The Bronze Option: This is Health Insurance?

As health insurance rates continue to increase, having more than doubled over the past ten years, more employers are evaluating the option of purchasing a “Bronze” level plan. These are the least expensive health plans on the market but the ones with the largest deductibles; anywhere from $4,000 to $7,000 for an individual. Subscribers facing such large deductibles often ask, “How does this even count as insurance?” Whether you’re an employer thinking about offering a Bronze plan option to your employees, or an employee trying to decide between this and a traditional co-pay/deductible plan, there are a few things to keep in mind.

First, preventive care is covered in full and not subject to the deductible. That includes your annual physical, children’s annual checkup, immunizations, routine GYN, and more. Check out the complete list of mandated preventive care services here: https://www.healthcare.gov/coverage/preventive-care-benefits

Second, If you’re utilizing an in-network service provider you pay a discounted amount thanks to the insurance carrier’s negotiated fee schedule. While this may not seem like a lot of savings on simple doctors’ visits, it can be substantial on more expensive services.

The Bronze options simply cost less in premium; so you save on your fixed cost each month when compared to those with lower, or no, deductible. You should be depositing some, or all, of that savings in a Health Savings Account (HSA) to pay future medical/Rx expenses. This is where you can create the opportunity to really cut your healthcare costs. We regularly tell our clients “stop paying the insurance company and start paying yourself!”

No one can predict how much they’re going to spend on health care in an upcoming year, but most healthy adults (under 65) have medical/Rx expenses under $1,000. Of course, just because you had $1,000 in medical expenses last year, doesn’t mean you won’t face much higher costs this year. But your own personal medical history is the best indicator of what you’ll face ahead. Again, we encourage clients to save as much in an HSA as possible to not only enjoy tax savings, but to have funds to pay for those outlier years.

Consider the cost of services without insurance:
• Knee Replacement: $30,000
• Hernia Repair: $7,000
• Maternity: $10,000
• Coronary Bypass: $60,000
Being covered by a Bronze level insurance plan vs. no insurance can be the difference between making periodic payments to a provider to pay off a large bill and potentially going bankrupt.

The Bronze option is not right for everyone but consider this: if you currently have a $2,000 deductible and never reach it, how much money would you have saved in premium or premium contribution under the Bronze plan?

Please reach out to your KBM Account Executive to discuss how increasing your health insurance deductible might decrease your overall health care spend.

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