I’ve been trying to shop around recently for insurance, as I’m now required to cover my health expenses and can’t seem to figure out why prices are so high.

Here are some details for a couple of plans that I am considering. I’m also looking only at PPO plans right now as I would like to keep my current doctor. My doctor is not available through HMO.

Some Background

I have been without health insurance for the last 3 years. Prior to that I was covered on my Dad’s health insurance plan. At 24, I was no longer eligible since I did not live with my parents and could not be claimed as a dependent. Since then I have been paying out of pocket and it has really been quite affordable. My doctor’s network provides a 30% prompt-pay discount for bills payed within the first 10 days of reciept. A regular office visit for me was anywhere between $80 – $120 dollars depending on what I needed checked and if any tests needed to be conducted. Last year, I probably went for about 3-4 checkups, usually about once a quarter. So this would cost me annually about ($80 * 4 = $320) or ($120 * 4 = $480) respectively.

I also am on two prescription medications. I take generics, so I can get a 3-month supply for both around $45 ($45 * 4 = $180). All things considered, my routine monthly medical costs are very low. Annually, that comes to ($480 + $180 = $660).

However, earlier this year I was hospitalized after I came down with the flu. I didn’t take care of my electrolyte balance properly and started having heart palpatations. Not knowing what was causing this at the time, I decided to check myself into emergency. The hospital decided to start with the most expensive tests first and the simple ones later. We started with a chest x-ray, followed by a D-dimer blood test and topped off with a chest CT, complete with contrast to rule out any blood clots. As it turns out, I was low on potassium, so towards the end of the night two oral potassium pills fixed me right as rain.

At the end of the day (or beginning in this case) my bill came to $3500 for the 6-hour stay and all the tests. I have recently recieved a separate bill from the doctor that was assigned to me. He came in for about 15-minutes when I was in emergency and asked me a series of questions about why I was there and what severity of pain I was experiencing. He then disappeared for the rest of the night, but not before recommending I undergo some very expensive tests. The bill I recieved for that care was $500.

So the grand total for my hospitalization was $4000. As a result of that, I estimate my annual medical costs for 2013 to be around $5100.

What does that have to do with anything?

I want you to keep that story in mind as you consider the healthcare choices that are available to me starting in 2014; and bear in mind that I am required to either enroll in one of these plans or opt-out for %1 of my annual income.

My options

These figures are from from the Blue Cross Blue Shield of Michigan website [1]. As of yet, I am still unable to get on the Healthcare.gov website for more specific figures (currently I login and get a blank white page with a title that says ‘success url’). I will have to update this post with the latest figures once I am able to get them.

Bronze Plan

— Deductable: $4,400 — Coinsurance: 40% — Annual Out-of-pocket max: $6,350
184.03*/month * 12 = $2,208.36 annual

Silver Plan

— Deductable: $1,400 — Coinsurance: 20% — Annual Out-of-pocket max: $6,000
241.79*/month * 12 = $2,901.48 annual

Gold Plan

— Deductable: $150 — Coinsurance: 20% — Annual Out-of-pocket max: $5,100
292.13*/month * 12 = $3,505.56

Some Maths

Okay, let us do some maths to see if I can get a decent deal out of this based on my current situation. We’ll look at the bronze plan first. As you can see above, I will have to pay a premium of about $2,208.36. I would then have a deductible of $4,400 with a co-insurance beyond that of %40. If we apply that formula to my year 2013 of medical expenses, it should look something like this. ($5,100 – $4,400 = ($700 * .4 = $280) –> ($4,400 + $280 + $2,208.36 = $6,883.36). As such, I would have had to pay ($6,883.36 – $5,100 = $1,783.36) extra this year to have insurance for the same type of care.

Next, let’s look at the Silver plan. ($5,100 – $1,400 = $3,700 * .2 = $740.00) –> ($1,400 + $740 = $2,140) => ($1,400 + $2,140 + $2,901.48 = $6,441.48). ($6,441.48 – $5,100 = $1,341.48).

And the gold plan. ($5,100 – $150 = $4,950 * .2 = $990) –> ($150 + $990 + $3,505.56 = $4,645.56). ($5,100 – $4,645.56 = +$454.44). This might actually save me in the event of minor emergencies.

Finally, we’re getting somewhere

Cool, the gold plan could potentially help me out in the event of a hospitalization! But how often should I expect to be hospitalized? That’s the real question for me here. If I don’t end up visiting the doctor as frequently or recieve any expensive emergency care, I can expect to pay $3,505.56 without receiving any doctor visits. What I could really use is a catastrophic plan, but the deductables on those are so high ($6,350 deductable @ $100/$140 per month) that it is waaaaay cheaper for me to opt-out for 1% of my income, and continue paying out of pocket; besides, then I could be sure to keep my current doctor as well.

In the end, it doesn’t even matter

Whew, that was something. As it stands right now, nothing has really solidified for what the actual rates are going to be for me once I can get them from healthcare.gov. So as it stands, the only logical choice for me is to opt-out for the first year. Which, I’m fine with, whatever. It is what it is. It’s just another tax on top of all the other taxes I pay as an American citizen.

Trouble ahead

The real problem with this however, is that if the Affordable Care Act can’t raise enough capital in the first few months of its launch from my generation in particular (millenials), it will not have enough cash on hand to pay the subsidies that it promised to the insurance carriers to keep premiums low. If that’s the case, we can expect everybody’s premiums to skyrocket, regardless of whether you have existing insurance coverage or not. To that I will say this, Prepare for unforseen consequences.