Health Care Act

Buyer beware of ‘free’ health plans. It could cost you thousands.

An October screengrab of the healthcare.gov open enrollment website.
An October screengrab of the healthcare.gov open enrollment website.

Some N.C. residents will be able to pick health insurance plans that have no monthly premiums, but those “free” plans could come at a price.

Consumers wouldn’t pay to have these plans, but would cover their own costs for doctor’s visits and prescriptions until they meet a steep deductible – in some cases more than $10,000.

The free options are bronze-level insurance plans offered on the Affordable Care Act marketplace to the lowest income bracket of N.C. residents who get subsidies that help pay their premiums. They could be the preferred option for those who do not plan to visit the doctor often. However, if someone is likely to max out their deductibles, the plans could be more expensive.

Families could save thousands by choosing a plan with a premium over the free plans.

A married couple that earns $40,000 and has two children in Mecklenburg County would have maximum out-of-pocket expenses of $13,300 a year for the free plan, according to healthcare.gov estimates. That cost drops to $4,900 if they pay a monthly premium of $136.50 for a silver plan with a limited network.

But for others, a “free” plan could make sense.

For example, a 30-year-old who makes $25,000 a year in Mecklenburg County would not pay a premium for a bronze plan, according to healthcare.gov estimates. He or she could pay up to $6,650 for out-of-pocket for covered services.

If he or she paid a premium of $130.65 a month, then the maximum out-of-pocket cost would drop to $5,850 a year. The $1,567.80 cost in premiums would offset the $800 savings to the out-of-pocket costs.

Deductibles for employee-sponsor health insurance have jumped in recent years, in part because companies have encouraged plans with high deductibles. Those plans can be paired with a savings account, like a health savings account, that allows consumers to use tax-preferred savings to pay for out-of-pocket medical expenses. Health savings account also are an option for ACA plan members.

Navigators, who assist N.C. residents in picking health plans, encourage consumers to look beyond the premium price and consider their actual out-of-pocket costs for each plan, said Madison Hardee, a senior attorney for health care access with the Charlotte Center for Legal Advocacy.

“Once people understand what their actual monthly expenses will be, they often will opt for a silver plan in lieu of bronze,” Hardee said. “In other cases, consumers with low anticipated healthcare needs decide that bronze plans are a better fit. Either way, we are here to make sure that people fully understand their options.”

In the Charlotte area, residents can get help picking a plan by by calling 855-733-3711 or visiting www.getcoveredamerica.org/connector.

Open enrollment for Affordable Care Act health insurance plans began on Nov. 1 and runs until Dec. 15.

Last year, 549,158 N.C. residents signed up for plans through the marketplace, which provide insurance plans for individuals and families who do not get health insurance through work or other programs, including Medicaid and Medicare.

The majority of N.C. residents who enrolled in an ACA plan – 496,420 consumers – get help paying their premiums through advanced premium tax credits subsidies, according to federal data.

Health care access advocates have been worried that actions by the Trump administration could create confusion and reduce the amount of people who sign up for a plan.

However, on the first day of open enrollment, more than 200,000 people in the United States had selected a health plan for 2018, compared with about 100,000 last year, according to a national report.

The Trump administration targeted reimbursements insurance companies to reduce out-of-pocket expenses, including copays, for Affordable Care Act plan participants, called the cost sharing reduction payments.

That action resulted in more people being eligible for the free plans.

That’s because Blue Cross and Blue Shield of North Carolina anticipated the move and targeted silver plans for premium increases. As a result, the amount of financial help consumers could get increased, because those premium subsidies are based off silver level plans. A higher increase in financial help paired with bronze-level plans being roughly the same price they were last year, opened up the free plans to more people, according to Blue Cross.

“Open enrollment is the perfect time for people to shop for a health plan that works for them,” said Blue Cross of NC spokesman Austin Vevurka. “We always encourage our customers to check the provider network and look at the full price of care – their premium and their out-of-pocket costs – and to contact us if they have any questions.”

An original version of this story incorrectly stated the savings of the 30-year-old, who could save more overall with the ‘free’ option.

Cassie Cope: 704-358-5926, @cassielcope

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