When Comparing Health Insurance, Look at Total Costs
For example, even though the premium for a platinum plan will generally be higher than that of a bronze plan, the out-of-pocket spending cap may be significantly lower since platinum plans must cover 90 percent of expenses. In California, for example, the out-of-pocket spending limit on a platinum plan is $4,000, compared with $6,400 for other metal level plans.
For people who expect to hit their spending cap, buying a pricier platinum plan may actually result in lower total spending, says Marc Boutin, executive vice president and chief operating officer at the National Health Council, a patient advocacy organization.
"It's counterintuitive," he says.
Insurers anticipate that people with high medical costs will gravitate toward platinum and, to a lesser extent, gold plans, and they're pricing those plans accordingly, say experts.
If only one member of a family has high medical expenses, families may want to consider splitting coverage between different plans.
"Many insurers are expecting that savvy families will enroll a sick family member in a platinum plan and the rest in lower level plans," says Tolbert.
Depending on where people live, that strategy could run into snags. Although splitting family coverage is allowed on the individual market, state and federal officials say the Department of Health and Human Services is considering whether to limit the practice on the exchanges it will run in 34 states next year, as are some states setting up their own exchanges.
In addition, platinum plans may not be available in every state. For example, none of the seven insurers that have been approved to sell plans on the Washington State Health Benefit Exchange will offer platinum plans next year, says spokeswoman Bethany Frey.
A platinum plan may not be the best option in any case, even for people with expensive medical conditions. Although premium tax credits are available for any type of plan, cost-sharing subsidies that can substantially reduce deductibles, copayments and coinsurance are only available on silver plans.
"If you qualify for cost-sharing reductions, you'll have lower out-of-pocket costs for doctor visits," among other things, says Carrie McLean, director of customer care at ehealthinsurance.com, an online vendor. "Add those things up and see what would happen if you were to forgo that [subsidy] and get the platinum plan."
Mon, Dec 19 2011