Squeezing extra savings from your $0/month Obamacare plan

Squeezing extra savings from your $0/month Obamacare plan


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This article was first posted October 1, 2018.


Note: The open enrollment period for Obamacare starts Nov 1st. See Healthcare.gov .

Last November I noted that in my Washington State zip code I can now get an Obamacare Bronze Plan with a $0/month premium on an income of $41,000/yr. Many retirees could easily make a six-figure annual withdrawal from a retirement portfolio while keeping their realized taxable income to $41,000/yr or less. (See link: Trump Obamacare sabotage making premiums even cheaper for millionaire early retirees. )

While free health insurance is a tremendous perk for an early retiree, you may be able to save even more if you don't use your health insurance and instead pay for you medical expenses out-of-pocket. Essentially, that means using your "free" Obamacare plan as catastrophic health insurance.

Of course, this is only an option if you're healthy and are fairly certain that your annual health care spending will remain below your annual deductible. If your medical spending is likely to exceed your deductible, then it makes sense to pay the inflated prices that come with using your insurance to make sure everything is covered.

Prescription Drugs

No area of health care has more price gouging and fraud than prescription drugs. You can't rely on your health insurer to get you the best deal on your prescriptions. Check prices on GoodRX or Blink.com and compare it to what your health insurer charges.

I take three cheap generic drugs. If I fill the prescriptions at Costco or Walmart and don't use my Kaiser Permanente insurance, I can get a year's supply for $320. The cost is over $800 if I use Kaiser.

X-rays, MRIs, and Lab work

Whenever your doctor orders any diagnotic tests or lab work, ask for a written order that you can take to any provider, then compare prices. A stand alone medical imaging center in the strip mall near your home is likely cheaper than wherever the doctor's office is going to send you. Similarly, you can order lab test's online and get prices up front. (See, Ulta Lab Tests or Direct Labs.)

Doctor's Office Visits

Under Obamacare it may make sense to change your health insurer from year to year to get the best price. That may result in some of your doctors being "out-of-network". Rather than change doctors, it may make sense to keep an out-of-network doctor. If you pay cash up front and don't use your insurance, you may get a better price. And switching doctors has additional costs as the new provider will need extra time to get up to speed with your medical history.

Resources for additional information.

Bloomberg.com --- The Secret Drug Pricing System Middlemen Use to Rake in Millions
https://www.bloomberg.com/graphics/2018-drug-spread-pricing/

Wall Street Journal --- Behind Your Rising Health-Care Bills: Secret Hospital Deals That Squelch Competition
https://www.wsj.com/articles/behind-your-rising-health-care-bills-secret-hospital-deals-that-squelch-competition-1537281963?mod=hp_lead_pos5

Time Magazine -- Bitter Pill: Why Medical Bills Are Killing Us
http://healthland.time.com/2013/02/20/bitter-pill-why-medical-bills-are-killing-us/

How Millionaires Get Obamacare Subsidies Intended to Aid the Poor, by Dan Mangan,CNBC,January 26,2016
http://www.nbcnews.com/business/personal-finance/how-millionaires-get-obamacare-subsidies-intended-aid-poor-n505386



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