Is my health insurance a rip-off?

May 20, 2009 9:10 AM

Is my health insurance a rip-off?

I have health insurance through my job at the state university I work at. The premium for myself and my wife is around $130 a month. The kicker is that most things aren't covered until we've paid (ourselves) $1500 in medical expenses.

While there is a decent drug plan, does this seem worth the money to you? Does anyone else have similar insurance? Thanks.

posted by elder18 to health & fitness (35 comments total)

It certainly doesn't seem like the most fair plan out there, but consider the alternative of not having any insurance in case one of you needs covered treatment that costs tens of thousands of dollars.
posted by Burhanistan at 9:14 AM on May 20

About a year ago, thanks to complications with pneumonia, I had to spend one night in the hospital. One night. The bill was over $8500. So, if you ever get majorly sick, $1500 is going to seem like nothing, compared to the final bill.
posted by Ms. Saint at 9:14 AM on May 20

Having a maximum out of pocket is normal. You say "most things aren't covered" and I'm not sure what that means...but with my insurance, we pay a lot more a month than you do for the two of us (through our job), and we have to pay a healthy percentage of our medical expenses until we reach our "out of pocket maximum" (which is $2k a year), and then they cover things at 100%.

It all depends on if you have an HMO or a PPO. When my wife worked at AT&T we had an HMO and the nice thing about it was everything had a fixed cost. See the doctor, $20. ER visit, $100, no matter what. Now we changed jobs, we have a PPO, and while doctor's visits are still a flat $20, we now have to pay a copay out of pocket for everything, every lab workup the doctor does, every expense. Until we reach that out of pocket maximum.

So yeah, it sounds like you have average, every day, run of the mill, health insurance. And while it may seem like a rip-off, have one major surgery or illness and you'll find yourself very much in the black. (Even with insurance, the co-payment amounts when my mother-in-law had cancer was in the MILLIONS of dollars, and my father-in-law had to declare bankruptcy to get out of it)
posted by arniec at 9:15 AM on May 20

The kicker is that most things aren't covered until we've paid (ourselves) $1500 in medical expenses.

What does that mean? You have a $1500 deductible? That's quite large, especially given the moderately sized premium you are paying. Or it means you have a $1500 out of pocket maximum?

In any case, what's the alternative? Can you choose a different plan or is it going without insurance? I would suggest that the latter is not a good idea.
posted by grouse at 9:18 AM on May 20

I would need a bit more info...that $1500 could be a deductible, and then after that are you covered at 100%? 80%?

Is that $1500 you pay out of pcket per condition or per admission? I have seen plans like that too.

Or is the $1500 an out of pocket max? Usually there is also a deducitble to meet, which may or may not apply to the out of pocket max.

Whether or not those $1500 are normal or not depends on how your insurances uses them (deductible vs copay vs out of pocket maximum)
posted by DrGirlfriend at 9:22 AM on May 20

The deductible is $1500. You can choose other plans that have lower monthly premiums but higher deductibles. Mine has the second lowest deductible there is. This is a PPO, so I don't think there are fixed costs for anything.

For instance, I took a physical which would have cost $220 if it hadn't been free for other reasons.
posted by elder18 at 9:24 AM on May 20

This is pretty standard, actually. Most employer-sponsored plans look something like this, price wise. That's actually a lot lower deductible than I'd be able to get for that premium.

This isn't a rip-off, it's just expensive. As several previous posters have indicated, a single major health bill will exceed your $1500 deductible/maximum by a significant amount, possibly even an order of magnitude. Many outpatient surgeries run between $5000 and $10,000. Two nights in a hospital? That'd be an easy $15,000, even absent any serious procedures.

Thus health insurance is really something you can't afford not to have, regardless of how big of a pain it is on a monthly basis. Just ask any of the people who don't have it.
posted by valkyryn at 9:25 AM on May 20

It sounds like the sort of health insurance policy we have - and it does suck. (It's also through a university, for what it's worth)

arniec > if elder's plan is like mine, which it sounds like, there are no co-pays. Whereas a normal, sane insurance policy might charge, say, $20 for a general practitioner visit and $50 or something for a speciaist, with my plan, you pay the whole shot. Example - a recent trip to my general practitioner and four subsequent visits to a physical therapist set me back almost $400 out of pocket.

It's gotten to the point where if I think about going to the GP, I think "is it worth the $80 I'll spend for the office visit?" and I'll say no and slog along in whatever pain/hacking cough/whatever I'm in.

But the alternative, of course, is not having it when you need it, so we basically suck it up.
posted by Lucinda at 9:26 AM on May 20

To be perfectly clear, the insurance plan pays only preventive health and drug benefits until you pay the first $1500 out of your own pocket? I also think it is expensive but what can you do about it?
posted by grouse at 9:30 AM on May 20

FWIW, mine covers just me, I pay $140 a month, and have a $1000 deductible.
posted by Comrade_robot at 9:31 AM on May 20

Our monthly premium is double what yours is with a $1500 deductible - I work for a small company and our rates would be better if we had more people in our plan to cover. The HR person in our company is also a nurse that sits on the state insurance boards, so we have gotten the best plan possible for our company.

That said, my husband and I both maxed out our $1500 combined deductible in the first week of January last year (what a fun week that was!). After that, everything was covered, except for our drugs co-pay. And while that $1500 seems to be alot, we had great care, had no waiting or referrals, so we feel it's worth every penny.
posted by inquisitrix at 9:34 AM on May 20

Is the $1500 really a $750 individual deductible, or is that the family deductible?
posted by smackfu at 9:34 AM on May 20

Adding to Ms.Saint's anecdote - early in our marriage, my husband and I declined similar coverage because we were young and healthy and felt like we'd never even reach the deductible in a year. Until a gall bladder attack landed me in the hospital for three nights. We've only very recently finished paying for that little trip. Just as an example, a doctor who never even saw me physically - only looked at and interpreted an image from a test online - billed me $350.

I'd say it's worth it.
posted by ferociouskitty at 9:40 AM on May 20

And just in case you're thinking of canceling your health insurance to save yourself that $1,560 per year, read this:

http://aaron-allston.livejournal.com/

It's the story of an author who I'm a fan of, who went without health insurance. His avoiding seeing doctors about his medical issues (diabetes) has led to him being declared unable to drive due to poor eyesight, and then he had a heart attack and nearly died. All preventable had he taken care of his medical issues with some prevention, but he clearly states in the account above he skipped it due to having no insurance.

Now he has had a lengthy hospital stay, heart surgery, his eyesight will never recover, and all due to not being able to get insurance.

PLUS, let me add this: once you're insured you're able to stick with it. But if you find out later you have a problem (diabetes, cancer, whatever) then it becomes a preexisting condition and you may not be able to get insurance from the vast majority of places.

Honestly, for only one thousand five hundred dollars annually (for the insurance, not the copay), like others have said, you can't be without it.
posted by arniec at 10:00 AM on May 20

You haven't given us enough information... but a 1.5k deductable, per person, is not out of line these days...

We need to know the co-pay amounts, what's covered, what isn't..

You'll not get any useful information from us here...

You could also contact an independent insurance agent and get some quotes...

I'll be next week's pay that, after you do that, you'll be writing a thank you letter to your employer...
posted by HuronBob at 10:05 AM on May 20

Only $130 per month and it includes prescription coverage? Even with a $1500 deductible, that's something of a bargain compared to the plans I've been on. My previous Blue Cross plan was just over $700/month for my husband and I, with a $500 deductible. It only covered 50% of each prescription cost, and we had a $30 co-pay for office visits. The thing is, we only go to the doctor twice a year, and we get over $800 (before insurance pays their half) of prescriptions each month. If either you or your wife needs a CAT scan or MRI, you'll run through that deductible in no time (and usually you can pay the hospital in installments).
posted by Oriole Adams at 10:07 AM on May 20

How much does the insurance cover after your reach your deductible? $65 a month per person sounds very reasonable if the coverage after you reach your deductible is good.

A year's worth of insurance for you alone works out to $780. Does your deductible cover both of you or are your deductibles separate? Let's say that you each have to meet the $1,500 deductible. In this scenario, you outlay $2,280 before you really get benefits.

In my opinion, it's still worth it because just one medical emergency will end up costing more than $2,280. On the other hand, you could take a calculated risk and put $2,280 a year in a savings account and create your own emegency fund. I would definitely keep the insurance, but I don't tolerate risk well.

Just a thought though - If you decide to have a baby, the hospital bills/doctor's visits will end up costing many thousands of dollars.
posted by parakeetdog at 10:13 AM on May 20

Let's put this into perspective, assuming your insurance is run of the mill.

If nothing happens, you will pay $1560 anyway.

If minor things happen, you will pay up to $3060 in total.

If your wife has a baby, it will cost you $3060*.

If the baby is premature and has to spend a month in the hospital, you'd still only pay the first $3060*.

If you wreck your car and spend a few days in ER and intensive care, it will cost you $3060*.

If your wife is in the same car with your and is also fucked up, you will pay the same $3060*.

If you or your wife get cancer and require vastly expensive treatment, it will cost you $3060*.

If all of those things happen in the same miserably shitty year, you pay a total of $3060*.

So I'll hold "rip-off" in my hand, right here. Where, you might wonder, is your health insurance plan? Is it in my other hand? Is it across the room? Is it in the town next door? No, it's way out past the local group of galaxies. If you're thinking of canceling your insurance, you would be Grade-A moron imbelice lackwits of the worst kind if you did that.

If you would like to take more "risk" with your health insurance, just select one of the plans with lower payments and a higher deductible, so long as you can still pay the max deductible if the shit hits the fan.

*Plus copays and bits and bobs that aren't covered, which can add up.
posted by ROU_Xenophobe at 10:21 AM on May 20 [1 favorite has favorites]

A $1500 deductible is on the high side, but at $130 a month I don't think it qualifies as a ripoff if you compare it to an individual policy. I still don't think it's ideal for a group policy but if you are thinking of maybe striking out on your own and getting your own insurance policy, you will not find that deductible for $130 a month for 2 people.

As already mentioned above, it is certainly worth holding on to, if you don't have a better alternative.
posted by DrGirlfriend at 10:30 AM on May 20

The medical expenses of both of us, in total, have to reach $1500 before the coverage kicks in, not $1500 per person. As I mentioned before, there are no co-pays except for prescriptions.

I can't detail the amount of coverage after the deductible is paid up without taking up a lot of space, but it looks pretty reasonable.

My intent with this question was to see if other people had plans similar to mine, and it seems mine is pretty decent in comparison. Thank you all for your help so far.
posted by elder18 at 10:30 AM on May 20

Ours is the same. We maxed out the deductible with a minor, but persistent, skin infection. We're still paying it off a year later (we can barely get by on a few hundred bucks of rent as it is) but we quick got in our long-term health issues to the doctor before the end of the year. My chronic UTI issues are nearly solved and he got an optional surgery that he's been wanting to get.
posted by theraflu at 10:31 AM on May 20

My wife and I pay $330 a month for our policy. The deductible is $100 per person and there's a $500 per person max co-pay too. (The shocking thing is the school district she works for is picking up the other $850 a month in premiums.) The policy covers almost every doctor and dentist in town.

When picking health plans, I almost selected the cheaper premium ($90 a month) with $2000 deductible and $2000 max co-pay per person. I'm so glad I didn't - her pregnancy this February had major complications and our total hospital cost was in excess of $40,000. Our out of pocket so far this year? $600 for her and another $300 for the baby.

So in sum - you're getting a screaming good deal.
posted by Happydaz at 10:42 AM on May 20

That's not terrible for employer provided insurance. At various times I've paid more or less than what you're paying, but I'd say that's on the low side of average.
posted by electroboy at 10:46 AM on May 20

That doesn't sound too bad. Then again, my university covers me for free (it doesn't even come out of my paycheck) with a $100 deductible, $2,000/yr max out of pocket, 10% co-pay with no charge for prescriptions or regular clinic visits (only pay for specialists). I don't think I will ever be able to find insurance like this when I graduate :(
posted by bengarland at 10:51 AM on May 20

I have a similar plan - 1500 deductible for individual 3k for family. I pay for everything out of pocket up to that - then it's 10%. That on top of $260/month out of my paycheck.

As we speak there is a major battle raging in Congress healthcare and the HMOs, pharmaceutical companies etc are leaning hard and spending big to defeat Obama's healthcare bill. Someone asked upthread "what can you do" well, get involved. Start calling your representatives to let them know that they will be voted out of office if they side with the insurers on this one. This is your time to make a difference and the only way to do that is to put the fear of God into your representative's pants - which are being loaded up with big pharma cash as we speak.
posted by any major dude at 10:54 AM on May 20

Sounds like you have a fairly normal policy. A $1,500 joint deductible sounds quite nice, actually. Our individual deductibles are almost twice that, and we pay close to $800/mo for the privilege. With no dental.

I'm assuming this is the first time you've had your own health coverage, right? Congratulations! You have coverage that falls squarely into the "Do whatever it takes to keep the job that provides this kind of coverage!" category.
posted by Thorzdad at 11:01 AM on May 20

I'm self-employed and my Blue Shield plan now costs $230/mo with a $1700/yr deductible.

In-network fees to me are about 30% of the bill, and I've been billed for $5000 already for four separate incidents (with total out-of-pocket around $800) so in one year it has paid for itself.
posted by toroi at 11:25 AM on May 20

You should be able to look up the plans offered to the public by the state of MA at the health connector.
posted by reddot at 11:34 AM on May 20

I would kill for your policy. My husband and I pay $655/month for the both of us (I forget who costs what, but I'm the more expensive one), and we have a $3,500 deductible. EACH.
posted by HotToddy at 11:35 AM on May 20

We're insured with a pretty good plan through my wife's work. For the first 32 years of our marriage we had only the most minimal medical expenses, if you don't count the completely normal births of our two kids.

2008 was different in a big way, and I can tell you that we'd have been financially crippled for years had we not had that health insurance. Even with it, we spent more out of pocket in co-pays, etc. than we have in all our years together combined.
posted by imjustsaying at 11:36 AM on May 20

If you don't want your plan, I'll take it! I'm 48 and self-employed. I pay $223/month in premiums and have a $5,000 deductible. There's only one other brand of insurance I can get as a self-employed person in my state, and it's just as bad.
posted by PatoPata at 12:59 PM on May 20

You're well below the average costs for a family policy, actually. Nationally, the cost of a family plan was about $1,050 per month for people who get insurance through their employer; on average, workers pay about $280 per month for family policies (with employers picking up the rest of the tab). (cite)

So, you're paying less than half the national average among people in your position. Your deductible is high, but it sounds like you've made the choice to buy down your premiums by taking on a higher deductible (you could pick a lower deductible for a higher premium, right?), so I'd consider yourself *extremely lucky* in terms of health insurance.
posted by iminurmefi at 1:46 PM on May 20

My confusion stems from the fact that I had very good insurance as a cashier at a grocery store and, while this coverage is apparently good as well, I'm paying much more than I'm used to.

Thus, I wanted to do my due diligence to see how my plan compared with others. Again, thanks for the help.
posted by elder18 at 1:59 PM on May 20

From what you have said, your plan sounds like a pretty good deal to me. I'd love to be able to get that plan for $65/month/person.

A few things that might make it less good: Is there a cap on the amount they will cover? $25,000 sounds like more money than you will ever need for health care, but bills will get to that level very quickly. Likewise, if the plan only pays 80% of costs over the deductible you might find that you owe a lot of money should something happen.

One way to get more out of your health insurance is to try and schedule yearly appointments on an 11 month/13 month cycle, such that most of your recurring "yearly" expenses happen every two years.
posted by yohko at 4:39 PM on May 20

If you have changed states, prices may be higher in your new state.

It's also possible that your old insurance had a cap on coverage that's much lower than your new insurance. It might not have been as good as you think. Or perhaps your employer was simply more generous about picking up part of the tab.
posted by yohko at 4:42 PM on May 20