Friday, November 3, 2017

Help Me Out Here: Picking A Health Insurance Plan

Fun fact: when I was pregnant with The Kiddo - this was in the pre-Obamacare days when pregnancy was considered a pre-existing condition-slash-disease - I was completely uninsured. Yup. We paid for nine months of prenatal care, ambulance transport, a hospital stay, a blessed epidural, and a C-section completely out of pocket.

I do not recommend this approach. 

There's a longer story here, one I will share in the future, but the point I want to make in this post is that I don't take health insurance for granted. Ever. I have great coverage now, and I'm thankful for it every single day. Everyone deserves this kind of security in their lives. (Surely we can make this happen, America.)

Given our past health insurance nightmare and our current debt reduction mission, I am super uptight when it comes to picking health insurance. Open enrollment rolls around and I obsess. This time, I've narrowed it down to two possibilities. Although I've spent the last week weighing the pros and cons of both, I can't decide:

(Note: Fortysomething has complete coverage through his work, so my insurance covers myself and The Kiddo.)

Option 1: Preferred PPO

Monthly premium: $150
Family deductible: $500
Maximum out-of-pocket: $2000
Preventative care: $0
Mental health: $0 after deductible met
Office visit co-pay: $35 after deductible met

Pros: The premium is totally reasonable (see "but" below), max OOP is low, deductible is decent, mental health costs nada (which is amazing)

Cons: BUT my paycheck is laughable to begin with. I really don't make that much, so the $150/month premium matters. The co-pays matter. The Kiddo and I are - knock on wood - pretty healthy. We don't have any ongoing prescriptions, and the amount we spend per year on medical expenses is usually far less than the $1800 we'd spend on the premium. 

Option 2: High Deductible Health Plan + HSA

Monthly premium: $52
Family deductible: $2700
Maximum out-of-pocket: $4000
Preventative care: $0
Mental health: 10% after deductible met
Office visits: 10% after deductible met

Yearly employer contribution: $1400
My (self-imposed) minimum contribution per year: $1300
Max contribution allowed: $6,900

Pros: My employer would be giving me extra money (the thought of this makes me so happy); money put into HSA is pre-tax; HSA rolls over from year to year. I could use my HSA when I go to the doctor.

Cons: What if we end up in the ER in, like, January? We won't have much money in the HSA yet, and we'd have to dig into regular savings. (I could also set up an FSA when I enroll in benefits.)

Both plans are great... I'm just being all nitpicky and Type A about this. 

What do you think? What would you choose? Or... is this kind of a wash, with both options being equally good?

4 comments:

  1. Wow, our options are very similar to yours. We went with option 2 (and probably will do so again this year) as it made more financial sense...or at least it did for us! Having just incurred a huge medical expense, we still came out spending less than we would have had we gone with option 1. $1400 from your employer makes a nice dent in your family deductible plus you are paying almost $1200 less per year in premiums. Worst case scenario (like in our case!) is you are out $4k max in out-of-pocket expenses. I can totally see how you'd be very cautious about insurance after paying for so much on your own with your kiddo. Ouch!

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    1. Really good to know that you like your plan! Thank you - that makes me feel more confident. Yes, between the $1400 from my employer and $1300 from me, that's about 2/3 of the deductible, and we could cover the rest.

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  2. I currently have an option like your second one. I have been very happy with it. Like you, my employer funds $1500 in an HRA account, and I put another $750 in HSA. The first year, I ended up spending an additional $300 out of pocket (used up all my hsa and hra fund), but that was still less than I would have paid in premiums. This year, I'm looking to end the year with about $250 left in the hra (which rolls over into the next year). The way mine works (and possibly yours, too - I feel like this is federally mandated?) is that all of the funds are available to you beginning January 1.

    I say go for it. What do you have to lose, really? it sounds like the amount you might be on the hook for your deductible, worst case scenario, is not significantly more than what you'd pay in premium difference with the other plan.

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    Replies
    1. Thank you! I finally stopped hemming and hawing; I made my choice today. HSA it is! The extra money from my employer is just too good to pass up. I also decided to open a small FSA.

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