It’s tax preparation time in America.  Whether you do it yourself with a software package like TurboTax or you have your accountant or CPA handle your tax return, one question everyone will answer this year is, “Did you have health insurance in 2016?”.

If you were employed and your employer provided a medical plan for you, lucky you.  No tax penalty for 2016.  However, you are still very likely seeing higher monthly, higher deductibles and higher copays for office visits and your prescription medications.

But what if your employer can no longer afford to provide medical coverage or the insurer drops the plan your employer provided.  Or, like many, you are out of work and your benefits have come to an end.  If you had a plan, you may be able to take advantage of COBRA (Consolidated Omnibus Budget Reconciliation Act), or in layman’s terms, Continuation of Health Coverage.  Quite simply, you and your dependents are allowed to continue coverage under the plan you had with your employer as members.  But, it comes at a cost.  I’ll use myself as a case study.

In December, my position was eliminated.  My COBRA monthly premium for my wife and I was quoted at $1401.79.  That includes medical, dental and vision coverage.  Grand total for the year: $16,821.48.  I waived my right to COBRA.

In order to avoid the Individual Mandate Penalty for not being insured, I needed to find some coverage.  So, like many I surfed my way over to HealthCare.gov to see what was available.  I live in Washington so the links took me to the Washington Health Plan Finder website.  As it turns out I had 27 plans to compare to find something that would fit our budget and healthcare needs.  As an example I found a Bronze Plan with a monthly premium of $570.66 and an annual deductible of $13,600.  Annual total:  $20,447.92.  And that does not include any dental or vision benefits.  And I can’t choose the physician I see or the hospital I want to use for ER visits or admits for more serious matters.

Suddenly the words of my financial advisor came back to haunt me.  When we sat down to review or finances and how to structure our budget after the layoff, he told us the following,

“Ten years ago the number one question our clients asked was, ‘do I have enough money to retire?’  Today the number one question is, ‘do I have enough money to afford health insurance?’  You guys need to budget $2000 per month for health insurance.”

I thought he was crazy.  Now I know different.

THE NEW OPTION IN HEALTH COVERAGE

I had one more option to investigate; membership medicine and health sharing accounts.  A physician I have known for many years left his thriving traditional practice a few years ago to build a new practice based on a monthly membership fee, lower costs, no appointments and actually practicing medicine and caring for patients rather than managing disease and hoping to get reimbursed by the big insurance companies.  Along the way the practice partnered with Liberty HealthShare.

Liberty is a Christian organization that “shares” in covering expenses for other members in the organization.  Each member pays a monthly share amount based on family size, medical needs and the plan they choose.  Each month the shares are totaled and those in need have their medical expenses paid.  The plan we chose is only $379 per month with an out of pocket annual ‘unshared‘ expense of $1000.  The monthly fee we pay at Assurance Healthcare and Counseling is only $180.  Our total monthly healthcare costs are now $559 per month; $6708 annually.  And we don’t pay the Individual Mandate Penalty.

In addition to the money saved, because Assurance does not accept insurance payment of any kind they are exempt from many types of patient privacy issues that are mandated by the federal government.  For example, no requirement to have Electronic Medical Records, and no HIPPA requirements.  So for those worried about medical records and personal information falling into the wrong hands, this medical practice model eliminates much of the risk.

In closing, it pays to do your research.  Perhaps Liberty or a similar health-sharing organization will fit your needs and budget in 2017.