SECURE YOUR FINANCIAL FUTURE! INVEST IN YOU! Welcome back to Money 101, Invest in You: Ready. Set. Grow's eight-week guide to financial wellness. Today's challenge focuses on your health — specifically, making sure you have the right insurance. If you have an employer-sponsored health plan, chances are you aren't thinking much about the real cost of health care. Just like good health, people tend to not worry about it until it is gone. Or, you may have your coverage through the Affordable Care Act, also known as Obamacare. If you don't have any health insurance, you aren't alone. About 8.5% of Americans, or 27.5 million people, didn't have any at all in 2018. Yet, taking care of yourself — and your health — is important. We'll help you sort through all the options to make sure you are on the right track. Thanks again for joining me on this journey — and happy learning! Sharon
CHALLENGE #6: INVEST IN YOUR HEALTH Health-care costs What you pay depends on your plan. There are two main costs: your deductible, which is what you have to pay out of pocket before your insurance kicks in, and your premium, which is a monthly fee paid to the insurance company for your coverage. There is also usually a copayment, which is a specific amount or percentage you have to pay towards your covered medical services. If your plan is through your company, your employer likely picks up some of the premium and the rest is deducted through your paycheck. According to the Kaiser Family Foundation's 2018 employer benefits survey, the Average annual premiums for employer-sponsored health insurance last year were $6,896 for single coverage and $19,616 for family coverage. On average, covered single workers only paid 18% of the premium and those with family coverage paid 29% of the premium. The Affordable Care Act (ACA) has different categories of coverage, in what they call metal levels. The cheapest is bronze, which has the lowest monthly premium and the highest costs when you need health care. On average, the insurance company pays 60% of costs, while you pay 40%. The average deductible for single policies in 2019 is $5,861 and $12,186 for family coverage, according to an analysis by HealthPocket. The Average Monthly Premiums range from $376.33 to $898.14, depending on age. In the mid-range silver category, the company pays an average 70% of the health-care costs. The average deductible is $4,033 for individual coverage and $8,292 for family coverage, according to HealthPocket. The average monthly premiums range from $376.33 to $898.14, depending on age. Gold category plans have a high monthly premium and low costs when you need care. The insurer picks up 80% of the costs. Individuals pay an average $1,320 deductible, while family coverage has an average $2,853 deductible. The average monthly premiums range from $544.50 to $1,300.54, depending on age. The platinum level has the highest monthly premium and the lowest costs when you get care. The company pays 90% of your health-care costs. The average deductible for individuals is $286 and $571 for families. The average monthly premiums range from $681.48 to $1,629.54, depending on age. "It is health that is real wealth, and not pieces of gold and silver." — Mahatma Gandhi The plans There are different types of plans available. Your employer will offer you a few choices. These are also available through the Affordable Care Act exchanges. Depending on where you live, many or all of these types may be in each ACA metal level. There are four metal tiers in health insurance: platinum, gold, silver and bronze. The traditional fee-for-service plan offers the most flexibility but comes with higher premiums and out-of-pocket expenses. You choose your own hospital and doctors. There is typically a deductible and you are responsible for copays of about 20% of "reasonable and customary" medical expenses. Health maintenance organizations, or HMOs, are the most cost-effective and least flexible option. Pay a monthly premium and all of your medical care and services through the HMO are covered. You'll only have to pay a low-copayment per visit to use in-network providers. You must choose a primary care physician and may need a referral to see a specialist. Point-of-service, or POS, plans are more flexible than HMOs but usually require you to select a primary care physician. With this option, you can see a doctor outside the network, although the amount covered by insurance will be substantially less. Preferred provider organizations, or PPOs, are kind of a compromise between traditional fee-for-service plans and HMOs. You have control over your choice of doctors (including specialists), hospitals and pharmacies within a network of providers. If you stay within network, you'll pay a small copay. If you go out of network, there is usually a deductible and only 80% of the "reasonable and customary" costs are covered. Exclusive provider organization, or EPO, only allows you to get services from doctors, hospitals and other providers within its network — except in an emergency. Go to healthcare.gov for more information on the plans offered through the Affordable Care Act. The bottom line Deciding on health-care coverage can be confusing, but it's important not only to your physical health but also to your financial well-being. Next week, we'll challenge you on other types of insurance — for your life and your property. Enjoying this series? Check out CNBC's other newsletters on everything from investing to politics. Subscribe here.
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