Which health insurance plan makes the most sense for me?
October 28, 2013 9:01 AM   Subscribe

For the first time, I have a choice of health insurance plans at a new job. I sort of understand the differences and benefits of each, but am feeling some serious choice paralysis.

I started a new job about a month ago, and I have to choose a health insurance plan by tomorrow or I'm automatically enrolled in the high-deductible plan. I have two other options (well, three if you count waiving coverage, which I am not doing), and I'm not sure which one makes the most sense for me.

First, me: 28, male, single, healthy (I get the occasional cold and spring allergies). I wear contacts/glasses, I only really go to my primary physician if I don't feel well, I go to my ophthalmologist more often (my eye pressure runs a little high, so it's something he prefers to monitor), and I haven't been to the dentist in a while.

I can choose from three options.

1: High-deductible
Premium: $60 a month (for a single person)
Deductible: $2,500 a year
Out-of-pocket maximum: $5,000 a year
In-network coinsurance: 90%; I pay 10% of total charges
Out-of-network coinsurance: 70%; I pay 30% of total charges
Prescriptions: full cost until medical deductible is met; then 10%, with the plan paying 90% until out-of-pocket maximum is met; then plan pays 100%

2: "Core Plan"
Premium: $156 a month (for a single person)
Deductible: $1,000 a year
Out-of-pocket maximum: $3,000 a year in-network; $4,000 a year out-of-network
In-network coinsurance: 90%; I pay 10% of total charges
Out-of-network coinsurance: 70%; I pay 30% of total charges
Prescriptions: 10% of cost ($10 minimum/$60 maximum) for generics; 25% of cost ($10/$80 minimum/maximum) for "retail brand name preferred" prescriptions; 35% of cost ($10/$100 minimum/maximum) for "retail brand name non-preferred" prescriptions

3: "Traditional Plan"
Premium: $266 a month (for a single person)
Deductible: $500 a year
Out-of-pocket maximum: $2,000 a year in-network; $3,000 a year out-of-network
In-network coinsurance: 90%; I pay 10% of total charges
Out-of-network coinsurance: 70%; I pay 30% of total charges
Prescriptions: 10% of cost ($10 minimum/$60 maximum) for generics; 25% of cost ($10/$80 minimum/maximum) for "retail brand name preferred" prescriptions; 35% of cost ($10/$100 minimum/maximum) for "retail brand name non-preferred" prescriptions

In addition to this, I have the option to contribute to an FSA, the company kicks in $200 a year to an HRA (this got matched in 2013, and anything additional rolls over year-to-year), and if I'm on the high-deductible plan I can contribute up to $3,250 a year to an HSA.

My gut says the high-deductible plan is great if I know I'm not going to get sick, but it's a big risk to take if something even moderately serious should happen. I'm leaning towards the core plan, but I'm wondering if anyone has any additional insights before I lock myself in for a year.
posted by andrewcilento to Health & Fitness (21 answers total)
 
It all depends on what deductible level you are comfortable with. If you have the savings to cover a $2500 deductible/$5000 OOP max, I think a plan like that could be a great choice for a healthy young man. If you don't, the core or traditional plan are probably better choices. Given that you see a specialist semi-regularly for a chronic issue, I probably would not choose the high-deductible plan, unless you really feel comfortable with the amount of $ you have socked away in case of a catastrophic illness/injury. Do all plans allow you to see a specialist without a referral? That's always something I look for.
posted by ThePinkSuperhero at 9:11 AM on October 28, 2013


I always get the same kind of paralysis, and the core plan is what I'd lean towards as well. It's kind of like a "happy medium" kind of thing.
posted by EmpressCallipygos at 9:12 AM on October 28, 2013


I wouldn't do the high-deductible plan, even under your circumstances, because of the prescription costs. One chronic condition that needs medication, or even one major illness, can blow your MIND with the med costs. I had pneumonia two and a half years ago and I needed Levaquin, and it was $240 for five pills. If your eye pressure situation goes from "monitor" to "medicate," you can be looking at $100-$300 in medications a month, easy.
posted by KathrynT at 9:15 AM on October 28, 2013


My gut says the high-deductible plan is great if I know I'm not going to get sick, but it's a big risk to take if something even moderately serious should happen.

Yeah, I tried going the high-deductible route one year, and sure enough, that was the year I ended up in the emergency room with something weird.

I'd probably be inclined to go with the core plan if you're basically healthy and don't expect to hit the deductible. If you have health concerns, do you think the amount you'd save with the lower-deductible plan is greater than the $1,320 in additional premiums?

Actually, the low-deductible plan is going to charge you $1,320 extra to potentially save $1,500 ($500 less deductible, $1000 lower out of pocket max) on medical bills. So even if you have an appendix attack (or whatever) and hit all your deductibles, it's really only going to save you $180. And if you don't get sick, it's definitely costing you an extra $1,320.
posted by Blue Jello Elf at 9:15 AM on October 28, 2013 [3 favorites]


Young and healthy I'd go for high deductible with the matching HRA option. What does "this got matched" mean? Do you mean they match up to $3250? or is it only $200?

Anyway, I'd go with the high deductible, max the HRA as it rolls over (not going to the dentist may add up eventually, I have office mates who are spending $25k on dental this year).

That puts you out $330 per pay check - $60 to the plan, $270 to the HRA. You can use the HRA for the payments to your eye doctor (we do more than "yearly" visits, too, due to specific vision issue).

Not sure what happens when you move off of the high deductible/HRA plan.

Before you do this, I'd ensure all your docs take that plan. Mine take the EPO and PPO version of our plan, but not our HD/HRA version.

If you go with "Core Plan" - the PPO I shifted to this year, I'd put in $200 a month or so in some kind of savings plan. Do the math first, figure out what your minimum costs oop will be and put that in an FSA, the rest in savings. For example, say you know you'll spend at least $300 a year in core-med co-pays (I have an allergy med and other med that's "always" I budget in), and throw in what you expect to pay to see your doc and your eye guy, then put that in FSA - and put a little aside non FSA for 'other'. Then you have the more money for unexpected medical expenses, without the danger of losing it from the use it or lose it of FSA.
posted by tilde at 9:16 AM on October 28, 2013


None of these are terrible plans, if that helps. Your worst plan is actually somewhat better than my best option.

Questions:

1) What is the co-pay for an office visit on each plan? I have to choose between a plan where I have a co-pay for doctor's visits and one where I pay 100% of the cost of doctors visits up to the deductible. Given that I am in an area with very expensive doctor's visit costs and doctor's visits are usually most of my spending on health care, this is a major factor for me.

2) Do you have money saved to pay the deductible (for any of these plans)?
posted by pie ninja at 9:20 AM on October 28, 2013


By the way, is there a website? My company had a slider that let me put in my estimated costs.

I couldn't do HD/HSA - my choices were HD/PPO, MedDed/PPO, or EPO. My costs on all three for basic things were pretty similar, but the EPO was super expensive every month for the coverage, plus I still had out of pocket costs. The two PPO options (HD and Med Ded) were about the same but the monthly costs on one was lower and the other higher - but after adding in out of pocket they were nearly the same.

I went with the medium deductible and an FSA - even if a few dollars isn't saved that way - because in a major medical issue it would save me in the long run. It was neat visualizing it like that.

Some time with Excel and charts could probably let you put the same sort of thing together.
posted by tilde at 9:20 AM on October 28, 2013


Does your employer or insurer offer some kind of cost estimator that takes tax savings from the HRA into account? You may find that the high-deductible plan will end up saving you a bunch even if you have to max out your deductible. Your HD plan's prescription part is a bit troubling, however, and if you aren't comfortable with the deductible and out-of-pocket, then HD probably isn't for you. But it's pretty eye-opening to run the numbers, and you shouldn't make any decision without doing so.
posted by sageleaf at 9:21 AM on October 28, 2013


tilde: "Young and healthy I'd go for high deductible with the matching HRA option. What does "this got matched" mean? Do you mean they match up to $3250? or is it only $200?"

Sorry, should have been more clear on this--I'm given $200 a year, provided by the company, for the HRA. The "union" that represents people in my position in this company (this is a new job, and I have some restrictions on what I can and can't say about myself online. If you're curious, MefiMail me and I'll clarify) matched the $200 this year, so essentially I'd have $400 this year. Not sure how that shakes out going forward, but I get at least the $200 each year.
posted by andrewcilento at 9:36 AM on October 28, 2013


Well, if you think you'll be relatively healthy, But you can afford the pricier plan, I would do the HD plan, and put $200 a month into a savings account (or your HSA or whatever) until you have the amount of the deductible covered. Also, double check, but on most plans now your routine maintenance is covered at 100% - your yearly physical and related bloodwork - so consider that when you're estimating costs.
posted by dpx.mfx at 9:36 AM on October 28, 2013


I'm the admin for the insurance plans at my company. We have 3 plans because there's some (old) heath insurance law that stipulates the types of plans you can offer employees.

For ours, we have an HMO plan, a high deductible PPO plan that couples with an HSA, and a 0 deductible PPO plan. Whatever you choose, if your plans have those distinctions, make sure that your preferred PCP is in your covered network.

Keep in mind that with the ACA rolling into action in the next few months, a lot of benefit plans will be changing. Ask your employer if they will still be offering the same plans with the same cost/fee structures come January 1, 2014.
posted by phunniemee at 9:37 AM on October 28, 2013 [1 favorite]


At my current (soon to be Ex-Job) the HSA was WAY less expensive than the traditional plan. I did the math and concluded that based on my past usage if I saved X in the HSA account, I'd be covered. Then I had $18,000 worth of surgery. I really needed to save X+X+X.

Oh well.

In my new job, I'm picking the "core" plan with FSA.
posted by Ruthless Bunny at 10:17 AM on October 28, 2013 [1 favorite]


I would go with the middle one, it's not too pricey but it has good coverage, and the out-of-pocket max is not terrible.

Have you looked to see which of your current doctors are in-network?

One thing I'd double-check is what your copay for is for doctor's visits and how may that gets you? One reason I bumped up to my company's mid-level plan is the regular plan only gives you 3 visits at the $25 copay price (plus one annual checkup free), and then you have to pay a lot more. You can eat through those visits pretty quickly with follow-ups and such.

The other thing that is fussy about the high-deductible plan is that it doesn't look like they cover non-formulary (non-preferred) drugs at all. If you need a non-formulary drug they can be ridiculously expensive.

You mentioned dental and vision - is your company offering that? That's not typically included in medical plans, although often a medical plan will give you one eye exam per year or two years.

I had an FSA at my last job and it was nice because my prescriptions added up and it was nice to save a little on them.
posted by radioamy at 10:21 AM on October 28, 2013


radioamy: "I would go with the middle one, it's not too pricey but it has good coverage, and the out-of-pocket max is not terrible.

Have you looked to see which of your current doctors are in-network?


My primary care physician & my ophthalmologist are in-network, which is what the bulk of my usage is going to bet.

One thing I'd double-check is what your copay for is for doctor's visits and how may that gets you? One reason I bumped up to my company's mid-level plan is the regular plan only gives you 3 visits at the $25 copay price (plus one annual checkup free), and then you have to pay a lot more. You can eat through those visits pretty quickly with follow-ups and such.

You mentioned dental and vision - is your company offering that? That's not typically included in medical plans, although often a medical plan will give you one eye exam per year or two years."

I do not see anything about a co-pay for doctor's visits, and there is no dental, but that would come out of the HRA or FSA if I decide to kick in for that.

Leaning very heavily towards the Core plan. Gonna sleep on it, but I think it makes the most sense for me.
posted by andrewcilento at 10:33 AM on October 28, 2013 [1 favorite]


If you do core plan, do it with FSA and peel off some after taxes as a disaster fund, same as you would HSA and the HD plan.
posted by tilde at 11:15 AM on October 28, 2013


Make sure you keep in mind that FSA funds have to be expended that year or you lose them, unlike an HSA which rolls over year to year.
posted by rabbitrabbit at 11:26 AM on October 28, 2013 [1 favorite]


Not to rain on your parade, but you are healthy until your appendix fires up, or you trip and break a leg. Be safe and well covered whatever plan you choose. With the high deductible, can you set aside this amount, preferably at interest, and still be able to access it quickly?
posted by Cranberry at 12:12 PM on October 28, 2013


Don't think of your premium as the amount you pay each month, think of it as premium + 1/12 of the deductible, then base your decision on that. Put away 1/12th of you deductible per month, and if (after a year) you haven't spent it, bank it, and consider it as a massive drop in your premiums.
posted by blue_beetle at 1:00 PM on October 28, 2013 [1 favorite]


People keep saying the HDDP only wins if you luck out on next year's expenses, but that's not necessarily true: run through a worst-case example where you spend up to the out-of-pocket maximum to check.

Don't forget to take into account the fact that HSA contributions are pre-tax. So you need to add together your marginal tax rate from your federal (and state and local as appropriate) tax brackets and multiply that by the amount you expect to spend out of that account. (So if you contribute $1000 to your HSA next year for $1000 of medical expenses, if you're in the 25% federal tax bracket and pay 4% to your state, then your taxes should be $290 less than they would have been otherwise assuming you wouldn't have been able to deduct them already somehow.) Alternatively I believe you can use an HSA as another retirement account if you're saving a lot (the annual contribution limit is around $3000 for an individual).

So the decision depends on how much your tax bracket and how much you're saving as well. Isn't this fun?

(But I'm still trying to sort this out myself, so please confirm any of this with your own research....)
posted by bfields at 1:46 PM on October 28, 2013


Since you mention going to the dentist and ophthalmologist it is probably important to realize that none of the plans you describe say anything about dental or vision coverage. Sometimes medical insurance covers one eye exam per year but that would be about it. You can use FSA funds to cover trips to both of those places but really you should be looking at your options, if any, for dental and vision insurance.

That said, I'd go with the Core plan but that is because I don't like HDHPs, I don't like having to pay out of pocket for everything until my deductible.
posted by magnetsphere at 5:56 PM on October 28, 2013


Really appreciate everyone's input. I elected to go with the Core plan, and am planning on putting the deductible into an ING savings account (I can't bring myself to call them Capital One 360 yet, even though the changeover happened a while ago) and leaving it. If it makes sense this time next year, great; if not, I can always reevaluate.
posted by andrewcilento at 10:18 AM on October 29, 2013


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