The five words that make health insurance make sense
Premium, deductible, copay, coinsurance and out-of-pocket maximum: once these five click, plan documents stop being scary.
Most plan paperwork is written for insurance people, not for you. But almost every plan comes down to five numbers.
Premium
What you pay every month to keep the plan active, whether you see a doctor or not. It's the number most people shop on, and the one that hides the most.
Deductible
What you pay for covered care before the plan starts paying its share. A $7,000 deductible means you're carrying the first $7,000 of most bills yourself.
Copay
A flat fee for a specific service, like $30 for a doctor visit. Some plans apply copays before the deductible, which is a big deal if you see doctors often.
Coinsurance
Your percentage of the bill after the deductible, often 20% or 30%. On a big claim, that percentage matters more than the deductible.
Out-of-pocket maximum
The most you can pay in a year for covered, in-network care. After that, the plan pays 100%. This is your worst-case number, and the one I look at first for families.
A low premium with a huge deductible can be perfect for someone who rarely uses care, and a disaster for someone managing an ongoing condition. There's no "best plan," only the best fit.
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Health insurance when you work for yourself
No HR department, no group plan, and income that moves around. Here is how self-employed people usually solve coverage.
When you're 1099, you're the employer and the employee. That means more choice, and more homework.
Your three main paths
ACA Marketplace plans are guaranteed issue and can come with premium tax credits based on your expected income. If your income varies, we estimate carefully and adjust during the year.
Private plans are medically underwritten. Your health history is reviewed, and good health can earn you better rates and broad nationwide networks. Whether a specific condition is covered depends on the condition and the plan, which we go over together by phone.
A spouse's employer plan is sometimes the cheapest answer, and it's worth pricing before anything else.
The tax piece
Self-employed people can often deduct health insurance premiums on their taxes. Talk to your accountant about the self-employed health insurance deduction, since it can change the real cost of a plan.
Income changed a lot this year? Tell me. Estimating it correctly is what keeps you from owing money at tax time.
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Open Enrollment and the windows that open after a life event
Miss the window and you may wait a year. Here are the dates and the events that open a new one.
Open Enrollment is the annual window when anyone can buy or switch a Marketplace plan. It starts November 1, and enrolling by December 15 gets you coverage starting January 1.
Special Enrollment Periods
A qualifying life event opens a window, usually 30 to 60 days. Common ones include:
- Losing job-based coverage
- Getting married or divorced
- Having or adopting a child
- Moving to a new area or state
- An income change that affects your subsidy
The clock starts on the date of the event, not the day you get around to it. Gather your paperwork early, because carriers ask for proof.
Private plans can often be applied for any time of year, which is why they're worth looking at when you've missed a window.
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COBRA is not your only option
COBRA keeps your exact plan, at the full price. Often there is a cheaper way to stay covered.
When you leave a job, COBRA lets you keep the same plan, but you now pay the entire premium, including the part your employer was quietly covering. That's why the first bill shocks people.
What else is available
Losing coverage opens a Special Enrollment Period for Marketplace plans, and depending on your income you may qualify for savings. Private plans may also be an option, often with broader networks.
Watch the deadlines
You generally have 60 days to elect COBRA, and a similar window to enroll elsewhere. Compare both before that window closes, because going back is hard.
Bring me your COBRA notice. I'll put the real monthly numbers side by side so you're not guessing.
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How Marketplace savings actually work
Premium tax credits and cost-sharing reductions, in plain numbers.
There are two separate kinds of savings on the Marketplace, and people usually only know about the first.
Premium tax credits
These lower your monthly premium, based on your expected household income for the year. More middle-income households qualify than expect to.
Cost-sharing reductions
These are a separate discount that lowers your deductible, copays and out-of-pocket maximum. They only apply to Silver plans, which is why a Silver plan sometimes beats a Gold plan for the same family.
Metal tiers, quickly
Bronze means the lowest premium and the highest costs when you use care. Silver sits in the middle and is the only tier with cost-sharing reductions. Gold and Platinum cost more monthly and less at the doctor.
Report income changes during the year. It keeps your credit accurate and avoids a surprise at tax time.
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What new parents need to know about coverage
Adding your baby, the first-year checkups, and the deadlines nobody mentions at the hospital.
Having a baby opens a Special Enrollment Period. You usually have 30 to 60 days from the birth to add your child, and coverage can be backdated to the date of birth.
First-year visits
Well-child visits usually happen at about 1 week, then 1, 2, 4, 6, 9 and 12 months. Most ACA-compliant plans cover them as preventive care.
Before the birth
Pick an in-network pediatrician, check the hospital's network status, and know your family out-of-pocket maximum. Those three things prevent most surprise bills.
Call me before the due date if you can. It's a five-minute conversation that saves a very tired phone call later.
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