ALCHEMY – CHANGING A BRONZE PLAN INTO A GOLD PLAN (ALMOST)

The question most frequently asked by my clients is how can I afford my premiums, and medical expenses at the same time?

The answer in the past has boiled down to either purchase the least expensive Bronze plan, to save money or a Gold or Platinum plan to save medical expenses.

For 2018, individual health insurance rates will be increasing, which means that new and existing clients will be financially impacted more than in past years. Clients who purchase their coverage outside of the Covered California Exchange, because they not eligible for a federal premium subsidy, must find solutions to lower their premiums and medical expenses.

There is a strategy that I recommend to my clients: enroll in lowest premium Bronze plan available, and couple the plan with additional coverage to pay for or reimburse the high deductible medical expenses associated with these plans.

• THIS STRATEGY IS ONLY EFFECTIVE IF THE COMBINED MONTHLY PREMIUMS OF THE BRONZE PLAN, AND ADDITIONAL COVERAGE ARE LOWER THAN THAT OF A GOLD PLAN.

The types of coverage that I recommend fall into two broad categories: (i) one that reimburse for any medical expenses cause by any accident and/or critical illness; (ii) a limited benefit hospital admission or indemnity plan that will reimburse for any medical expenses generated in the hospital because of an accident or illness.

THE FOLLOWING IS A PROPOSAL FOR AN EXISTING CLIENT WHO RESIDES IN WEST LOS ANGELES:

The father is 42, the mother is 38, and the two children are under 14. The family is not eligible for a subsidy, and purchases their coverage Off Exchange with Blue Shield because they want a PPO.

BLUE SHIELD PPO MONTHLY PREMIUMS, DEDUCTIBLE, MAXIMUM YEARLY FINANCIAL LIABILITY:

• Gold PPO $1,852 No deductible, $6,000 individual / $12,000 family financial liability

• Silver 70 PPO $1,490 $2,500 deductible, $7,000 / $14,000 family financial liability

• Bronze 60 PPO $1,180 $6,300 deductible, $7,000 / $14,000 family financial liability

ACCIDENT AND HOSPITAL INDEMNITY PLANS:

• Accident Only – $55 monthly premium for family. $6.750 individual or $13,500 maximum reimbursement (includes $250 deductible)

• Accident + Critical Illness – $55 monthly premium for family. $6,350 individual or $12,700 maximum reimbursement (includes $500 deductible) plus $7,500 in Critical Illness coverage (only coverage for insured and spouse)

• Hospital indemnity – $150 monthly premium for family. $5,600 per person with no deductible. Pays in addition to any other coverage.

THE TOTAL COMBINED APPROXIMATE MONTHLY PREMIUMS FOR BRONZE PPO PLUS ADDITIONAL COVERAGE IS $1,235 VERSUS $1852 FOR A STANDARD GOLD PPO.

• A POTENTIAL MONTHLY SAVING OF $617 PER MONTH OR $7400+ PER YEAR.

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