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Marketplace Insurance

Cost Sharing Reductions: How to Order a Burger but Get a Steak

Cost sharing reductions Cost sharing reductions

Steak is better than a hamburger (unless you’re 5)

Most would agree that steak is better than a hamburger, right? Unless, of course, you’re a 5-year-old. And I have one of those right now at my house. What’s the difference between me and her? I have eaten a lot more food and my pallet is much more developed. I have experienced good and bad food, so I have a better understanding of quality ingredients.

What if you were at a restaurant and ordered a hamburger, but when they brought the food out, they laid down a steak for you. Would you turn it away? Maybe if you thought it wasn’t yours. But what if the server said, “Oh, I’m sorry no one told you!  We have a special going on for a family of your size…when you order a hamburger, you get upgraded to steak!” You would probably think it was too good to be true. But guess what? This does happen for health insurance. It’s called Cost Sharing Reductions.

 

What exactly are Cost Sharing Reductions?

Cost Sharing Reductions are just a funny name for simply getting you a better plan at a lower price. (If you’ve been reading our blog, you know we first use Advanced Premium Tax Credits to get a lower cost on the insurance product.)

Let’s consider a middle-of-the-road silver plan with a $12,000 deductible, $15,400 annual max out-of-pocket, $30 to see primary care and $20 for generic drugs. Cost Sharing Reductions (available only for qualified families who choose silver plans) take the deductible down to $0 and the family max out-of-pocket down to $2,000 for the year, with both primary doctors and generic drugs provided free-of-charge. As someone who looks at insurance and health benefit budgets every single day, this is getting a steak plan at a hamburger price!

Let’s not forget though, opportunities like this are actually not available if your employer is offering old-school, traditional group health benefits. The good news is that you’re not stuck with the old way of health insurance. You can change at any time of the year to unlock “upgrades” like cost sharing reductions that might be available to you and your team.

 

What if I have no idea what I’m doing when it comes to health insurance?

Health insurance nowadays can feel like going to the grocery store to buy a single normal household product on Black Friday. It takes forever, there are tons of choices, and you don’t really want to be there. Or maybe it feels like going downtown to a restaurant at 7 PM on a Friday without a reservation. You end up settling for a different restaurant because you couldn’t get into where you really wanted.

Many years ago when my interest in health benefits stewardship started, I took advice from a friend. I trusted his experiences as wisdom. I ended up saving about $5,000 using his suggestion and even took those medical dollars with me after I left that job. It paid for my medical bills for nearly three years following! I was so thankful to have someone teach me and help me along the way with my health insurance decisions.

This is what Remodel Health is all about. We want to help you be innovative in a space where most people feel stuck. We want to help you steward your health benefit dollars more wisely than you ever have before. Our mission is to accomplish both of those two things in an effort to serve you, your family, and your team better than you’ve ever been served when it comes to health insurance. We want you to feel like you only ordered a hamburger, but ended up getting a steak!