren't only linked to HDHPs. I have a pretty low deductible plan, and I love my FSA, as I can pretty well estimate my annual spending (new glasses, contacts, $25 copay times 4 doctor visits, contact solution for the year, etc). More importantly, new federal rules just went into place allowing up to $500 rollover to the next year, so as long as you can guess within $500 of what you'll spend in the year, you're golden.
posted by The Michael The at 7:44 AM on April 22, 2014 [1 favorite]

1. PPO= Prefered Provider Organization

2. FSAs can be a great way to get a "discount" or "tax advantage" on money you plan to spend on healthcare costs in a given year. Only a special kind of FSA can be used with a HDHP/HSA-Eligible plan because the IRS is already giving you a break on health care money (your HSA). Your Limited Purpose FSA is basically just for dental and vision expenses.

Because of Obamacare/ACA, your employer can allow you to roll forward balance of $500 in your FSA. It basically makes sense for most people to take advantage of this tax-free savings.

3. These nuances are probably not relevant to the OP because FSAs are only offered through an employer. I'm doubting a part time $11/hr job offers an FSA.

But in my previous comment, when I mentioned self-insurance, an FSA is a great vehicle for those reserve funds if available to you.
posted by fontophilic at 7:46 AM on April 22, 2014 [1 favorite]

A couple of corrections on comments in this thread:
HMOs DO have copays deductibles and co-insurance, including Kaiser, sadly.
Co pays do count towards the maximum out of pocket, at least in my plan. Your plan may vary.

There is a lot of helpful information here, but the devil is in the details. The best advice we RIS* can give you is to contact a navigator and to trust the information you get in writing.

Good luck!

*Random Internet Strangers
posted by SLC Mom at 8:14 AM on April 22, 2014

Response by poster: Wow you guys are awesome. I live in Ohio and I have contacted healthcare.gov but it wasn't that helpful to me to be honest which was annoying after being on hold forever. I go to the dentist every 6 months so I'm trying to budget for that.
posted by Aranquis at 8:38 AM on April 22, 2014

Also keep in mind that since your income is low you might qualify for subsidies, but only if you sign up on healthcare.gov. Student policies are generally cheap, but may still be more expensive, despite your favorable demographic, when compared to the break a subsidy can provide. If you purchase insurance through the school, you will not be elegible for subsidies; only policies accessed through healthcare.gov are elegible. Make sure you compare the policies taking premium subsidies - or lack of them - into consideration.
posted by citygirl at 10:31 AM on April 22, 2014

Ohio was one of the states that expanded their Medicaid program this year to accept more low-income people. According to this article:

Starting Jan. 1, mostly childless adults earning up to 138 percent of the federal poverty level, about $16,000 for a one-person household, can begin receiving health care coverage under the state-federal program.

You can check your eligibility at this website. If you are eligible, it'll take you to a link to apply for the program.
posted by brookedel at 11:37 AM on April 22, 2014

Flexible spending accounts (FSA) are only available for employer health plans. You can't use them on the individual insurance market. They don't apply to the OP.
posted by JackFlash at 11:58 AM on April 22, 2014

As noted above, if you are on a high deductible plan for only a few months, chances are it will never pay for anything (unless you land on the hospital). However, you would benefit from the rates that they negotiate, and possibly from some mandated services, and for negotiated drug prices.

My family's experience with university health plans is that they are pretty good while you are at school, but not so good if you are traveling.
posted by SemiSalt at 1:41 PM on April 22, 2014

The Kaiser Family Foundation is a good resource for information on the Affordable Care Act and health insurance issues. Its section for consumers will help to understand many of the issues.
posted by yclipse at 2:53 PM on April 22, 2014

So, if you're earning $11/hr and working part time, you're making roughly 12-14 thousand dollars a year? If that's the case, almost all of the helpful insurance information above isn't going to apply to you because you'll be eligible for Medicaid in Ohio. If you're a single adult, Medicaid will cover you if you make under $16,105 a year.

So you need to do some research on Medicaid and what that will cover in your state. Does your neuro-ophthalmologist accept Medicaid? Your doctor's office (and particularly their billing person) should be able to help you figure out if your visit will be covered under Medicaid, but you should double check anything they tell you.

As for dental, according to this website that describes services covered by Ohio Medicaid, you will be covered for one dental visit a year.
posted by MadamM at 2:55 PM on April 22, 2014