In 2018, there are two SB health insurance plans that offer exceptional value:

  1. Bronze 60 HDHP PPO — a High Deductible Health Plan (HDHP) with a $4,800 deductible and no copays makes this the most affordable plan on the market.  Because there are no copays, you are allowed to open a tax-advantaged health savings account (HSA) to pay health care costs with tax-free dollars.
  1. Silver 1850 PPO — an affordable plan with a moderate deductible ($1,850) and low office visit and prescription copays.

Here is our thinking behind recommending these two plans for our Santa Barbara health insurance clients:

  • You need insurance for the average hospital bill of $30,000, a cancer treatment of $200,000, or accident/fall and spinal cord injury $690,000.
  • Large bills are the #1 reason for losing home or personal bankruptcy.
  • The Bronze 60 HDHP PPO is the most cost-effective way to protect from large medical bills when paying with tax-free dollars from a Health Savings Account.

  • 73% of Americans spend less than $500/year on medical expenses (81% < $1000/year)
  • 3% of Americans account for 50% of all medical bills
    • 25% of all expenses come from five conditions: diabetes, coronary heart disease. Congestive heart failure, asthma and depression.
    • Diabetes average over $10,000/year; insulin very expensive
    • Asthma and depression: medications: $100/month up to $400/month

  • Some prefer getting the Bronze 60 HDHP and then “self-insuring” or paying cash for the routine and expected medical bills. They can save money in a health savings account to pay bills (tax-free) or pay from a regular checking account (after-tax).
  • Some prefer to pay “higher premium” to get a plan with a low deductible and low copays for doctor visits and prescriptions that make is less expensive at time of service.

PLAN RECOMMENDATIONS

1. We recommend that the MAJORITY of our SB health insurance clients choose the Bronze 60 HDHP PPO.

  • The Bronze 60 HDHP PPO has the lowest premium.
  • If you are among the 73% of all Americans who spend less than $500 per year on medical care, then your major reason for getting medical insurance is protection from large bills; therefore the Bronze 60 HDHP coupled with an HSA is your best choice.
  • TO BE CLEAR: We are recommending the Bronze 60 HDHP not the Bronze 60 PPO or the Minimum Coverage PPO as your DEFAULT plan. The “HDHP” version allows for an HSA, which is important for your tax-free benefits. (NOTE: The “Minimum Coverage PPO” plan is ONLY available for individuals under the age of 30.)

2. If you believe the Bronze 60 HDHP PPO is not for you, then determine if there are reasons for choosing a more expensive plan:

  • If you don’t like the idea of a high deductible OR prefer to pay a higher premium for the convenience of low copays, then the Silver 1850 PPO is a good choice to meet your health insurance needs.
    • It is the lowest cost Silver plan and pays around 70% of medical costs.
    • If you currently have the Silver 70 PPO plan, we recommend that you consider switching to the Silver 1850 PPO plan as it has both a lower deductible and premium.
  • If you take a more expensive brand name drug, then the Silver 1850 PPO is still a good choice because you have prescription copays. Since both the Silver and Gold plans have comparable prescription copays it makes sense to have the less expensive Silver plan as it is more cost effective.
  • If you have numerous medical expenses that count towards your deductible, then the Gold 80 ($0 deductible) or the Platinum 90 ($0 deductible) plans might be good choices.

ImportantImportant Note: If you are at the lower income levels and qualify for cost sharing subsidies through Covered CA then the Silver 73, Silver 87 and Silver 94 are often the best values on the market. If you qualify for one of these plans, you should take it. But not always . . .

  • Consider this idea: If you qualify for a one of the subsidy plans on Covered CA and you are in good health, you should still consider getting the Bronze 60 HDHP PPO, HSA-qualified plan off the Exchange. The premium is less and you can put those premium savings into an HSA. Ask yourself, “Is it better to put money into HSA or to pay additional premiums to get richer benefits?”
Do I qualify for a subsidy?