Question: My wife and I are self-employed and have a family of 4. We don’t qualify for subsidy in Covered California. Can you help us understand why one shouldn’t always go Bronze with HSA vs. a lower co-pay plan e.g. Platinum? Doesn’t the tax benefit of an HSA and the lower OOP costs of Bronze always mean a lower maximum, after tax health care spend? Under what circumstances does it make sense to purchase the Platinum plan?
Answer: People with chronic health conditions buy the platinum plan. For example, 40% of platinum plan users are diabetic. They know they will have significant medical expenses and they’d rather pay the higher insurance premiums than the out of pocket expenses. The out-of pocket maximum for platinum plans in 2016 is $4,000.
Healthy, more affluent people, see the Bronze HSA compatible plan, as a better option. For these people the $4,500 deductible (2016) is not a deal breaker because they have the money, if necessary. Because they are healthy, their out-of-pocket costs should be very low most years. Then of course, there’s the tax benefits and lower premiums. The out-of pocket maximum for platinum plans in 2016 is $6,500.