Understand your healthcare utilization habits when selecting a plan design
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Consumers are becoming savvier in looking for ways to save money on their healthcare costs. As the average major medical consumer does their research, and takes their own utilization habits into consideration, many are finding that a plan without a copay costs them less annually and gives them more control of their health care spending than a copay plan.
Below are considerations that many savvy consumers make when selecting the right plan design for their particular (or family) needs:
- Copay plans typically have higher monthly premiums — $30 to $80 higher for an individual depending on the carrier and design features – because consumers are paying extra for the privilege of unlimited discounted doctor visits, not just for themselves, but for everybody else with that copay plan.
- Preventive (wellness) visits recommended under the Affordable Care Act are now covered 100%, including copays and office visit charges.
- The average copay is $35 vs. the average network-discounted office visit charge is $88.
The average person makes less than two non-preventive doctor office visits per year. With two non-preventive office visits per year, consumers would pay $176 in annual office visit charges with a no-copay plan vs. $70 in annual copays with a copay plan — a savings of $106 with the copay plan. However, with that copay plan, consumers are paying $360–$960 more per year in premiums. Based on this scenario, it does not make much sense to many consumers to pay up to $960 in order to save $106.
NOTE: The financial comparisons, assumptions and averages above are based on a holistic look at the current carrier market and do not represent specific rates for a particular carrier or market. The calculations are utilized as an example and to illustrate the thought process and analysis a consumer should do on their own and/or through the guidance of a licensed broker to determine the strategy that is best for their particular situation.
(Photo credited to achievemarketleadership.com)
DISCLAIMER: Because of the generality of this update, and based on particular situations, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice, financial advice and/or the advice of a licensed insurance or certified human resource professional.
© Connelly, Carlisle, Fields & Nichols 2012