Insurance expert advises: understand premiums, coverage, Obamacare subsidies and how much risk you want to assume

‘Anyone buying health insurance this fall faces a daunting task: having to choose among multiple, often-complex options that offer widely varying degrees of protection,” Trudy Lieberman of the Rural Health News Service reports in her latest column, syndicated to supporting organizations.

The new options include association health plans for small-business groups, short-term policies that may last from only a few months to a year (but can be renewed for three years in some states). “Then there are plans offered by church ministries that look like insurance but really aren’t,” Lieberman writes. “Plus, multiple and complex options remain from the Affordable Care Act.”

Lieberman advises, “Before you comb through the fine print in an insurance policy, think about these major factors: The more you pay in premiums, the more you get in benefits. Many of the new options don’t have to cover all of the Affordable Care Act’s 10 essential benefits, and most insurance experts believe that in order to offer cheaper premiums, many of them won’t.”

Low premiums and fewer benefits “may seem attractive,” especially to older people who don’t want to pay for mental-health and maternity coverage, Lieberman acknowledges. But the 10 essential benefits “also include prescription drug coverage, generous hospital coverage, emergency services, and rehabilitative services that are important to older people.”

And there are pitfalls. Lieberman says some of the new policies “will limit hospital coverage to a certain number of days, or they might limit radiology services or drug coverage. The new so-called short-term policies will come with few if any regulations from the federal government or state insurance regulators.”

Once you grasp the relationship between premiums and coverage, “The next big decision is how much risk you want to assume if you become seriously ill,” Lieberman advises. “In other words, how much can you afford to pay out of pocket? For a large portion of Americans, the answer is not much. The Commonwealth Fund recently found that nearly half of working age adults could not pay an unexpected medical bill of $1,000 within 30 days.”

Lieberman, who has covered health insurance for decades, writes, “Over the years, I’ve heard too many families say they are healthy, aren’t going to use the insurance, and might as well buy the cheapest policy possible – or none at all. I’ve interviewed many people who took that position only to end up later in bankruptcy court when unforeseen illness struck because they had no insurance and not enough money to pay the bills.”

Once you understand your own situation, Lieberman says, “Look at the offerings on your state’s insurance exchange. Obamacare polices have gotten a bad rep almost since the beginning because they tend to be pricey for families that don’t receive an income-related subsidy to help cover the premium. About 87 percent of people who buy on the exchanges do get a subsidy.”

And you may qualify for a second subsidy, cost sharing for people “with very low incomes who buy certain Obamacare policies. Those subsidies help pay for the deductibles and coinsurance that many of the policies require,” Lieberman writes.
Lieberman asks, “What trade-offs are you prepared to make this year?” and asks you to tell her by emailing For her entire column, and earlier ones, click here.
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