How does health insurance work? A silver plan in action

A Quick Recap

Let’s do a quick recap of what it means to have a silver plan. As part of the Affordable Care Act (ACA), health plans are organized by metal tiers. Generally speaking, they follow this schedule:

That means insurance companies will cover 70% of health care costs for covered services under a silver plan once the deductible has been met. You are responsible to cover the remaining 30% of expenses as part of your out-of-pocket costs. These expenses may include things like deductibles, coinsurance, and copays.

In general, silver plans tend to have a lower out-of-pocket maximum than bronze plans and higher out-of-pocket costs than a gold or premium plan. It’s important to understand what your out-of-pocket max is when choosing a plan so you know how much you may be on the hook for if something happens.

Comparing Options

For the sake of an example, let’s consider Decent’s Trailblazer Silver plan vs. an alternative silver plan.

Now let’s say you’re a 29-year-old freelance writer with an awesome ski trip happening in January. You and seven of your closest friends are headed to Breckenridge for some major shredding. On the third day of your trip, you take a nasty spill and tear your ACL ...ouch! You don’t realize right away that it’s a torn ACL, but you do know that you need to head to the emergency room.

At the ER, the doctor does some X-rays and thinks you may have bruised your bone and sends you on your way, but recommends you follow up with your primary care physician if the pain does not go away. When you get home, you visit your primary care physician, who orders an MRI after seeing that the pain has not subsided and you are having trouble walking. The results come back and it looks like you have torn your ACL, so your primary care doctor refers you to an orthopedic surgeon. The orthopedic surgeon confirms the diagnosis and recommends surgery to repair.

Assessing the damage

So how does all this tally up? First, let’s look at a few important numbers:

Ok, on our plan, your deductible is $4,500 and your out-of-pocket max is $7,150. That means you’ll be responsible for 100% of copays until you reach $4,500, at which point more coverage will kick in. At the end of the day, the maximum total amount you can be responsible for is $7,150. In any event, it’s the beginning of the year and you haven’t spent any money on covered health services, so no matter which silver plan you have, you have not paid anything towards your deductible yet. Now let’s see how this plays out...

Prior to surgery, you would have spent $550 if you were covered with our Trailblazer plan or $1,308 if you were covered by another silver plan. When you enter ACL surgery into the equation, things start to get pricey. The cost of ACL reconstruction—including the surgery and surgeon’s fee, anesthesia, and graft—can range from $20,000 to $50,000. Yikes! But wait, good news. Remember, you can only be responsible for your out-of-pocket max if you are covered by either insurance plan. First, we have to figure out how much is left on your deductible.

With Decent’s Trailblazer plan, you will have to pay $3,950 before additional coverage kicks in, but on the alternative silver plan, you still have to pay $6,592. Let’s see how that works with the total cost of the surgery. Let’s assume the total cost of surgery is in the middle at $35,000

How it plays out with the Trailblazer plan

You will pay $3,950 toward the surgery reach your deductible. At that point, your post deductible copays for your surgery kick in. On the Trailblazer plan, you simply pay a $500 facility copay and a $50 surgeon fee. Your total out of pocket costs are your $4,500 deductible plus $550 in surgery copays, bringing the total to $5,050. All said and done, it cost $5,050 to repair your ACL and you paid minimal upfront costs to get it looked at right away.

How it plays out with an alternative silver plan

You will pay $6,592 toward the surgery reach your deductible. At that point, insurance will kick in to cover 70% of costs and you will be responsible for 30% on the remaining $31,050 of surgery costs. The 30% equates to $9,315. Your out-of-pocket max and your deductible is $7,900, which means you already hit your out-of-pocket max when you reach your deductible. All said and done, it cost $7,900 to repair your ACL.

In this scenario, the Trailblazer plan saved you money upfront and in the long-run. You managed to save $2,850 (enough to hit the slopes again, a few times over) under our plan. What’s more, if you need to go to your primary care physician again to check up on your ACL or just because you got a cold later on in November, you can do it for free. Other plans will continue to charge you copays throughout the year, which can really add up.

For more information about our Trailblazer plan, visit Decent.com and get your free quote today!