It was Halloween night 2011 when I found myself sitting on the couch in my small Manhattan apartment gasping for air. My boyfriend rushed me to NYU Medical Center with a frighteningly elevated heart rate, and the triage nurse – equally concerned – rushed me into the emergency room for immediate care. Three weeks, two more emergency visits, and one private doctor’s full examination later, we discovered I’d been suffering from a series of panic attacks. Luckily, that doctor found a way to stem the symptoms, but not before the full experience left me about $5000 in debt practically overnight. I had no health insurance at the time because I couldn’t afford it. I didn’t know then what I know now: I couldn’t afford not to have it.
That said, the Affordable Care Act passed in March 2010 has done a lot to help more people get access to health insurance. Perhaps the most striking change is the requirement that health insurance companies accept all applicants, regardless of past medical history. In other words, insurers no longer can deny someone coverage due to a preexisting condition. It can be tough to explain to someone who never has had to venture out on his own into the private health insurance market just how much of a game-changer this rule is. Suffice to say, before the ACA, it was virtually impossible to find reasonable insurance on your own if you were anything but a 20-year-old male who’d never suffered so much as a cold or been to a doctor. The insurance companies had free rein to decide who was a viable risk and who wasn’t worth insuring and how much they were going to charge if they were willing to make a deal.
That now brings us to where we stand today. Thanks to the ACA, millions of people have more affordable options available for private health insurance coverage. However, because we still maintain a profit-driven health care model, the insurance companies have standardized ways of continuing to maximize their money by designing health insurance plans with costs to you that can extend well beyond your premiums.
The premium – as most people know – is the amount of money you pay every month to guarantee coverage by a health insurance company. And, when you are budgeting out your allowance for health insurance every month, this is absolutely the first number you’ll consider. However, the following are some potential hidden costs that can make your health coverage wildly more expensive than you’d ever anticipated.
Do you have a deductible? Many health insurance plans come with a deductible, meaning a set amount of money you are required to shell out for your medical care or prescription drugs before most – if not all - of your insurance company benefits kick in. To make matters even more complicated, every plan is different, so you really do need to read the fine print to figure out what counts towards paying down your deductible, what doesn’t, and what services may be covered even if you haven’t met your full deductible yet.
Oftentimes, the insurance company will offer a lower premium in exchange for a higher deductible so ask yourself, “If I get sick, can I afford to spend thousands of dollars before my insurance helps?” If the answer is no, you may need to spend a little more on premiums up front. Also, the deductible usually resets every year so make sure you pay attention to when exactly that happens. Customers often are surprised when a drug costs considerably more than it has in the past because they’ve got a new annual deductible to clear with a turn of the calendar page.
What are your copays? Let’s say you’ve cleared your deductible or you never had one, and now you need to see a doctor, visit a specialist, go to a hospital, or fill a prescription. Your health insurance plan will have a specific amount you will have to pay for each of these scenarios. This is the copay. And while it is considerably less than what you would spend for each of these visits or services if you didn’t have health insurance at all, make sure to budget possible copays into what you expect to spend in a normal given year on health care.
This brings me to the most difficult expense of all, the toughest to anticipate, and arguably the sneakiest: coinsurance. Here’s how it works: If you see a doctor in your insurance network, your expenses likely are covered. But if you venture out of network (knowingly or often unknowingly in case of emergency), the insurance company may agree to pay a percentage of that cost. Sounds good on the surface, but here’s where it gets tricky. The insurance companies design coinsurance as a percentage of allowable expenses, meaning they decide how much a visit or procedure should cost and agree to pay a percentage of that amount. Not the full amount you are billed, mind you, but rather the amount they decide is reasonable. Let’s say you get a bill for $500 and your coinsurance is 50% of what’s deemed reasonable. When the insurance company says $200 is the allowed amount, they pay $100, and you are responsible for the remaining $400. Does that sound like 50% to you? Too often, patients are blindsided by coinsurance in cases of emergencies because, while a hospital may be in network, it can employ out-of-network doctors who send patients their own separate bills, and those unexpected expenses add up fast.
No one wants to think about the possibilities of being sick or injured, but looking at the fine print and budgeting out possibilities is essential when shopping for a health insurance plan. You have to think beyond the premiums and plan accordingly. And while it all sounds expensive and time consuming, I speak from experience when I say nothing is most costly in the long run than having nothing at all.
Jacki Schechner is a former CNN and Current TV Correspondent who also served as the National Communications Director for Health Care for America Now (HCAN) - the nation’s largest health care reform campaign. She’s a weekly contributor to both “Tell Me Everything with John Fugelsang” and “The Stephanie Miller Show,” and she’s active on Twitter under @JackiSchechner.