Alamy
By Kara Brandeisky
November 4, 2015

If you were in a tragic accident, could you afford to pay your medical bills?

In this week’s Lenny, Lena Dunham’s digital newsletter, comedian Liza Dye tells the story of what it was like to be hit by a subway train — and have no insurance to cover the cost of her recovery. In February 2014, Dye was a 25-year-old, up-and-coming comedian living in New York City. While she had professional success, she had trouble making ends meet, so buying health insurance was her last priority. Then, one morning, she fainted on the subway platform. She writes in Lenny:

I had no idea how the accident happened. I still don’t. But I woke up on the tracks of the train. My left leg was pinned underneath the wheel of the first train car. Most of the skin was gone, and a lot of bone was exposed. I was taken to Bellevue Hospital — the oldest hospital in the nation and soon to be my new home for the next two and a half months of my life.

“Do you have insurance?” became a regular question that brought me to tears to answer. Every blood-transfusion request from a well-meaning doctor turned into an argument, with me screaming that I couldn’t afford it to the poor sap who was just trying to save my life. I knew my medical bills were piling up, and I knew they weren’t going to be cheap.

Dye’s bills ultimately came to $405,000. Fortunately, she was able to get some help from emergency Medicaid, but she still needed to raise more money to cover her costs.

“You might think you’re invincible too — but you’re not,” Dye writes to Lenny readers. “I’m the poster child for Obamacare because you don’t want something like this to happen to you.”

Dye’s story is an important reminder that health insurance isn’t just for visiting the doctor when you have a cold. Insurance is there to cover catastrophic costs. Even if you’re young and relatively healthy, accidents happen. And they can cost more than you can ever imagine. A $405,000 hospital stay makes Obamacare look downright cheap. Here’s what you should know about getting covered:

Obamacare put a cap on the amount of money you’ll pay out-of-pocket

No matter if you have health insurance from your employer, your parent, or the Obamacare marketplace, the Affordable Care Act made one big change to all plans: There’s now a cap on the amount of money you can ever spend out-of-pocket on in-network care, called the out-of-pocket maximum.

Before the Affordable Care Act, some health insurance plans had yearly or lifetime limits on benefit payouts, so if you racked up $405,000 in charges your insurer might only cover $200,000 of it and leave you with the rest. Those payout caps have been replaced with a cap on how much you can be required to spend. By law, individuals will only pay $6,850 out-of-pocket for in-network essential care annually, and families will only pay $13,700. Insurance must cover the rest.

This limit does not apply to out-of-network care. Some insurers may choose to set an even lower out-of-pocket maximum than is required by law, or a different out-of-pocket maximum for out-of-network care.

So if you have insurance and you stay in-network, you never have to worry about a $405,000 bill for essential care.

On average, an Obamacare plan will cost you $101 a month — but it could be even less

Yes, Obamacare plans might look expensive. The average cost last year was $364 a month, according to the Department of Health and Human Services. But that’s not what most people pay. If you make between 100% and 400% of the poverty level — $11,770 to $47,080 for individuals and $24,250 to $97,000 for a family of four — you can get a tax credit to subsidize the your insurance premium. In essence, the government pays part of your monthly bill.

Overall, 87% of Americans who bought Obamacare plans got a tax credit to reduce the cost of insurance, so they paid only $101 a month on average. The tax credit is on a sliding scale, so you’ll pay less for insurance the closer you are to the poverty line. As an example, a 25-year-old who makes $25,000 a year can expect to pay $143 per month. Use this tool from the Kaiser Family Foundation to estimate your costs. If you make between 100% and 250% of the poverty line, you qualify for additional financial help with out-of-pocket costs.

You can get a cheaper plan to cover catastrophic care

But what if you make more than 400% of the poverty line? An individual who makes $48,000 a year won’t qualify for a subsidy but might still struggle to pay $364 a month. Remember that you still have two more options to consider: bronze plans and catastrophic plans.

Most Obamacare enrollees have “silver” plans, which are expected to cover 70% of the average person’s health care costs. But you can save on monthly premiums if you choose a “bronze” plan, which is expected to cover only 60% of the average person’s health care costs. In 2015, bronze plans cost $207 a month, on average, before tax credits. You’ll pay less every month and you’ll pay more out-of-pocket if you get sick, but you’ll still be protected from a $405,000 bill. If you’re eligible, you can apply a tax credit to reduce your costs.

Americans under age 30 or who qualify for a hardship exemption (more on that here) are also eligible for a catastrophic plan. These plans have lower monthly premiums, but you’ll have to pay $6,850 out-of-pocket (yikes!) before you hit your deductible and insurance begins covering your bills. This plan is meant to protect against true catastrophes, of the $405,000 magnitude, so you’ll need to spend your own money for more routine care. You cannot apply a tax credit to reduce the cost of a catastrophic plan.

Or you might qualify for Medicaid

But what if you’re totally broke? The Affordable Care Act expanded Medicaid, a government-run health insurance program, to cover everyone who earns less than 133% of the poverty line—$15,654 for individuals and $32,253 for a family of four. However, Medicaid is state-run, and in 2012 the Supreme Court ruled that Congress could not force states to expand Medicaid.

As a result, if you live in these 30 states or D.C., you can get health coverage from Medicaid. If you live somewhere else and you don’t meet your individual state’s income, age or disability requirements for Medicaid, you might not qualify.

Students can get Medicaid. You can sign up anytime, and once you do Medicaid coverage can apply retroactively for the previous three months, if you were eligible then.

If you’re uninsured, now is the time to get covered! … Right now!

Open enrollment for Obamacare plans started on Nov. 1. This is the only time of year when you can buy a health insurance plan to cover you for the next year. You’ll need to buy a plan by Dec. 15 if you want coverage by Jan. 1, 2016. If you procrastinate, you have until Jan. 31, 2015 to avoid a sizable penalty on next year’s taxes, but then your plan won’t start until March 1, 2016. So why wait?

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