Nevada to release health plans and premium costs

Let’s talk health insurance.

OK, we see your eyes glazing over.

Look, we know health coverage isn’t the most exciting topic. It’s probably not even the 100th most exciting topic. Or even the 1,000th.

But health insurance is one of the most important purchases you’ll ever make. And because the time to buy is right around the corner, we’re here to help you brush up on the basics.

If recent studies offer any clue, you need the help. Industry surveys show the insurance literacy rate of the general population is less than 15 percent, said Nevada Insurance Commissioner Scott Kipper. That means roughly 85 percent of you would flunk a quiz on terms such as deductibles and copays. The lack of knowledge about how health coverage works can lead to buying mistakes that could cost you thousands of dollars.

Worse still, a September study from insurer Aflac found that nearly half of Americans spent less than 15 minutes researching coverage in 2013, including 24 percent who took less than five minutes. Yet Americans spent 10 hours kicking the tires on a car, four hours crunching data on computers and two hours looking into what TV to buy.

Fifteen minutes is not a lot of time for a significant expense: The average Nevada family paid $4,164 in health-insurance premiums in 2013, according to eHealth, operator of the nation’s biggest private health insurance exchange.

Our crash course will tell you most of what you need to know to begin studying your options starting Thursday, when the state Division of Insurance releases 2015 plans and premiums. You’ll have about a month to get prepped. Open enrollment begins Nov. 15.

First things first: Why should you even look at coverage? At 23 percent in 2013, Nevada had the nation’s highest share of uninsured residents, according to the Kaiser Family Foundation and the U.S. Census Bureau.

Here’s why you might want to reconsider going without a plan.

NOT A SAFE BET

If you are in your 20s, you are what the experts call a “young invincible,” thinking you don’t need insurance. After all, you’re young. What could go wrong?

Well, a lot of things. You’re not at high risk for cancer or heart disease, but if you wreck your Harley and break both legs, you’ll pay tens of thousands of dollars in medical bills all on your own.

“You could place yourself in a position where you will be paying off a significant amount of money for the rest of your life,” Kipper said.

It may not be worth the risk, because insurance is cheaper for you now than at any other time in your adult life. If you’re a local under 30, you’re eligible for a catastrophic plan for as little as $83 per month, said Glenn Shippey, a Division of Insurance actuary.

Besides, the success of the federal Affordable Care Act rides on you. If you arrive at the ER with no insurance, everyone else pays more to cover your bill. And because you’re unlikely to get a chronic illness, your premiums help cover the costs of the older and the sick. If that sounds like an unfair tradeoff, remember: If you participate now, the system has a better shot of working when you need it.

If you’re in your 30s or 40s and you have kids at home, the need for insurance is obvious. But that message has gone over a lot of heads. The national rate of uninsured kids stayed at roughly 7 percent in the first six months of 2014 despite new federal subsidies, according to the Urban Institute’s Health Reform Monitoring Survey. Among adults, the ranks of the uninsured dropped 4 percentage points.

Freaked out by the high-premium horror stories you’ve heard? Take heart: The Affordable Care Act offers federal help for families that truly can’t afford a plan. If you have a spouse and two kids living with you, your household income would have to clear more than $95,000 a year before you would be on the hook for your entire premium. There’s no guarantee you’ll find cheap coverage, but it’s worth your while to check.

If you’re in your late 50s or early 60s, you may be gambling on avoiding the doctor until you’re 65 and eligible for Medicare, the federal insurance program for seniors. But you are in your prime for developing a chronic illness such as diabetes or heart disease. It’s important to have a doctor monitor your health, said Mike Murphy, president and general manager of Anthem Blue Cross Blue Shield of Nevada.

If you do get sick, you could be in big financial trouble because insurance enrollment is now mostly limited to a couple of months late in the year. Get diagnosed with cancer in February and you might have to pay out of pocket until the following January.

Plus, new rules limit how much more expensive your premiums can be than premiums for people in their 20s, so people your age are getting some price breaks they didn’t see before 2013. Again, it won’t hurt to shop around.

Also, almost all uninsured Americans younger than 65 face a federal tax that in 2015 will be 2 percent of their income or $325, whichever is higher.

If you’re on Medicare, you may still want supplemental private insurance for extras such as dental care, hearing aids, vision and alternative therapies such as acupuncture, which Medicare doesn’t cover.

Regardless of life stage or age, there are things all consumers need to know before buying a policy.

WHAT WILL YOU PAY?

So how do you determine a plan’s cost and ways to minimize the expense?

First, check your monthly premium. You’ll get a monthly bill from your insurer stating what you owe. It could range from around $80 for a young single to $500 or more for a family with kids. If you have a group plan through your job, your employer by law must pay at least half your premium. If you buy on your own through an insurer or broker on the individual market, you typically pay all. Buying through the state’s Nevada Health Link exchange could land you a federal tax credit to defray your cost.

Your premium is determined by your plan’s out-of-pocket cost, which is a balance of three potential expenses: Your deductible, your copay and your coinsurance. Not every plan has all three, but every plan has at least one. Look first for a plan’s total out-of-pocket cost to know what you could owe in a plan year. Then look separately for its deductible, coinsurance and copays.

Whatever the combination, paying higher out-of-pocket costs generally means a lower monthly premium because your insurer sees you as less of a risk. Conversely, lower out-of-pocket costs shift the financial burden to your insurer, so you can expect to pay a higher premium as a result.

For example, an Aetna Life NV Costco Advantage plan in 2014 carried an out-of-pocket maximum of $6,350 for an individual and $12,700 for a family, with a monthly premium of $213.38. A Humana Autograph Plus RX Plan with much lower out-of-pocket maximums, at $950 per individual and $1,900 for a family, cost $378.45 per month.

A general rule of thumb is that you can risk a higher out-of-pocket cost if you’re young and healthy because you’re less likely to use your coverage. But if you have chronic conditions and see the doctor a lot, you’re practically guaranteed to pay more out of pocket.

You might be worried about affordability, so keep two things in mind.

First, regardless of out-of-pocket cost or deductible, some services are free. Many catastrophic plans give you three primary-care visits a year outside of your deductible. You might have a copay, but it’ll usually be well below the full cost if you haven’t met your deductible.

Also, some services to treat or prevent chronic illness are free. For a full list of those services, visit doi.nv.gov/Healthcare-Reform/Individuals-Families/Preventative-Care/.

Second, don’t be “intimidated by the high cost of insurance,” Kipper said, because federal subsidies could help.

USE JUDICIOUSLY

Beyond out-of-pocket cost, another important, yet little-understood, part of health-insurance plans determines what you pay.

Your plan network has doctors’ offices, hospitals, clinics and other places where your insurer has already negotiated a discounted rate. Stray from that network, and deductibles and copays no longer matter — you might have to pay the whole bill. Going to the wrong place could literally cost you tens of thousands of dollars, Anthem’s Murphy said. A diagnosis that costs $2,000 at one clinic could run $17,000 at another, he said. Nor is there a legal limit on your plan’s out-of-pocket maximum if you leave the network.

So it’s essential to look before you buy to ensure your doctors or hospitals are in the network, and to check again before you seek treatment because networks can change. Insurer websites show regular network updates. Ditto for prescription drugs covered.

If you do go off-network, you may encounter one of the biggest shocks someone with insurance can get: balanced billing. Even in an emergency, your insurer may pay only half your bill, or reject it outright. The hospital will then bill you directly.

“The hospital is going to get its money no matter what. If your insurance company doesn’t pay, it will probably end up being your responsibility,” said Jake Sunderland, a state Division of Insurance spokesman.

Which brings us to another important FYI: Going to the ER is the most expensive way to get care, said Dave Allazetta, vice president of sales and marketing for UnitedHealthcare’s Nevada division. The average cost of an ER visit was $922 in 2011, compared with an average of $199 for a doctor’s office visit, according to the federal Agency for Healthcare Research and Quality. So save the ER for a true emergency, like a broken bone or a potential heart attack.

Also, look at your insurer’s online cost-comparison tools. Each major carrier lets you weigh provider costs once you sign up, so you know the most affordable places for care. Anthem, for example, shows a colonoscopy at the Digestive Disease Center on East Desert Inn Road averages $808 to $1,107, while the same procedure at Centennial Hills Hospital Medical Center runs $3,032 to $3,481. An ankle X-ray at any Healthcare Partners Medical Group office costs $24 to $29, compared with $301 to $368 at North Vista Hospital in North Las Vegas.

The higher the bill, the more you will pay out of pocket.

Remember your insurance won’t cover everything. Except for those wellness benefits, it typically won’t pay anything until you have paid out your deductible. If your deductible is $3,000, that means you’ll spend that much out-of-pocket before your coverage kicks in. Managers of doctors’ offices say some newly insured patients turn around and leave after finding what the visit will cost because they haven’t met their deductible.

If you’re still worried you’ll make a poor choice, or your options seem overwhelming, there’s plenty of help available. Insurers have counselors available via phone. Also, insurance brokers and enrollment facilitators can consider your situation and recommend alternatives.

Contact reporter Jennifer Robison at jrobison@reviewjournal.com. Follow @J_Robison1 on Twitter.