What are affordable health insurance plans?
Generally, affordable health insurance plans feature low premiums but high deductibles. They’re an attractive choice for those who don’t frequently need medical expenses and want to save on out-of-pocket costs.
New York residents can take advantage of tax credits to reduce their monthly premiums for two person households, making these plans more manageable. Furthermore, if your income falls below 138% of the federal poverty level, then you might also qualify for Medicaid coverage.
Premiums
Affordable health insurance plans provide a range of coverage options at an affordable monthly premium, which are typically provided through the health insurance marketplaces that operate in all states.
Premiums associated with health plans vary based on location, age, tobacco use, plan category and whether an individual or family can enroll. These factors are regulated under the health care law and only five of many things an insurer can take into account when setting your rate.
Bronze plans typically offer the lowest premiums, but their deductibles can be high – up to thousands of dollars annually when medical care is necessary. They are best for individuals who require protection in case of serious sickness or injury. Silver plans offer moderate premiums and lower deductibles than bronze ones do, making them suitable for most people and eligible for cost-sharing reduction subsidies which reduce deductibles and coinsurance expenses.
Deductibles
In addition to premiums, the deductibles associated with affordable health insurance plans also play a significant role in how much you’ll pay overall for healthcare services. Deductibles are the amounts you must pay out-of-pocket before your plan starts covering them.
Deductibles for individual and family health insurance plans differ. Some don’t count any payments like copayments or coinsurance; others may include some or all of these costs.
Determining the appropriate deductibles is critical when it comes to getting the type of care you can afford. A low-deductible plan may cover more preventive services, while one with a higher deductible requires more reimbursement for medical expenses.
Over the past decade, deductible costs for individual and family health plans have skyrocketed, taking a larger share of workers’ incomes. By 2020, these costs amounted to 11.6 percent of an average household’s take-home pay.
Co-pays
Affordable health insurance plans typically include copays, which are fixed amounts you pay for each medical service such as prescription drugs and visits to specialists. Copays may vary across different services such as prescription drugs or visits to specialists.
Health insurance plans typically feature co-insurance, which is a percentage of the amount you must pay after meeting your deductible. For instance, if a visit to the doctor costs $100 and your co-insurance is 20%, then you are responsible for $20 while the insurer covers $80.
Another factor that may influence health insurance rates is age and location. Typically, those aged 55 or older living in larger cities tend to have higher premiums than younger individuals or those from smaller towns.
Out-of-pocket maximums
In addition to deductibles, coinsurance and copayments, affordable health insurance plans also feature out-of-pocket maximums. These amounts set limits on how much you must spend out of pocket on covered medical services and prescriptions within a plan year before your insurer covers the remaining expenses.
Federal regulations set maximum out-of-pocket limits for non-grandfathered private plans in 2023, such as $9,100 for an individual and $18,200 for a family.
Future out-of-pocket maximums remain uncertain due to uncertainty in economic forecasts. However, how prices and employer-based health insurance premiums rise will likely determine what these maximum out-of-pocket limits will be.
For New Yorkers with high medical expenses, the most cost-effective health insurance plans are those with low out-of-pocket maximums. A great example is Independent Health’s Platinum plan, which costs an average of $789 monthly.
