What deductible is best for your Indiana medical coverage? The major medical deductible determines your out-of-pocket expense for catastrophic claims, such as surgeries, hospital visits and other related costs. Most Indiana companies offer a range of options, typically between $250 and $7,150. While a lower amount reduces your potential risk, you are likely to pay more in insurance costs than you save on any claims you may have. Most consumers that pay for their own personal healthcare coverage, will choose deductibles between $3,000 and $7,150 (the highest allowed Marketplace option). The combination of a low deductible and high maximum out-of-pocket expenses limit, will not necessarily help you when a large claim is filed.
The ACA-compliant (Affordable Care Act) plans still allow you to choose among different copays, coinsurance and deductibles. However, since there are less participating companies (Medical Mutual, Cigna, Aetna and Unicare are gone), there are fewer choices. Many companies, such as UnitedHealthcare, offer “off-Exchange” coverage, but not subsidized plans.
Indiana Health Exchange Deductible Options
Highest Available Deductibles
$7,150 – Anthem Catastrophic Pathway X 7150
$7,050 – Ambetter Balanced Care 4
$6,800 – Ambetter Balanced Care 1
$6,800 – MDwise Bronze Marketplace Basic
$6,650 – CareSource Federal Simple Choice Bronze
$6,650 – CareSource Bronze
$6,500 – Anthem Bronze Pathway X Bronze
$6,550 – Anthem Bronze Pathway X 0 For HSA
$6,500 – Ambetter Balanced Care 2
$6,150 – CareSource Low Premium Silver
Lowest Available Deductibles
$1,000 – CareSource Gold
$1,000 – Ambetter Secure Care 1
$1,250 – CareSource Federal Simple Choice Gold
$1,500 – MDwise Marketplace Gold Plus
Choosing the right deductible is nearly impossible, since it assumes you can somehow mysteriously determine your health insurance expenses for the next few years. But you can base your estimates on your expenses from the last 2-5 years, as normally, they are a fairly reliable (OK…somewhat reliable) predictor. But as you get older, your risk of a serious illness increases, which also should be considered. And it’s the larger potential claims that could cost you the most.
Let’s use a hypothetical family in South Bend for an example (no particular reason for using this city). Our family consists of a married couple (both age 50) with two teen-age children and household income of $62,000.The federal subsidy of approximately $595 per month has been applied.
A Bronze-tier plan (Ambetter Essential Care 1) with a $6,800 deductible will cost approximately $356 per month. A $3,500 deductible (Ambetter Balanced Care 12) will cost approximately $556 per month. A $1,000 deductible (Ambetter Secure Care 1) will cost approximately $819 per month. Those are big differences and a lot of extra money you may be spending, without receiving an appropriate benefit.
By increasing the deductible, the annual savings is more than $5,000 per year. Of course, if you have a major claim, there will be additional out-of-pocket costs. Also, non-preventative office visits, Urgent Care visits, and minor procedures would also incur higher costs. Outpatient surgery can easily cost thousands of dollars.
However, if you had a major claim every other year (which is a lot!), you would come out ahead with the lower premium. So it appears that a higher deductible is worth consideration for a family that purchases Bronze-tier plans. And if you can “bank” the savings every year so it’s available when you need it…that would make the concept work better. HSAs (discussed below) utilize this specific idea.
High-Deductible HSA Options
Using the same hypothetical family in Fort Wayne, another comprehensive Indiana medical insurance plan from UnitedHealthcare used to cost approximately $320 per month a few years ago. But now, because several companies have left (including UnitedHealthcare), the least expensive HSA plan for this hypothetical household costs more than $900 per month (Anthem Bronze Pathway X 0 for HSA). Suddenly, an HSA isn’t nearly as appealing when compared to other alternatives. Note: If the household income reduces from $62,000 to $60,000, the monthly premium substantially reduces to only $316 per month. However, both children would be covered though CHIP, instead of a conventional plan.
NOTE: This concept is not a “one size fits all” remedy. For example, a family in Richmond will have different plans and pricing then another family in Indianapolis, Evansville, Hammond, or any other city. And of course, the entire concept must be re-evaluated during each Open enrollment, since your household income, health, family makeup, or available carriers may have changed. UnitedHealthcare is a perfect example, since they exited the 2017 Marketplace, after previously offering numerous plans.
The Obamacare Subsidy For Hoosiers
Since all of these examples take into consideration the Obamacare federal subsidy, it’s important to realize that low-income households may be better off choosing low-deductible plans. Because the level of financial aid is so high, to fully take advantage of the subsidy, selecting more expensive policies will reduce the potential maximum costs, including copays and coinsurance. Maximum out-of-pocket limits can easily reduce from more than $7,000 to less than $1,500.
Of course, rates can significantly vary in different areas of the state, and ages and medical conditions of family members can impact your decision making process. Also, on an individual policy (only one person insured), the savings by raising the deductible will not be as significant when compared to a multi-person household. Also, this concept does not work quite as well for persons under age 25. The reason is that the difference in premium is not substantial for different amounts. Thus, your savings doesn’t justify taking on additional risk.
We are available to discuss your Indiana medical insurance options and review what impact higher and lower deductibles will have on your rate. There is never an obligation and you’ll be able to compare many deductible options from multiple companies.