How Much Does Insurance Cost For A 21 Year Old The Affordable Alternative to Traditional Individual Health Insurance

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The Affordable Alternative to Traditional Individual Health Insurance

As a way to start, let’s define what I mean by traditional health insurance. The traditional health insurance policy consists of:

The deductible: This is the amount you have to pay for a medical event before your health insurance starts paying. In today’s world, that deductible is often $3,000 or more.

Coinsurance: Once the deductible is met, most policies require the insured to pay a percentage of all medical costs up to a maximum. Typically, the insured pays anywhere from 20% to 50% of every dollar billed.

Copays: In an attempt to make routine medical care affordable, many policies include a copay for doctor visits and prescriptions instead of having to meet a deductible. An example of this is the $10 office visit co-pay.

Out-of-pocket maximums: This is the most a policyholder can expect to pay, regardless of the amount of medical bills. As a general rule, maximum out-of-pocket costs for an individual are limited to about $7,000. This can be a very misleading number because it assumes that all of your providers are in your network. If they are out of network, your costs can be significantly higher.

And finally, the “Network”: Virtually all traditional individual health insurance policies are linked to a network of providers. The narrower the health network, the lower the premium. There are too many errors with “networks” for this article. Suffice it to say, “networks” are the enemy of the healthcare consumer (you).

The problem facing American workers

The problem is simple: Health insurance premiums are too high for most working Americans in the absence of a subsidy, and when combined with extremely high deductibles and out-of-pocket costs, health care becomes returns unreachable. Let’s look at a couple of examples right here in North Carolina.

A 62-63-year-old non-smoking couple finds their lowest premium option with BCBS of NC is $1,999 per month for a $13,300 family deductible with no copays. A plan with a $7,000 deductible and $25 office visit copays would cost $2,682 a month.

Assuming the least expensive plan, the annual cost would be $23,988 per year. And if anyone had a medical event like cancer, the actual cost of health care would be $37,288. You must be asking yourself, “Why even have health insurance?”

A 30-year-old nonsmoking couple found the least expensive plan would cost $787.84 per month for a $13,300 family deductible with no copays. The least expensive plan that included co-pays was $1,056.88, but had a $7,000 deductible and the most restrictive network. Assuming the least expensive plan, if either member of this young couple has a medical event, their total annual cost (deductible + premium) would be $16,454.08. This is a devastating amount of money for a young couple.

The simple solution to this problem is fixed benefit health insurance. Unlike a major medical policy where the policy pays all eligible expenses after the deductible and out-of-pocket maximum, a fixed benefit health insurance policy states exactly how much will be paid for each specified service. Examples of specified services may include: daily benefit for a 24-hour hospital stay, specified dollar benefits for specified surgeries, a specified benefit for doctor visits, and other specified charges. A great fixed benefit health insurance policy will have very solid benefits, a wide range of specified covered charges, a very comprehensive surgical schedule and more. The most important service that a fixed benefit health insurance policy can include is medical bill negotiation, a service that can significantly reduce out-of-pocket expenses.

What is really great about this type of policy is that it allows the insured to be a better consumer. Knowing how much your policy will pay you for a particular medical service allows you to better shop around and negotiate the price. But the best thing about this policy is the affordable premium.

The 62 and 63 year old couple is an actual client of mine who had been without insurance for 5 years as a result of high premiums. I was able to get them into a solid fixed benefit health insurance policy with a $5,000,000 lifetime benefit for $683 a month. That’s an annual savings of $15,792. As I explained to my client, the fixed benefit health insurance policy will do a great job of covering 70% to 80% of anything that might happen. If they actually saved the difference of $15,792 in premium, they would have incredible access to health care with very little out of pocket.

In 2014 I was diagnosed with colon cancer and had a partial removal of my large intestine (CP44205). I was then covered by a traditional major medical policy. My total out of pocket costs were over $7,000. If I had had the fixed benefit plan I’m selling today, not only would my costs have been zero, but I would have received a check from the insurance company for $4619. Not all medical events would have resulted in a check, and many could have resulted in out-of-pocket costs of several thousand dollars, but generally the savings would have more than offset those costs.

So, before you choose to have no health insurance at all, I strongly recommend that you take a look at the fixed benefit health insurance policy.

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