Affordable Health Insurance Is The Holy Grail In California
Well, it depends on a few things. Number one is what price is affordable to you based on the medical services you need. Everyone’s budget is different. An “affordable” plan that doesn’t pay for what you want is pretty much useless and will end up costing you even more.
Number two sounds odd, but affordability is greatly affected by how much you earn each year. I'll explain later.
The third factor is where you live in California. The affordability of healthcare varies greatly from one region to the next.
In this article, I will lay out what plans are the most affordable health insurance in California, but the answer will probably not be what you expect.
Spoiler alert! I will list a number of plans that are typically the most affordable in certain regions of California.
I’ll also give you some strategies you can use to make your healthcare more affordable.
What Affordable Health Insurance Is Not
Many people equate affordable with cheap. This is typically not a good idea, especially if you have any medical needs.
Cheap health insurance is going to be catastrophic coverage. You’ll pay the cheap monthly premiums and you’ll also pay for all medical expenses (except for your annual checkup and 3 office visits).
Cheap Isn't Always Good
Catastrophic plans (also called Minimum Coverage plans) don’t begin to pay for anything significant until what you pay reaches a specific amount (typically $7,900 in 2019).
By the way, Minimum Coverage plans in California are only available to people under 30 years old.
What Is Affordable For You?
What is affordable for you is very specific to you. If you are healthy and rarely see a doctor, then a Bronze plan with fewer benefits might be all you need, so your “affordable” range will be lower.
If you take an expensive medication or need to see a doctor 3-4 times a year to monitor your medical condition, then a Silver plan with good prescription benefits is necessary so your “affordable” range may be a little higher.
As an example, let’s say you hurt your knee and need arthroscopic surgery to repair a torn meniscus. In a cheap plan, you will pay the full cost of the surgery, $2500 to $6000 depending upon where you have the surgery done. In a Silver plan, you will pay only 20% of the surgery cost, $500 to $1200.
What good is a cheap plan if you end up having to pay hundreds extra each month in order to refill an expensive medication, or for medical expenses?
As you can see, cheap is not necessarily affordable.
Your Income Plays A Big Part In What Health Insurance Is Affordable in California
The Affordable Care Act (or Unaffordable Care Act, depending upon your perspective) health plans tend to be more affordable for people with lower incomes. This is because Covered California provides premium assistance to some families with incomes that fall within a specific range.
Based on the size of your family, this chart shows what income range will qualify for premium assistance
For a family of 4, the income limit is $100,400.
California is also working to pass a new law that would extend the premium assistance to individuals and families that make more than these limits. Stay tuned and we’ll update if this happens.
Where You Live May Be The Biggest Factor In Affordability
Just like housing prices in the Bay Area are dramatically higher than homes in Los Angeles or San Diego, health insurance costs in Northern California are higher than they are in Southern California.
On average, someone in NorCal is going to pay 24% more than someone in SoCal for a health plan with the same medical benefits.
This difference is due to increased costs in Northern California as well as a general lack of medical competition in most of the lower populated northern counties.
Most Affordable Health Insurance In California
Since the affordability of health plans in California varies greatly between north and south, I’ll give you two sets of plans. One for the north, and one for the south.
These plans meet the criteria of affordability in price and benefits.
Most Affordable Health Plans in Northern California
Kaiser Permanente Silver 70 HMO
Valley Health Plan Silver 70 HMO
Chinese Community Health Plan Silver 70 HMO
Blue Shield Silver 70 HMO Trio (or PPO in counties without the HMO option)
Kaiser Permanente Bronze 60 HMO
Anthem Blue Cross Bronze 60 EPO
Oscar Health Bronze 60 EPO
Most Affordable Health Plans in Southern California
Oscar Health Silver 70 EPO
Health Net Silver 70 Community Care HMO
Kaiser Permanente Bronze 60 HMO
You’ll notice that most of these are HMO plans. That’s because the PPO versions of these plans are significantly higher cost. The insurance companies are using price to shift you towards HMO networks because it makes it easier for them to estimate the expected yearly costs.
As long as you understand how to use an HMO plan and how it’s different than a PPO plan you should be fine in an HMO.
To see what health plans are available in your region, you’ll need to get a set of quotes (button at the bottom of the article).
Strategies To Get Affordable Health Coverage
Strategy 1
A common problem in many households is that only a single person needs a higher benefit level. As a result, the family enrolls in a plan with higher benefits.
What we recommend is breaking the family into 2 separate health plans.
One member on a high benefit plan, and the rest of the family on a lower benefit level. This can result in a savings of hundreds each month.
"Financial Management"
Strategy 2
Since your ability to get premium assistance is based on your adjusted gross income (AGI), what can you do to limit or reduce your AGI? This strategy is more technical and only works if you have your own business or are self-employed and have control of expenses and how you recognize income.
There are various ways you can reduce your income. Buying a piece of needed equipment to increase expenses during the year, or postponing a project to delay receiving income until the next year.
The biggest ticket item is using a retirement plan to reduce your taxable income for the year (IRA or 401k). This enables you to directly deduct up to $19,000 (or $25,000 if you are over 50) from your Federal AGI number in 2019.
Summary
Based on that, we’ve listed some health plans that tend to be the most affordable in the regions of California where those plans are available.
The next step for you is to get some quotes showing what plans are available where you live, and what the pricing is. Click the button below to get your rates