Caution: Using Your Health Insurance May Be Injurious To Your Financial Health

Monday, March 26, 2018 | 7:19 pm

It is becoming obvious to my clients that there are two major problems with health insurance in California, one is the monthly premium and the other is the actual financial risk of using their health insurance coverage.

What is this risk? It is the financial gap of combined deductibles of $7,000+ for individuals or $14,000+ for families before the insurance carrier pays for the remaining medical expenses.

The ACA plans with the largest number of enrollees are the Bronze and Silver plans. These plans are favored because they have lower monthly premiums than Gold and Platinum plans. However, Bronze and Silver plans also have the highest combined deductibles.

Other than buying a much more expensive Gold or Platinum plan the only real solution is Gap insurance coverage that will pay for or reimburse these high combined deductibles.

Gap coverage plans are designed to pay for or reimburse your medical expenses caused by accidents, critical illness, or hospital admissions for any reason up to the limits of the actual Gap policy or the maximum combined deductible of your ACA policy.

The cost of average hospital emergency room visit has increased to over $2,000 for simple in and out treatment. However, the greatest medical expenses are hospital stays for more than a day, which will trigger your maximum combined deductible nor matter the category of your ACA plan.

Financially, you need to determine the potential financial liability of your health insurance for 2018. Simply add your total premium to be paid in 2018, with your combined deductible or maximum out of pocket expense for in-network medical expenses.

As an example, for 2018, a family of four (ages 42, 40, 14, 12) living in Los Angeles will pay approximately $13,800 for an Off-Exchange Bronze plan, or $17,400 for a Silver plan.

• This Means That Family’s Total Potential Financial Liability for 2018, Would Range From $27,800 to $31,400.

You can tailor Gap plans to your specific family situation:

A family with children might select an accident only policy that would pay or reimburse up to $7,500 for each member of the family if the medical expenses were caused by an accident.

A single individual or a couple without children might select an accident combined with critical illness coverage that would pay up to $10,000 for accidents, and $10,000 for a critical illness.

Another option are Hospital indemnity and hospital admissions policies that would pay a specified amount for a hospital admission, and other specific amounts for daily hospital stays and surgical benefits.

The monthly cost of Gap plans ranges from $30 to $85 for individuals, and $50 to $190 for families.

• Remember, you might be able to pay your monthly premiums, but do you have the funds available to pay your deductibles? Gap plans are designed to reduce or eliminate your risk of using your health insurance.


If you have questions, please call the author John W. Barrett at (626) 797-4618.





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