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What to consider before deciding to go without health insurance

Sarah Giron wants health insurance, but she says it's just not in her budget. "It's so expensive," says the 34-year-old stay-at-home mom in Riverside County.

Her husband, an aerospace worker, gets health insurance at work at a very reasonable rate — just $25 is deducted from his paycheck every other week to cover the cost, she says. But family coverage that includes the Hemet mom and her 2-year-old daughter would cost around $700 a month, she says, and that's just too pricey.

As companies increasingly raise the rates charged for family coverage, Giron's search for a separate insurance policy for her and her child highlights the many complications that consumers face today.

A search for a policy through Covered California, the state's health insurance exchange set up under the Affordable Care Act, didn't offer much hope for her either. The family earns too much for Giron to qualify for a subsidy. And without it, "It's still $400 to $500 per month for me and my daughter," she says. "I just can't afford it."

As a result, Giron has decided to buy her daughter health insurance — which is fairly inexpensive — but to remain uninsured herself. She's says it's cheaper to incur a tax penalty that amounts to 1% of her family's income for 2014 than to buy coverage for herself. She makes this decision despite having previously been diagnosed and treated for cervical cancer at a time when she was insured and her policy paid for much of her care.

Without any subsidies under the law, many middle-income families say health insurance can be cost-prohibitive. And some people like Giron may elect to forgo coverage if they believe that prices are too high and that penalties aren't too steep.

"It's not worth it," she says. "For the plan that I would want, the price would be ridiculous. There would be no point for me to even get it."

Healthcare experts offer consumers in Giron's position some food for thought when deciding whether it's better to buy insurance coverage or risk remaining uninsured.

Consider the value of employer coverage. Although employer-sponsored health insurance can be pricey, benefits at work are offered tax free. That means you'll often get better benefits for the price.

"When comparing coverage 'outside the employer' to 'inside the employer,' you definitely want to look at the tax exclusion, particularly if you don't qualify for a subsidy in the exchange," says Linda J. Blumberg, senior fellow with the Urban Institute's Health Policy Center.

A family in the 30% marginal tax bracket whose portion of work-based health insurance costs $1,000 is actually paying just 70% of that amount, or $700. In addition, larger employers tend to provide a larger range of benefits, such as the number of doctors and hospitals to which you have access.

Explore all your options. If you don't have access to employer coverage — or don't want it — make sure that you've explored all of your options on the private market. For example, people with incomes too high to qualify for a tax subsidy, like Giron, often don't realize that they can search beyond the health plans offered by Covered California.

You'll find many more options off the exchange, says insurance agent Craig Gussin of San Diego-based Auerbach & Gussin Insurance and Financial Services Inc. "People don't know what's out there. They go to Covered California and say, 'Ah, that's all that's available to me.' There's probably more but they're just not aware of it."

Gussin says consumers should be aware of the services that he and other agents provide. "We'll walk you through every possible option," he says. "You're not paying anybody to use us, and we're going to be there to help you."

For example, Gussin found 19 health plans for Giron and her daughter, one of which costs $364 a month — less than the plans Giron says she found herself. It would give them access to medical visits with $45 co-pays and generic drugs with $19 co-pays, without having to first meet the plan's deductible of $4,000 for the family.

You can find an agent certified to sell health plans both on and off the state's insurance exchange at the website of the California Assn. of Health Underwriters: http://www.cahu.org/consumers.

Consider new benefits under the law. Many people overlook the new benefits and protections provided under the law, even with high-deductible health plans. For example, the Affordable Care Act requires that certain preventive services, such as flu shots, screenings and annual physicals, be covered without additional cost at the time of the visit. Some health plans even waive cost-sharing for common generic drugs.

In addition, Blumberg says, people often forget that even while they're spending out of their own pocket for care before their plan's deductible is reached, they're still paying less than they would going it alone.

"You get the rate the health plan negotiated [with doctors and hospitals] and you're not paying full charges," she says.

Also, the law requires plans to cap out-of-pocket spending at $6,350 a year for individuals and $12,700 for families, minimizing financial exposure in a worst-case scenario.

Consider your overall risk. If Giron faces another serious illness or has an accident that requires a lot of medical care, the financial outcome could be devastating, experts say.

"In addition to paying tax penalties, if you do get sick and are hospitalized, it's not free," says Mark Argosh, managing director at Sterling Healthworks, a website providing information and tools to help people understand the effects of healthcare reform.

A broken leg can easily rack up charges of $5,000; an appendectomy can run $16,000 between hospital and doctor bills. And those are just minor medical events.

Giron and her family "don't want to face the specter of bankruptcy when the hospital comes collecting," Argosh says about skipping insurance coverage. "If you have no resources and aren't worried about that, it's a different story. But for families with incomes and assets they want to protect, that's a pretty shortsighted strategy."

In addition, Blumberg points out that people without insurance are often refused access to services. "It's a risky endeavor," she says.

Despite being adamant that her insurance options aren't worth the money, Giron acknowledges the risk she's taking. What would she do, for example, if her cancer recurred?

"I don't even know. I just try not to think about it," she says. "I go once a year for an exam and cross my fingers."

healthcare@latimes.com

Zamosky is the author of a new book, "Healthcare, Insurance, and You: The Savvy Consumer's Guide."

Copyright © 2014, The Baltimore Sun
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