Open Enrollment 2016:
Five Crucial Concepts for the Self-employed to
Know

Open enrollment in the Affordable Care
Act has recently restarted for the year. If you are self-employed,
you will be responsible for your own choices regarding healthcare
“insurance”. There are 5 key concepts to understand when
attempting to find the plan that fits you most appropriately:

  1. Copayments. This is
    the cost that you pay for a given medical visit. This may vary based
    on the type of doctor you see – General medical doctor versus
    specialist. Copayments can vary significantly based on the plan that
    you choose although the general costs are around $20-$100. That
    being said, some plans offer higher or lower copayments for specific
    visits, lab testing, radiology testing such as x-rays or MRI’s, etc.

  2. Deductibles. This is
    the dollar amount that the visit must total before insurance will
    cover any costs. Do not be fooled that the payment at the time of
    the visit, which is usually the copayment, is what you are
    completely responsible for. If you have not met your deductible,
    bills will continue to be your responsibility until the deductible
    is met. Do not forget the deductibles vary based on the type of
    physician as well as whether or not the specific doctor is in your
    insurance company’s “network”.

  3. Coinsurance. The
    percentage you pay after the deductible is met. This tends to be
    from 20 to 40%. So for example if you have a $2000 deductible and
    the total bill is $4000, you will be responsible for $2000 +20% to
    40% of the remaining $2000. Thus, if your coinsurance is 30%, this
    would total $2000 plus $600 (30% of the remaining $2000) for a total
    of $2600. The insurance companies game the system in their favor.
    Similar to gambling, the house always wins.

  4. Insurance Network.
    Doctors with whom the insurance company is closely allied. They will
    claim that they have improved outcomes, although there is no
    evidence whatsoever that this is true. In many cases, the insurance
    company chooses these physicians because they are low cost and may
    cut corners. Be very careful that this does not happen to you.

  5. Random uncovered expenses.
    These show up as bills in your mailbox. Scour and scrutinize your
    agreement; The details are often buried in so much legalese that no
    regular person short of a Supreme Court justice can find and
    understand them.

What can you do?

Consider high
deductible plans
when you are fairly healthy and do not use
significant health care services on a yearly basis. High deductible
plans often save individuals $300-$600 per month. Thus, you may be
able to save $4000-$8000 each year. This allows you to pay for your
medical care directly and still be
financially very much ahead
of the game. Recent
studies have shown
that individuals with high deductible plans
have higher levels of education and are financially more well-off. It
is clear that these people are doing the math.

There is a notable trend toward direct
access physicians
who are not directly involved with the
insurance companies. They tend to have fair and affordable upfront
cash payments because they don’t have the massive overhead required
to be involved with the insurance system. This allows you to control
your out-of-pocket costs. Patients can also submit these bills for
reimbursement or have the total go towards their deductible. Simply
ask the direct access physician
for the appropriate forms. These doctors are less expensive. You can
find a list of direct access
physicians here
.

Many people believe that high
deductibles and direct access physicians are the solution to the
healthcare debacle. Insurance for expensive, uncommon issues works
well in auto and home insurance and this trend towards high
deductible health insurance should function well in the medical realm
as well.

“And ye shall know the truth, and the truth shall make you free.”
John 8:32