Three Strategies to Help You Avoid Underinsurance

3-strategies-to-avoid-underinsuranceAs the old saying goes, do you want the good news or the bad news first?

A recent survey of Coloradans showed that the number of those who are without health insurance dropped by half since the Affordable Care Act (ACA) went into effect. The percentage dropped from 14.3 in 2013 to 6.7 percent in 2015.

The number of those enrolled in Medicaid – the federal government’s health plan for the indigent -have increased as well. Colorado is one of the first states to release post-ACA figures regarding the number of insured. These numbers would essentially confirm a “win” for the ACA with respect to one of its main goals: getting more people insured.

And now for the bad news: the survey, conducted by the Colorado Health Institute, a Denver-based think tank, found that among the 10,000 people polled, the number of underinsured is rising.

What does it mean to be “underinsured?” Basically, it means that while you have insurance, the money you have to fork out of your own pocket – in the form of deductibles, copayments, and coinsurance – is a substantial amount. Sometimes it’s so substantial that there’s not much perceptible difference between having a health insurance plan and not having one.

What’s happening is that many people are choosing to purchase the minimum coverage available, which is typically that’s a “bronze” level plan. These plans are low cost, so the monthly premium may be entirely covered by an individual’s federal subsidy, which is based on income levels. On the downside,  they have high deductibles and copayments, so while you might save on monthly premiums, you’ll pay more of your own medical bills.

So how do you avoid being underinsured? Here are three easy strategies you can employ:

  1. Buy the most comprehensive coverage you can afford. Use your subsidy, but consider adjusting your monthly budget to designate  money you would spend on something perhaps less important to your health insurance premiums. Aim for having at least a “silver” level plan to provide adequate coverage for you and your family.
  2. Supplement your coverage with an accident plan. These plans are super-affordable, and pay your hospital and doctor’s bills if you have an accident. Your main health insurance plan is not going to cover you until you have met your yearly deductible, and if you’re young and healthy, you’re more likely to have an accident (for example, while on the mountain this winter) than a major chronic illness.
  3. Keep up with your premiums and never let your coverage lapse. If you lose your main coverage, you won’t be able to re-enroll until the Open Enrollment Period (OEP). Your only option for coverage if this happens is to get a short-term policy, and they typically only cover catastrophic events. So you’ll be paying most of your routine medical expenses out of your own pocket.
  Date posted: Wednesday, September 23rd, 2015
Category: Health Care, Health Care Reform, Health Insurance

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