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Health Care Guide For The Self Employed

Tip 5, The Singles Mom’s Guide to Health Insurance

Beware anything that looks too good to be true!

 

Yes, your parents were actually right on this one.

Insurance is just math. If it’s cheaper, there is a reason. I have found that most of the time those reasons look like limits on care.

For example, many “cheaper” policies limit cancer coverage to $500,000. Sorry, but many
forms of cancer can eat that up in a month or less. In those types of plans, you would be
left holding the bag on the remaining cost of treatment, or WORSE, having the hospital or
physician refuse to treat you.

If you are looking at insurance options and one is much cheaper than the others, find out
why before you sign up! They often have clauses that lock you in for a year or may not be
qualified coverage so you can’t get in through the marketplace. It may be cheaper because
it excludes something you don’t care about (like maternity when you are done having kids),
but you need to read the fine print. And I mean the 130+ page document that outlines
everything.

Or ask a knowledgeable local agent who has probably read the contract for fun,
like the insurance nerds we often are.

 

To download the entire guide, click here. 

Single Mom's Guide to Health Insurance

Tip 4, Single Mom’s Guide to Health Insurance

Single Mom's Guide to Health Insurance

Know your max liability

 

So many times, people get hung up on getting a lower deductible and having copays for something to be considered a “good” plan. However, most Americans miss the absolute most important thing in their health insurance documents: The Out-of-Pocket Maximum.

This is the most you would pay in one calendar year if everything went horribly wrong. If
you have health insurance, this is the maximum of liability and it’s a number you need to be
aware of!

For example:

I often have clients tell me they want the “best” plan and are willing to pay for it! They want a
$250 deductible. In my state, the $250 deductible plan has a $7,900 out-of-pocket maximum
and is often 30% higher than an HSA plan for monthly premiums.
However, if they enroll in an HSA they can often get a lower out of pocket maximum. My plan
is a $4,500 deductible, but that is also the out-of-pocket maximum. At 30% less expensive
per month, it’s an absolute bargain! But most people ignore this plan because all the see is
the deductible.

Let’s look at an example:

Johnny needs a $60,000 heart surgery.

Plan 1: He’s paying $500 a month to get the lower deductible. That equates to $6,000 a year
in insurance premiums. When he has his surgery, he will pay $7,900. So, in total he spent
$13,900. Which beats the pants off $60,000 any day! But it’s not the best he could have done.

Plan 2: He is now enrolled in the HSA plan. He is paying $350 a month. That equates to
$4,200 a year in insurance premiums. BUT when he has his surgery, he pays $4,500. That
means he spent $8,700 less than on the “best” plan. But wait! He also got to put that $4,500
through an HSA account and gained the additional tax savings.

 

Read more here: The Single Mom’s Guide To Health Insurance