It's that time of year again. Health Insurance enrollment time.
My work gives me from 11/02/15 through 11/20/15 to make a decision that will radically impact the outcomes of my 2016.
I've been pondering making a HUGE change the last two years, but didn't put enough research into it to make the decision until now.
Why I'm considering dropping health insurance:
I first started considering the idea of dropping Health Insurance altogether after the politicians in Washington D.C. decided to put their hands on my health insurance. As will ALWAYS be the case when the US Government gets involved, quality went down, cost went up, and the end was worse than it started.
From one year to the next, my health insurance went from being one of the primary reasons I kept my job, to something I didn't even want anymore.
Then, to add insult to injury, the US Government told me I HAD to have it, or pay a fine? Estupido Tonto Burros!
My mom is a nurse, I've grown up around medicine my entire life. There is one thing I've come to understand. Medicine is Big Business. It's not there to make you well, it's there to take your money. Nurses and Doctors who fight for the patient are steamrolled by the Insurance Companies, and CEO's of the hospitals.
Most vaccines, drugs, & treatments are not the result of careful research into what will make you healthy. They are the result of careful research into what will make them wealthy. Make no mistake, the hospitals, drug companies, and research companies are not on your side.
A small handful of Nurses and Doctors (those not brainwashed by the money machine) are on your side, but they are being silenced every day by the Medicine Machine.
I've know for a while that my insurance was WORTHLESS, ever since ObamaCare ruined it.
- So why not drop it entirely?
- Could the tax penalty cost me more than insurance?
- Are there any creative marketplace alternatives?
I have not come to ANY conclusions as I start this post. I have an hypothesis, but no conclusion.
* Disclosure:
Health and Health Insurance is a very personal decision (which the US Government had no right to impose on) and you should prayerfully consider all of your options and how they will affect you.
*Assumptions:
I will be using a household income of $50,000 (which was the average household income in the USA in 2014 (here). The average was actually $53.657.00, but I'm rounding down as a fair market average. Plus even numbers are easier to work with.
I will be using a household of 4, two adults, two kids.
I will be using a hospital cost of $10,000. I'm assuming that the only time I'd ever go to a hospital was for a delivery of a baby, and this cost is an average. I've seen estimates as low as $7,500 and as high as $20,000.
*Offer:
If you would like to use my Excel sheet to do your own calculations, you can download that (here).
Also in my planning: Maximized Living Clinic (an alternative to sickness treatments)
This year, I am probably not going to have a baby. It's possible, but not in the plan. I am however already planning to engage the services of my local Maximized Living Clinic (Chiropractic and More), in the North Fort Worth/Keller area. If you haven't checked out Maximized Living, you SHOULD!
Why treat sickness, when you can prevent it?
Also in my planning: Negotiated Medical Prices:
With or without insurance, you can negotiate the cost of your health care through sites such as MDSave and PricePain. You have to pay out of pocket up front, but it can save a ton. I ran a normal baby delivery (non C-Section) through my zip code at MDSave and got an average cost of $12,992.00 and a negotiated cost of $5,673.00 (pre-paid - does not include office visits or doctors fees).
Even with prevantive care, and negotiated prices, I still have a decision to make for this year. On to data analysis.
ObamaCare Fines
So what's the IRS fine for not having Health Insurance? According to HealthCare.Gov:
If you don’t have health insurance in 2016, you’ll pay the higher of the two amounts below:
- 2.5% of your yearly household income (Only the amount of income above the tax filing threshold, about $10,150 for an individual in 2014, is used to calculate the penalty.) The maximum penalty is the national average premium for a Bronze plan.
- $695 per person ($347.50 per child under 18) The maximum penalty per family using this method is $2,085.
Just figuring for a simple example. If you made $50,000 in 2016, you would only pay a penalty for the portion over $10,150. So you would pay a 2.50% fee on $39,850, which is $996.25
The other options was: A family of four would pay a penalty of $695.00 per adult (2) and $347.50 per child (2), which would be $2,085.00.
However, it's the HIGHER of the two (diabolical government).
Therefore, if a family of four (two adults and two kids), making $50,000 a year, doesn't get insurance, they will have to pay $2,085.00 to the IRS.
While a single person making $50,000 annually would have to pay a tax penalty of $996.25.
If I were single, this would be a NO-Brainer, take the hit, and get rid of the insurance. I would take every penny over the tax hit of what would have gone into premiums and put that into an HSA Account (not the plan mind you, just the HSA Account). I would be unlikely to need any medical intervention for several years (if not decades) and the little I did use (Chiropractor) could be paid from here. The rest would build.
Then when I needed tests, baby delivery, etc, I could shop for the best price and pre-pay through MD Save. It's like the Dave Ramsey school of medical!
Since I'm not single (meaning the tax hit is higher)... let's keep looking.
My insurance options, as I see them today, are:
- Health Insurance through Work
- Health Insurance through ObamaCare Marketplace
- Direct Primary Care
- Medi-Share: Christian Care Ministry
- Out of Pocket, No Insurance, take the tax hit.
Let's break each of these options down in more detail below:
Option 1. Health Insurance through Work
* I'm going to use my workplace insurance options (because that's what I know, and the decision I'm making). However, this should be similar to a lot of other workplace insurances. Check your plans to see the differences at your work.
I have two and half options at my work:
- HRA
- HSA Gold
- HSA Silver
Health Reimbursement Account (HRA)
- Premium per Paycheck (per month): $190.26 ($380.52)
- Premium Annually: $4,946.76
- Deductible: $3,800.00
- % after Deductible: 20%
- Annual out of Pocket Maximum: $7,600.00
Note: HRA is a plan that comes with an account. They give you a pocket of money in the HRA, and you can earn more through Health and Wellness Dollars. You can also contribute to the HRA yourself. Your money rolls over from year to year, but, if you leave the company that money disappears! Poof be gone!
You pay out of pocket, through the HRA money and your own money until you have hit your deductible, then they pay only 80% after that. That means you still pay 20% after paying premiums plus $3,800.00. After you you have paid a total of $7,600.00, they pick up the rest.
Gold Health Savings Account (HSA)
- Premium per Paycheck (per month): $177.79 ($355.58)
- Premium Annually: $4,622.54
- Deductible: $3,800.00
- % after Deductible: 20%
- Annual out of Pocket Maximum: $5,700.00
Note: HSA is a plan that comes with an account. Unlike HRA, they don't preload this account with money. You can still earn money through Health and Wellness Dollars, and you can add money yourself. UNLIKE the HRA, this money DOES go with you if you leave the company. Think of this as your 401K for Health Expenses.
What great about HSA's, is that you get a tax deduction for money going in, and a tax free withdrawal for money coming out, as long as you use that money for health expenses. However, this does not include the money you spend on preventative health (vitamins, and supplements) (diabolical government).
You pay out of pocket, through the HSA Gold money and your own money until you have hit your deductible, then they pay only 80% after that. That means you still pay 20% after paying premiums plus $3,800.00. After you you have paid a total of $5,700.00, they pick up the rest.
Silver Health Savings Account (HSA)
- Premium per Paycheck (per month): $89.28 ($178.56)
- Premium Annually: $2,321.28
- Deductible: $5,700.00
- % after Deductible: 20%
- Annual out of Pocket Maximum: $6,850.00 per person ($9,500.00 per family)
Note: HSA is a plan that comes with an account. Unlike HRA, they don't preload this account with money. You can still earn money through Health and Wellness Dollars, and you can add money yourself. UNLIKE the HRA, this money DOES go with you if you leave the company. Think of this as your 401K for Health Expenses.
What great about HSA's, is that you get a tax deduction for money going in, and a tax free withdrawal for money coming out, as long as you use that money for health expenses. However, this does not include the money you spend on preventative health (vitamins, and supplements) (diabolical government).
You pay out of pocket, through the HSA Gold money and your own money until you have hit your deductible, then they pay only 80% after that. That means you still pay 20% after paying premiums plus $5,700.00. After you you have paid a total of $6,850.00 per person ($9,500.00 per family), they pick up the rest.
HSA NOTE: Another factors in HSA accounts, is that I can invest the unused portion of the funds into the market (like a 401K). Therefore I could get growth stock mutual fund increase on the money, and it's mine forever (even if I leave the company).
Work Plan Conclusion:
As a ran the cost analysis imaged below, I found that as I factored in the total cost paid over the course of a year, with premiums added back in, the HSA Silver plan costs me the least with $7,281.28 (vs $8,062.54 (HSA Gold) & $8,386.76 (HRA)).
Therefore, if I am using the work plan, I'll be using HSA Silver.
- All future analysis will compare HSA Silver to the other options.
Option 2. Health Insurance through ObamaCare Marketplace
The Affordable Care Act (ACA), officially called The Patient Protection and Affordable Care Act (PPACA) and sometimes called ObamaCare, is a US law that reforms both the healthcare and health insurance industries in America.
HealthCare.Gov is the official Health Insurance Marketplace, although many state’s created their own Marketplace.
I checked the preview of the 2016 plan options:
- Entered my Zip Code, County, Answered a serious of questions, and got this:
Your household may be eligible for a premium tax credit
- Your monthly premium costs could be lowered by $653 /month
- A premium tax credit is a tax break you can use immediately to lower the amount you pay for a health insurance plan each month.
- Based on the information you provided, it looks like your household qualifies for this tax credit.
- Your household may also be eligible for savings on out-of-pocket health care costs
- You also may be eligible to pay less out of your own pocket each time you get care -- for things like deductibles, copayments, and coinsurance.
- To get these savings, you must pick a plan in the Silver category.
Without that "could be lowered" part, the cost of this insurance is $700-922 a month. The plan closet to what I have at work (although much harder to understand) is $922.00 per month. Yes, that's right! a MORTGAGE PAYMENT!
Theoretically, I could get some tax credit for this? So after I pay $11,064.00 all year, I might get $7,836.00 back on my refund? So I would have paid $3,228.00 total? That's still more in premiums than my work HSA Silver plan.
Marketplace Conclusion:
- My total cost without the tax credit is $16,064.00, and with the tax credit is $8,228.00. Still more than HSA Silver at work.
Option 3. Direct Primary Care - Concierge Medicine
In fairness, this one requires more explanation:- What is Direct Primary Care (also known as Concierge Medicine)?
The American Academy of Family Physicians (AAFA) describes the The Direct Primary Care Model this way:
The direct primary care (DPC) model gives family physicians a meaningful alternative to fee-for-service insurance billing, typically by charging patients a monthly, quarterly, or annual fee (i.e., a retainer) that covers all or most primary care services including clinical, laboratory, and consultative services, and care coordination and comprehensive care management.
Because some services are not covered by a retainer, DPC practices often suggest that patients acquire a high-deductible wraparound policy to cover emergencies.
Direct primary care benefits patients by providing substantial savings and a greater degree of access to, and time with, physicians.
Wiki defines Direct Primary Care:
Concierge medicine (also known as retainer medicine) is a relationship between a patient and a primary care physician in which the patient pays an annual fee or retainer. This may or may not be in addition to other charges. In exchange for the retainer, doctors provide enhanced care, including principally a commitment to limit patient loads to ensure adequate time and availability for each patient.[1]
The practice has been referred to as concierge medicine, retainer medicine, membership medicine, cash-only practice, and direct care. While all "concierge" medicine practices share similarities, they vary widely in their structure, payment requirements, and form of operation. In particular, they differ in the level of service provided and the fee charged. Estimates of U.S. doctors practicing concierge medicine range from fewer than 800[2] to 5,000.[3]
The Physicians Foundation found that 9.6 percent of "practice owners" and 6.8 percent of all practices were planning to convert to cash/concierge practices in the next three years.[19] In 2012, there were 4,400 private physicians - a 25% increase from 2011.[20]
History of DPC:
You may, or may not, recall that medicine was not always run by the government and multi-national corporations. Before the modern invention of health insurance, people saw their family doctor in much the same way as they did their local farmer, or local butcher. And just as Big Business ruined the quality of farm produce and cattle, while simultaneously driving up costs... so insurance did to medicine.
The doctor doesn't perform the procedures he wants, he performs the procedures your insurance company tells him to. He (or she) is a virtual slave to an impersonal machine called medical insurance.
Just as there has been a resurgence in personal farming, and organic free range livestock, some Doctors and Patients have opted out of the insurance machine altogether.
This is how Direct Primary Care (generally) works:
You pay a fee (monthly, quarterly, or annually) called a retainer (just like a lawyer). For that fee most or all of your care is pre-paid. You want to see your doctor? Just go, no co-pay. You may pay a nominal fee for a band-aid. But instead of paying $7.00 for a $0.15 cent band-aid, you might pay $0.50 for that same band-aid.
This is possible because insurance (and it's disastrous results) adds MOST of the cost of health care.
The Direct Primary Care Coalition (DPC) is fighting hard to keep the rights of doctors and patients away from the business and government that wants to put it out of order.
I've looked hard, I could not find many DCP's in my area. I found one in South Fort Worth, but that's all I could find. I'm not driving that far to see a doctor (especially when I don't go more than once a year if that!).
Obama's Tax Penalty and Direct Primary Care:
- You cannot, currently, use a Health Savings Account (HSA) for payment of Direct Primary Care or for other forms of preventive care (vitamins, supplements, etc). The government wants you sick, not well. They can only feed the machine (and their billionaire donors from the drug companies) if you are sick and on medications. They don't want you well. The FDA won't approve preventative medicine, only dangerous and expensive drugs either, but that's another post.
- DCP only works to avoid the ObamaCare tax hit if it is used in combination with a Wrap Around emergency care policy.
Direct Primary Care Conclusion:
Although this is my ultimate preferred goal, I do not have the money to pay for DCP AND a wrap around policy right now. I'll pass this year, hope the US Government enhances HSA's for this purpose, and hope more DCP's open in my area.
- For now, I'm still seeing the HSA Silver, and my Maximized Living Clinic as my best combination.
Option 4. Medi-Share: Christian Care Ministry
Each month, your monthly share is matched with another’s eligible medical bills. Through a secure online portal, Christian Care Ministry publishes the bills eligible for sharing and coordinates the direct sharing of medical costs between members. You will know every month whose bills you are paying, and when you have eligible bills, your fellow believers will be sharing those and praying for you.
The paragraph from their site sums it up perfectly. You agree to pay a certain amount each month into a holding account. When someone has a need, they submit the bill to Medi Share. Medi Share makes sure that the bill meets the requirements, and then negotiates with the hospital for the best possible cost.
Then they post the payment for sharing. The bill is paid directly from members accounts. If you have a cost, you decide (before you start) what amount you will pay for out of pocket before asking other's to share your bill. You pay more per month and pay less out of pocket in the future, or you pay less per month, and pay more out of pocket in the future.
This Online Cost Estimator, shows a household of more than three members, the oldest being 35.
What if I need to go to the doctor for typical/normal things?
MediShare does not pay for well visits or annual check ups or preventative care. The purpose of MediShare is to pay unexpected burdens. These are things that are expected, and planned for. However, MediShare does negotiate cost for these items.
Q. What is the provider fee?A. The provider fee is $35 for office and hospital visits and $135 for emergency room visits. This is the amount that a member must pay at each visit to a medical provider. Members are always responsible for paying the provider fee, even after the AHP has been met. Please note this does not apply toward the annual household portion.
Q. Besides the provider fee, do I pay anything to the doctor or hospital when I visit?A. No. Even if you know you have not met your AHP, you should have the providers submit the bills to CCM for discounting, to determine if they are eligible and whether they should be applied to your AHP. Your provider will then bill you for the net amount (which is the discounted amount minus the provider fee).
So what is the cost benefit analysis for Work Insurance vs Medi Share?
- The total cost of MediShare came out to be an estimated $14,914.00 vs $7,281.28 with Work Insurance HSA Silver.
Option 5. Pay the ObamaCare Penalty, and pay for medical Out of Pocket
- Cost with HSA insurance: $7,281.28
- No insurance at full cost is $10,000 (plus the tax penalty) for a total of $12,086.
- No insurance with a negotiated cost of $5,000 (plus tax penalty) for a total cost of $7,086.00
I actually SAVE $195.28 by having no insurance and negotiating the cost. But that is contingent upon me being able to get that deal at that time. Kind of a gamble for $195.28 in savings.
Final Conclusion:
Let's say that I have NO health expenses. I am just paying for nothing.
Here's the difference between taking the hit and using the HSA Silver:
- I take the tax hit of $2,086.00, or I pay $2,321.28 into premiums for HSA Silver. At first glance this sounds like the tax hit wins.
- BUT, I'm getting Health and Wellness Dollars back from my work. They will pay me back $800.00 for me, and another $800.00 for my wife (for doing some basic assessments).
- In that instance I am getting $1,600.00 back, so I'm only out of pocket $721.28.
- Remember, unlike the HRA, this money is mine forever. If I leave the company, I can take it with me. I can also invest the HSA money in the market like my 401K. So I'm actually ahead by taking the HSA Silver (with market growth, I could be ahead a lot!).
- So... this year (2015 enrolling for 2016) I'll be using the work plan HSA Silver. But if the penatly for not getting insurance ever goes away, OR, if the HSA can be used for preventative health and DCP's count on their own, I'm OUT!
- In addition, I'll probably add another $80.00 per paycheck (80*26=$2080 annually) to my HSA. This will pay for Chiropractor visits (HSA can be used for that), dentist costs, vision/glasses, and unlikely but possible other medical expenses.
Your Turn:
- What's your decision going to be this year, and why?
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