Your Human Resources Department and insurer should tell you the actuarial values of any plan they are offering and then discuss your options depending on your budget. But be prepared. It won’t always be easy to get the information. You might have to prod the person on the other end of the phone. He or she can get the information for you. Insist on it.
In sharp contrast, you’ll have no trouble getting actuarial information if you’re shopping for Obamacare insurance in the government’s online marketplace. All ACA health plans sold in your state are rated side by side according to their actuarial value. That allows consumers to compare plans on the computer screen much as they do when they shop for airline tickets and hotels online.
The exchange offers four levels of coverage, each with metal names that reflect the plan’s projected “generosity.” The ratings range from a low of a 60 percent payout rate for bronze plans; 70 percent, silver; 80, gold; and 90, platinum.
By 2015, the greatest number of people buying Obamacare insurance were settling for silver-level plans covering around 70 percent of their medical costs. By comparison, people lucky enough to have employer-provided insurance had more generous plans covering around 82 percent of their costs.
People under thirty also can buy a “catastrophic” 57 percent “tin” plan. But I strongly recommend against that. I think these so-called tin plans are unacceptably risky for young people with presumably modest salaries and negligible savings. No question, young people tend to be healthy. But assuming you are the parent of one of those “invincibles,” ask yourself what would happen if your twenty- or thirty-something tore an ankle ligament while being attacked by a rabid alley cat. (I swear that actually happened in our family.) Or contracted debilitating Lyme disease, or got pregnant, or got into a car accident—and landed in the hospital for just about any reason.
These days, emergency room treatment for a sprained ankle can run $15,000. Again, no joke. And childbirth, without complications, often costs $35,000 to $45,000 and maybe more in the San Francisco Bay Area and other affluent areas. If you don’t know how your children would pay nearly half of bills like those, urge them to invest in insurance with an affordable deductible and a reasonable out-of-pocket cap.
You probably will be protecting yourself as well, since, from my experience and perhaps yours, our kids tend to turn to us when they get into money trouble. When our youngest calls and opens with an especially upbeat “Hi, Dad!” I know I’m about to get tapped, and I chip in every time.
I think parents should talk to their “invincibles” about helping the entire family avoid a potential financial nightmare due to a serious medical emergency. If you get through to them, your children will get an immediate health benefit, and so will you: You’ll sleep better.