Ways to afford health care costs: Part 6

Calculate how much you spend out-of-pocket for total health costs. Three reasons why it can save you a bundle.

Affording health care costs is challenging, even with health insurance. Many Michigan residents are going without medical care, despite having health insurance. Health insurance enrollment season for 2016 is approaching for employer based and private health insurance plans. This article will focus on some positive actions you can do to evaluate your current needs, finding the right plan for you, and affordability.

The Michigan Department of Insurance and Financial Services (DIFS) approved rate increases that average 6.5 percent for health care plans in the Health Insurance Marketplace for 2016. The Health Insurance Marketplace is the federally-facilitated marketplace put into motion by the Affordable Care Act of 2010, which Michigan participates with. Open enrollment starts Nov. 1, 2015 to Jan. 31, 2016. Read details of rate hikes for specific insurer plans.

Out-of-pocket health care costs have risen (6 percent in 2013), faster than wages (1.9 percent), according to the Center for Healthcare Research and Transformation report from the University of Michigan. The report covers health insurance costs in 2013. This is before major provisions of the Affordable Care Act were implemented. However, the report found some interesting data about out-of-pocket expenses.

Employers are now asking employees and individuals to pay more copay and deductible costs. In 2014, 41 percent of employees nationally had deductibles of $1,000 or more, compared to only 10 percent in 2006, according to the 2014 Employer Health Benefits Survey. These trends are only likely to grow based on health care costs projections.

The Underinsured are persons who are insured but living in households that spend a high share of annual income on medical care. The research found these individuals are more likely to skip medical tests and treatments. They also do not fill prescriptions. For chronic conditions like diabetes, that can lead to more serious, and more expensive, health expenses.

Doctor visits, medicine, braces and glasses are some expenses you have to pay for beyond an insurance premium. The good news is there are ways to manage your health care costs to save money. Also look for related articles on reasons to have health insurance (Part 1), estimating total health care out-of-pocket expenses (Part 2), special health savings accounts (Part 3 and Part 4) and correctly filing your federal income tax return (Part 5).

Many people enroll in the Marketplace in silver and bronze plans with the lowest premium. But for patients with regular health care needs, much of their annual health expenses are also determined by the cost-sharing structure of the plan they select. The National Health Council has created a free, online calculator which is easy to use, helps people have a better understanding of their health insurance marketplace options, and find coverage that meets their individual health care and budget needs. The free calculator shows how an individual’s total annual health care spending can vary based on plan selection.

Michigan State University Extension provides education about health insurance basics, including the why, what and how for making a smart decision. Find out about Smart Choice: Health Insurance and factual information online.

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