Total Cost Estimate

What is the Total Cost Estimate In Healthcare?

A healthcare total cost estimate is an estimated number that you might pay for insurance each month. The estimate is also meant to give you an idea of whether you’ll qualify for a cost-sharing subsidiary or the premium tax credit, if using the Marketplace, and this will offset your total cost estimate.

Keep in mind this is not your actual cost. That sum depends on your chosen plan. Also, this number doesn’t consider out-of-pocket expenses, such as deductibles, co-pays, or costs incurred on an 80/20 type plan. The estimate only covers the cost you pay monthly, or yearly on some calculators, for insurance.

How Is The Total Cost Estimate Determined?

Your estimate is determined by location, income, your age, family size including children, and in most states, whether or not you’re a smoker.

Total Cost Estimate Factors

  • Location
  • Household Income
  • Age and age of dependents
  • Smoker

Location plays a large role due to cost of living. If you live in a lower income area, your estimated rates will be lower than a higher income area. Also, some plans are location-based and not available outside a certain area.

Household income is a major factor due to tax credits and subsidiaries. However, this number is also an estimate as you’re guessing what you’ll make for the next year. Using your previous tax returns is a good idea. Anyone in your household who has filed a tax return counts toward household income, including children who have filed. Gifts, inheritances, and some income sources don’t count in your total cost estimate. Your estimate can also conclude that you're exempt from fines in full or part.

Your age and the age of your dependents can alter the costs of your healthcare total cost estimate. Some states will charge a premium for applicants over the age of 64, and children under 21 receive a reduced rate too.

Smokers will pay a higher premium called a tobacco surcharge; the surcharge includes all methods of tobacco use. Only California, New Jersey, New York, Rhode Island, Vermont, and Massachusetts currently made it so companies cannot charge people with the tobacco surcharge. The marketplace does not allow insurers to charge you more than 50% more, but this addition might not show in your healthcare total cost estimate.

Non-Factors For Determining Your Total Cost Estimate

  • Pre-existing medical conditions or chronic illnesses
  • Sex of applicants
  • Co-insurance costs
  • Current or past due medical bills

What To Do After Your Healthcare Total Cost Estimate

The first step is to browse available plans. Jot down confusing terms or phrasing too and be sure to research your options. This will limit surprise out-of-pocket expenses later, and it can make what appears to be an affordable option unaffordable for you. You will want to consider additional key factors on top of what your estimated cost. These additional costs will not be included in your total cost estimate.

What To Consider When Browsing Plans Based On Your Total Cost Estimate

  • Co-pay - What will the costs be?
  • Coinsurance - Will you need to purchase an additional plan?
  • Dental or Vision Coverage - Is this included or will you need an additional plan?
  • Deductible - How high is it? Is it reasonable for you? Can you afford it?
  • Out-of-Pocket Maximum - Is there a spending cap and will you likely exceed it?
  • Subsidiary or Tax Credit - Did you qualify? Is it more cost effective to choose a higher plan?
  • Doctor visits - How often will you visit the doctor?
  • Prescriptions - How often will you have scripts filled? Does the plan cover your needed medicines?

Types Of Marketplace Plans

The Marketplace has “metal plans: gold, silver, and bronze. Costs and coverage vary, but you should note that the silver plans are the only ones that qualify for a cost-sharing reduction.

  • Bronze - Low monthly cost but the high deductible.
  • Silver - Qualifies for cost-sharing, lower deductible.
  • Gold - Often extremely low or no deductible, but the higher monthly cost.

There is no right plan for everyone. Consider which plan you can afford and your actual needs. Changing plans mid-year isn’t easy, so take the time to consider all options and weigh the negatives and positives.

Where can you Find a Healthcare Total Cost Estimate?

For the most accurate Healthcare total cost estimates, you should visit the official Marketplace. However, many insurance sites and health-related sites do have estimators that will ask the same questions. Do make sure the calculator is updated for the current year because premiums and laws change.