How much do you pay for your health insurance? If you only think about your health insurance costs in terms of the monthly premiums, you’re leaving out a lot of potential expenses.
Right now, for example, I have an Affordable Care Act Bronze plan with a $442.83 monthly premium and a $6,200 deductible.
This means that I could pay a total of $11,513.96—the $6,200 deductible plus $5,313.96 in premiums—before my insurer begins to pick up the cost for any of my healthcare.
I might end up paying less than that, if I don’t have a lot of medical expenses or if my adjusted gross income allows me to remain eligible for a health insurance premium subsidy.
But I could, in theory, pay the full $11,513.96.
In fact, I could even end up paying $12,063.96—that’s $5,313.96 in premiums plus my $6,750 out-of-pocket maximum. Remember, just because you’ve paid your deductible in full doesn’t mean you’re off the hook for healthcare costs. It just means that your insurer will begin to pay a portion of your healthcare costs, not counting coinsurance or copays, until you hit your out-of-pocket maximum.
Then, theoretically, you’ve paid all you need to pay and insurance will cover the rest.
Unless you go to an out-of-network doctor, of course. Or are treated by an out-of-network doctor in an in-network hospital. Or receive some other kind of health, visual, or dental care that isn’t included in your insurance plan.
The Trump administration has made it easier for people whose employers don’t offer health insurance
Many people won’t come close to hitting their out-of-pocket maximum, but it’s still worth adding up everything you might end up paying in in-network health insurance coverage, especially if you’re trying to decide between multiple insurance plans. (Zachary Tracer, at Business Insider, has an excellent piece on how he did exactly that—and how it helped him find the optimal plan for his health and financial situation.)
It’s also worth considering whether you want to enroll in a plan with a Health Savings Account or HSA; this will allow you to contribute pre-tax dollars towards healthcare costs and, if you choose, invest those dollars in the stock market. Any HSA money that doesn’t get spent on healthcare can be used for your retirement, if it’s still in the account when you turn 65.So. How much will your health insurance cost you if you go all the way to your out-of-pocket maximum? Would you be able to cover those costs? My HSA balance is currently $4,036.49, which means I’d have to dip into my emergency fund before I could cover my $6,750 out-of-pocket maximum—and yes, I know I’m fortunate to be earning enough to have both HSA savings and an emergency fund.