The fourth quarter has always been a traditional time to evaluate household items like health insurance, but the Open Enrollment period of the health insurance marketplace has created an even larger demand for the evaluation of health plans among Texans. Our agents begin fielding loads of questions regarding health care plans during this time period and most of them center around a common theme.
What is the cost of health insurance in Texas?
It doesn't matter if you are self-employed, own a business, or work for a business the costs of health insurance plans have escalated to crazy levels. We do have answers, but your age, location, and health can make a huge difference in the cost of your health care coverage. So lets take a look at what drives the `cost of your monthly premium for your health plan.
How Much Does Health Insurance Cost Per Month In Texas?
While we cannot give you an exact cost per month without some personal information that is specific to you, we can however talk about what is going on in the United States and Texas in general so that you can begin to narrow your search. In a recent study that was published by Bloomberg, it is documented that average cost for family health coverage in the US now tops $20,000 per year. That comes out to $1,667 per month for a family. That's crazy! You are basically paying a second mortgage for health insurance premiums that the average Texas family is paying to the insurance company.
The key factors that control what you are paying for health care coverage in Texas are not that surprising.
- Location - plans available and pricing varies by county
- Age - Your consumption of Medical Care that is covered by the health insurance plans go up as we get older
- Family Size - covering one person is always cheaper than five!
- Household Income - the Premium Tax Credit (aka Subsidy) can drastically lower your monthly premiums on health insurance marketplace plans
Those first three factors are universal to all health insurance plans sold, whether you live in Texas or some other place less fortunate. But the last factor is specific to the ACA Health Insurance Marketplace plans which can have some very different effects if you live somewhere other than Texas.
The factors of location, age, and family size are pretty self explanatory when thinking about medical expenses. The older your large family becomes the more times that they will need to interact with a healthcare professional. Those covered visits will generate more costs for the health insurance company to cover and more out of pocket costs for you in the form of copays, deductibles, and coinsurance. The use of health care services is what drives up the cost of insurance for individuals. The insurance companies will leverage Preventive Care to mitigate some of those costs, but since essential health benefits are covered without copay it can still drive up costs that have to be accounted for.
Household Income can be a sensitive subject to Texans. We don't like to air our laundry out in public so to speak. Since its inception, the Health Insurance Marketplace has been offering coverage options to families with and without Pre-Existing Conditions. It is a very key component of the ACA Exchange plans. One of the components of the health insurance coverage offered through the Health Insurance Marketplace is the Premium Tax Credit which is also known as the premium subsidy.
The Premium Tax Credit is an amount of money available to households to offset the high cost of Health Insurance Coverage based on your household size and adjusted gross income. The amount of subsidy available is based on a sliding scale of those items and the federal poverty level. The Health Insurance Marketplace then allows you to apply a portion of the tax credit against your monthly premiums keeping more money in your pocket for other things that come up in life.
So What's My Price?
Most families in Texas have their Health Insurance Program through their employer. As a result, the worker's average cost out of their paycheck is $500 per month which doesn't sound that bad. However, if you factor in Health Care Costs like deductibles, co-pays, and other out of pocket expenses that come with these plans, actually using your insurance that costs $6,000 per year can turn into a lot more very quickly. Especially since deductibles for major events continue to creep closer to $10,000.
While we do help employers find business health insurance plans, most of the Texans that we help find health insurance are self-employed, own small businesses, or work for a small business that doesn't provide health insurance. Many of these Texans opt for ACA Exchange based plans simply because of the Subsidy that helps keep premium costs down. These plans also allow for you to be covered regardless of pre-existing conditions. The downside of these plans is the deductibles tend to be somewhat outrageous and out of pocket maximums can be substantially large.
If you do not qualify for premium tax credits under the Affordable Care Act, you are likely looking for ways to save money on your plan to get that $1,667 down to a more manageable level. Costs can range from a few hundred dollars on limited care plans all the way up over $2,000 for larger or older families that have lower deductibles. As a result, many Texans are looking for Health Savings at a time when costs just seem to keep skyrocketing.
What Are My Health Insurance Options?
- Affordable Care Act - The health insurance marketplace policies sold on the ACA Exchange have differing levels of coverage that are described as Metal Tiers. Gold plans have the lowest deductibles and out of pocket costs for you. The plans with significantly higher deductibles can be a bit more cost effective lowering your monthly costs by as much as 20%. However, those deductibles can become punishing if you are hospitalized and are suddenly having to cough up $8,000 plus co-insurance.
- Short-Term Plans can have substantial cost savings for families that are not dealing with pre-existing conditions that would exclude them from clearing underwriting. Just know that maternity benefits are often excluded on these plans, if you are of that age and mindset. Since these plans can be issued for up to three years, they make a great bridge for an early retiree between a group employer plan and Medicare when you hit age 65.
- Limited Benefit Plans are great for folks who "never use the doctor". These plans can cover just hospital and surgical items rather than all of your daily outpatient type items. You have to be careful of what you are buying and understand the fine print, but this can be an option for folks who want to keep their sunk costs lower.
- Sharing Plans require you to pay cash for services and then submit for reimbursement, which can make them unattractive for those on a very tight budget. However, the cost savings are substantial because of the way that they operate. Just remember, they are not an actual health insurance plan and should be viewed with a bit of a cautious eye when it comes to financial solvency.
- Catastrophic health insurance allows you to dramatically lower the costs of monthly premiums by as much as 50% or more. The policy only provides coverage for you when major events happen. Think strokes, heart attacks, cancer, or major accidents requiring hospitalization. These health insurance policies do not care who you use for a primary care physician or if you go at all. Since they are not providing all of these low level services or processing claims for them, they pass the cost savings on to you. Using this type of coverage paired with a Direct Primary Care doctor can give you a GREAT experience rather than the run-around that we have all become accustomed to.
How Do I Find Exact Pricing For Health Insurance?
The great news is that you have options, and our independent health insurance agents help Texans secure all of these policies everyday. Insurance For Texans, as an independent insurance agent, can help you evaluate the pros and cons of each of these options along with the exact costs.
With some quick information, we can get preliminary pricing so that you can quickly evaluate if these options will work for you and how to best maximize your situation. To get started, just give us a bit of information below!