In our opinion, very generally speaking the best health plan is a high deductible Silver plan obtained on the Health Insurance Marketplace. This is due to the plan being eligible for an HSA (Health Savings Account), as well as both Premium Tax Credits and Cost Sharing Reductions subsidies.
Beyond that, the best plan for an individual or family is going to depend on the income and needs of that family!
Keep reading to better understand why the above is in our opinion the case.
Bottomline: The general logic is this, a high deductible silver plan qualifies for all assistance types, this means regardless of how your income changes the plan can benefit you. Given that, a Silver plan with a high deductible is the safest general recommendation and a good starting point for consideration when shopping for plans… however, because each family’s needs is different, each family really needs to shop for plans with their needs and income in mind.
Why a High Deductible Silver Plan is a Good Starting Point
- While the high deductible may seem off-putting at first compared to lower deductible plans, the advantages of an HSA actually outweigh the perks of having a lower deductible. Keep in mind “high deductible” encompasses a large range of deductibles (see different types of Silver plans heading below).
- When we compare high deductible health plans, it’s hard to argue against the flexibility of a Silver plan, it’s the only plan that qualifies for all cost assistance types!
- Even if you don’t qualify for cost assistance now, a Marketplace plan allows you to claim tax credits if that changes throughout the year.
- The biggest drawback to Silver plans is that they can have narrow networks. Typically wider network plans have higher premiums. This can vary from region to region, so make sure to compare Silver plan networks.
- At the end of the day, choosing the right plan involves knowing your families medical needs. There is no one-size-fits-all solution, but if we had to pick one the HSA eligible Silver plan would be it. Learn more about comparing plans based off medical needs here.
Get the details on why we consider an HSA eligible high deductible sliver plan to be “the best plan” on the private individual and family market, regardless of income or medical needs.
SHOPPING TIP FOR 2019: In past years we had generally suggested a Silver plan with an HSA as a blanket answer for what the best plan was. However, things have changed a bit starting in 2018 plans due to some insurers raising premiums on Silver plans. Make sure to check out Bronze, Gold, or even Platinum plans too. Silver plans are still smart for those who qualify for out-of-pocket cost assistance, but those making 250% or more of the poverty level may find other “metal tier” plans offer better value. In some cases, a Bronze plan with an HSA will offer the best value despite the high out-of-pocket costs to those who can afford to pay a little more up-front. Learn more about why non-Silver plans may offer the best value in 2018.
The Different Types of Silver Plans
HSA eligible Silver plans come in all shapes and sizes. Specifically, you’ll need to choose the right option based on you and your families medical needs. For some this will mean a higher end Silver plan that just barely meets the 2019 requirement of Self-only: $1,350 and Family: $2,700. For others it will mean getting close to the Self-only: $6,750 and Family: $13,500 maximum deductible.
People should consider how much care they need and the value of things like copays (which kick in before the deductible is met) and coinsurance (which kicks in after). People should also consider doctor and drug networks, and the insurer as a whole. Some people will go Gold, Platinum, or Bronze based on their needs to get the best value. Some will pick what is best in the short term and sacrifice long term value. Despite the benefits of a Silver plan under the ACA, it’s still truly a personal choice.
Why A High Deductible Marketplace Silver Plan is Our Pick for Top Health Plan under ObamaCare (the Affordable Care Act)
Unless they qualify for Medicare, Medicaid/CHIP, or employer coverage most people will get the best value out of an HSA eligible high deductible Silver plan purchased on the Health Insurance Marketplace.
Here is why a HSA eligible Silver plan obtained on the Marketplace is such a smart buy:
- High deductible health plans are HSA eligible, meaning they allow you to contribute tax free dollars to a Health Savings Account to pay for out-of-pocket medical expenses including dental and vision.
- A plan is considered a High Deductible plan if it has an annual deductible of more than $1,300 for self-only coverage or $2,600 for family coverage after cost assistance. HSA holders 55 and older can contribute an extra $1,000.
- The amount you contribute to an HSA rolls over each year, so there is no “use-it-or-lose-it” rule.
- If you fully fund your HSA each year, and make sure to always shop in-network, you could just find yourself never facing un-payable medical bills again due to new limits on out-of-pocket maximums.
- Contributing to your HSA lowers your Modified Adjusted Gross Income (MAGI). Lowering your MAGI could potentially allow you to project less income up front to qualify for greater assistance, avoid repaying excess tax credits or to claim more net tax credits on your tax return, and it can even qualify you for a lower tax bracket.
- The annual contribution limit for your HSA is $3,350 for an individual and $6,650 for a family.
- Silver plans are the only plans that qualify for both Premium Tax Credits and Cost Sharing Reduction subsidies.
- Silver plans are only offered on the Health Insurance Marketplace (although a qualified non-marketplace insurance agent can help you enroll).
- Silver plans are the only plans that allow you to adjust both out-of-pocket and premium cost assistance if you gain or lose income during the year (other Marketplace plans only qualify for tax credits).
- Only Marketplace plans allow you to claim tax credits on your tax return. This is especially helpful for those who project a high income, but then end up claiming less on their taxes.
- Most Silver plans, at most cost assistance levels, are HSA eligible. Be aware, if you adjust cost assistance during the year and and that lowers your deductible past the threshold, you may not be able to contribute to your HSA, but you can still use whatever amount of money is in there from previous contributions.
- Other smart choices include other tiers of HSA eligible Marketplace plans for high earners (as they can hedge on the bet they won’t need cost assistance) and higher premium plans with low coinsurance and copays for those who needs lots of drugs and medical care. Typically this won’t result in annual savings, but will rather curb the amount of money spent at any one time.
- In general the only remaining factors you’ll need to consider are networks and benefits. Generally go with a multi-state PPO if you travel, just a PPO if you don’t know who your care providers will be, and an HMO if you know what care providers you’ll need. Make sure to double check your plans drug network and provider network before enrolling. If it’s not in-network, it’s typically not covered!
When Is A Silver Plan Not “the Best Plan”
The more money over 400% of the Federal Poverty level you make, the less of a chance that you’ll ever take advantage of the Silver plans cost sharing reduction subsidies, even in worst case scenarios. If you are young and healthy, you may want to choose the cheaper bronze plans as a form of “catastrophic coverage”. You’ll pay less up-front, but will owe more during the year if you use care. This still pairs with an HSA for tax benefits.
If you need a lot of drugs and care for your family, and are on a very specific budget, there are times when a more generous plan make sense. Things that could influence a family to buy a Gold or Platinum plan would be having a very high income, needing a lot of very specific care (networks), and needing expensive drugs (some higher end plans can have more generous cost sharing on drugs).
At the end of the day, you’ll need to compare plans based on your income and medical needs. But, for most people. a HSA eligible Marketplace Silver plan is going to win out when compared to most plans inside or outside of the Marketplace.