Know the coverage you need

WASHINGTON - When it comes to the Affordable Care Act, one word keeps being bandied about - affordable.

White House officials were elated last week about a report from the Department of Health and Human Services finding that premiums in the new health-care marketplaces are priced lower than expected.

The average premium nationally for a mid-tier plan, meaning one with the second-lowest cost, will be $328 a month before tax credits, 16 percent below projections by the Congressional Budget Office. The administration keeps emphasizing that many people will qualify for a subsidy that will bring that price down. Around six of 10 uninsured consumers will be able to get coverage for $100 or less per month when taking into account premium tax credits and Medicaid coverage. However, for others, especially those who don't qualify for a tax break, a policy could cost hundreds more per month.

So how will consumers shopping for health insurance determine what's affordable?

When I asked a 29-year-old California man recently, he paused and said, "I think $150 or more a month would be out of my reach."

I asked him how he came up with this figure.

"It's just something at the moment I feel I can afford," said Josh Nece, an uninsured restaurant server in Oakland. "Already I have so many things I have to pay a month just to survive."

I then asked Nece how much he spends on his cellphone, cable or Internet service.

He knew right away where I was leading him. He doesn't have cable. His cellphone and Internet cost about $100.

"I see," he said. "Health insurance is something I need to survive. I guess I can't afford to play the game that you hope nothing happens."

I put the same question to an uninsured 19-year-old woman leaving a speech by President Obama in which he urged the largely young crowd to sign up for health insurance when the marketplaces open today.

"I can afford $50 a month," said Danielle Vest, a student at Prince George's Community College in Maryland. Vest lives at home and works two jobs.

Obama told the students that, on average, a 25-year-old in Maryland making $25,000 a year might pay about $80 a month for health coverage in the exchanges.

Would Vest pay that much?

"My mom says I better do it now," she said. "So yes, I would pay that much. I guess."

That's the challenge the administration and others encouraging people, especially young adults, to buy insurance are going to have. Affordability is such a fluid term when it comes to someone's budget. Will people put an arbitrary limit on how much they are willing to spend? I suspect that a lot of people will, particularly those who don't have ongoing health issues.

Many Americans will be able to get insurance "for the cost of your cable bill, probably less than your cellphone bill," Obama told the crowd.

When you shop in the marketplace, you will find four categories of plans - platinum, gold, silver and bronze.

Regardless of the level, all the plans will offer the same essential benefits. But you decide your premium level based on how much you want to pay out-of-pocket for health-care services. If you opt to get a plan with a lower monthly premium, you'll have higher personal costs. If you elect to pay a higher premium, you'll pay less up front.

There is a fifth option, a "catastrophic" plan, but it's available only to people under 30 or those who would be exempt from the requirement to purchase coverage because the premium exceeds 8 percent of their income, the Kaiser Family Foundation points out. Catastrophic policies usually have lower premiums than a comprehensive plan, but you get covered only if you need a lot of care.

Here's my advice. Don't be penny-wise and pound-foolish. If you know that you don't save well, don't get a plan with a high deductible. All three of my children have asthma. If I were shopping in the marketplace, I would go for gold or platinum. If the costs of those premiums are too high, opt for the second-lowest-priced plan.

I know that your family budget may be tight - but what good is it to get a policy that you can't use because you don't have the money for co-pays or high deductibles?

We are a bargain-loving nation. So, what's reasonable to government officials may not be viewed as affordable to folks who are healthy. But with the high cost of getting sick, many people will have to push their financial comfort zone. This isn't a cellphone or cable subscription. Don't bargain if you don't have to with your health and your financial future.