How to Talk Health Insurance at the Holiday Table

We hope “How to Talk Health Insurance at the Holiday Table” helps you understand the rules of health insurance and how they affect who has coverage and how much they pay. Here are the assumptions that ClareFolio made in the video and its calculator:

• Key terms. The terms “healthy” and “unhealthy” were used to keep the content simple in the video and calculator. They are not legal definitions. In reality, people whose health status is good can incur significant expenditures; likewise, others whose health status is poor can have none.

• Insurance premiums. The premiums were calculated with the following math equation; administrative expense and profit margin, which typically add 10 to 20 percent to a premium, were not considered:

($Healthy + $Unhealthy) ÷ (#Healthy + #Unhealthy) = $Insurance Premium / Person

• Insurance subsidies. The premiums may not reflect what individuals pay because of subsidies. Employees often have their insurance subsidized by their employer and other tax considerations; many Obamacare participants also have their insurance subsidized.

• Medical expenditures. The $1,000 and $100,000 values were chosen for their simplicity. We could have used any combination (e.g., $500 and $25,000 or $750 and $50,000) to illustrate results. In reality, expenditures vary per individual.

• Pricing issues. Price is an ill-defined term in health care. No pun intended. If insured, the amount paid for any service depends on the provider’s carrier contract. If not, the amount depends on you and the provider, and it’s usually more than any contracted rate.

• Pre-existing condition. The definition of pre-existing condition is complex, so we defined as “unhealthy.” Historically, some people were excluded entirely from coverage given their health status; others had specific conditions excluded for a period of time.

• Plan design. Those with coverage are often subject to deductibles, co-pays and co-insurance, as well as in- versus out-of-network benefits. These items, which affect what individuals pay out-of-pocket for health care, were not considered.

• Actuarial science. Actuaries are some of our favorite people. They price health insurance for a living, and it is best left to them. The results in the video or on the calculator are for illustrative purposes; they are not actuarially sound.

The content in the “How to Talk Health Insurance at the Dinner Table” video and calculator is for informational purposes only. It is not to be used in making decisions about health insurance.

Please refer to ClareFolio’s Legal and Privacy policies for additional information.

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