I’ve gotten a ton of requests from you all to cover healthcare related issues that us millenials are facing. Not even three days after receiving the first request I was introduced to a campaign called Young Americans for Affordable Healthcare by the non-profit SHOUTAmerica. At that point I took it as a major sign from the Universe that I needed to talk about this on the blog.
We all know that healthcare has become a huge issue in the U.S. and I’m right there with you in wondering why a first world country can’t get their shit together in the healthcare department. Sure, we just had the Affordable Care Act go through, which increased coverage for millions of Americans (myself included), but we really don’t know what this is going to end up costing us. The fact of the matter is that healthcare in America is a complicated hot mess, and we’re going to have to learn how to maneuver it.
First things’s first: Practice Preventative Healthcare
Preventative healthcare can save you a lot of money in the long run. What do I mean by this? Eating right, exercising, meditation, stress management - all of this can make a huge difference in how much you shell out for healthcare.
(If you're not sure where to start my dear friend, personal trainer and blogger buddy Diana Antholis just launched an eBook to help you out! Make sure to check out Unleashed: Live the Centered, Balance, and Sexy Life You Deserve)
But what about the health stuff I can’t control? What’s that going to cost me?
Now, obviously we’re all big on preventative healthcare like eating right and exercising, but as one of you so eloquently put it via Facebook, “We all try to live healthy but sometimes the flu, a cavity, or genetically poor eyesight gets in the way.” (Shout out to MaryBeth Tellez in Long Island for that one!)
And if life’s medical mishaps aren’t enough to get you to start wondering about healthcare costs check out some of these statistics:
- Health insurance costs for younger Americans in the individual market could rise by 42% or more (The Hill)
- Single adults between the ages of 20-29 can expect to see higher premiums (Contingencies, Jan-Feb 2013)
- For a 27 year old making $33,500/year premiums are expected to jump from $2,400 to $3,183 (Contingencies, Jan-Feb 2013)
You can also find numbers about how healthcare has become a huge financial burden for young adults all over the place including Forbes, The Washington Post and The Huffington Post. (If I’m being frank, my head hurts from reading all the information out there. It’s endless!)
I’m not telling you guys this to scare you. I just want you to be aware of what’s going on before I delve into how we can manage this. In fact, this may turn into an ongoing series on the blog, but for now we can start with these steps:
Step 1: Set up an emergency fund.
Before you start looking into individual healthcare plans or what your employer offers you need to head on over to the bank and open up an emergency fund. Why? Because even with insurance many times you will have to pay for something out of pocket.
Take it from personal experience, even though I have insurance (and one that is considered to be quite good) I have still had to pay for a lot of stuff. As a result my emergency fund has become my lifeline when I need to go to the eye doctor or get a wisdom tooth surgically removed (which is still costing me upwards of $300 despite the fact that I have insurance).
Besides, it’s just smart finances to have an emergency fund.
Step 2: Learn some lingo.
You can do all the research in the world but if you don’t know what the hell they are talking about it’s useless. I have oftentimes found myself reading about insurance and saying “What the hell is a PPO? HMO? WTF? Aaaah!” Since I am sure I’m not the only one here is a basic rundown of the different kinds of plans:
HMO: You choose a primary physician within a network who then will give you a referral for a specialist if you need to see one. Prices for visits are fixed for primary physicians (usually $25-$30) with specialists being higher at ~$45.
When treated under a HMO you are usually only responsible for copayment which has its own copayment (~$150).
Prescriptions have a copayment as well which falls under different categories for different price ranges depending on what medication is being prescribed. You can talk about brand name and generic meds here.
PPO: When treated under a PPO you also designate doctors from within a network but also have the option to see a doctor from outside the network.
Pro: you have a wider selection of drs to see both locally or when traveling.
Con: in addition to paying the copayment you are responsible to a certain percentage of the service rendered price (usually 15-25% depending on your plan).
- Prescriptions: same Information for prescriptions as HMO prescriptions.
- Hospitals: In addition to the copayment you are responsible for a certain percent of the hospital bill (15-25% depending on the plan you have)
PPOs have what are called "out of pocket expenses." depending on your plan within one year an amount is designated by the insurance company. Once you reach that amount you are only responsible for copayments when visiting a doctor or hospital. Usually this amount is not met unless you get really sick and have to be admitted into the hospital for an extended period or for a major surgery.
PPOs have FSA (flexible spending accounts) which is money deducted from your paycheck that can be used for copayments at doctor offices, hospitals or for prescriptions. Might or might not be offered by your employer depending on the plan.
FSA amounts can be personally chosen based on how many times you feel you will need to go to the doctor or how many prescriptions you will be purchasing in a year. (I.e. max for blue cross blue shield is $1200).
POS: Combination of HMO and PPO. It's combination is aimed at for those who need a more limited insurance. More limited coverage for lower costs.
You choose your primary physician from within a network but are able to see a specialist physician from outside the network if needed.
Pro: Lower costs for those who don't have major health issues or for those who do not need to see a specialist periodically.
Cons: More independent. Patient does paperwork themselves. Payments are sent in by patient by mail. Patient must keep track of all payments made and receipts for payments made. Patient is able to see a doctor outside the network but insurance company will only make minimum compensation to patient.
Prescriptions/co-payments info is same as HMO.
Primary physician monitors the patients major health care plan.
(Kudos to my bestie Mel who is not only studying to be a doctor, but is also a whiz at figuring out how healthcare works. This entire section would not have happened without her!)
Step 3: Research, research, research.
The thing about health insurance is that a lot of determining factors are in play: where you live, what is offered in that area, what companies are in your area, what your employer offers, etc.
This is the part where you need to take matters into your own hands and do some major research. If you’re married and your spouse’s job offers insurance, check out the benefits and see if they suit your needs at an affordable price. If you’re self-employed or don’t get insurance through your job, research the individual plans of different companies. If you have a family check out family plans.
You can even check to see if the local public hospital offers some sort of health insurance plan. Local cities also sometimes offer low cost insurance options by partnering up with companies.
Different things work for different people. Your job is to figure out what you need, figure out who offers it in your area, and compare.
Then, of course, you need to fit it into your budget. But first, figure out what it’s going to cost you and then worry about budgeting.
Was this helpful? Did you guys learn from this? What else do you all need to know? I am all ears!