How do I figure out what health insurance to buy for next year?

November 12, 2021 5:34 PM

How do I figure out what health insurance to buy for next year when I think I’ll need surgery (U.S.)? Does it make sense to get my surgery done in December, when I haven't met my deductible yet, or wait until 2022 with a new plan?

I have been recommended to undergo a (hopefully) outpatient laparoscopic surgery. I’m putting aside the scariness of undergoing surgery for now and thinking about health insurance because I need to choose a plan for 2022 in November. I’m in the US, and that means planning this out in advance financially. I assume that with surgery I will have to pay a lot of money no matter what, so want to be strategic if one plan option means I’m playing less overall, or if it means I can get care for other things the rest of the year that I don’t usually bother to pony up for (e.g., mole check at a derm). I should note that health insurance is a huge stressor for me, as someone who has been self employed for decades and has had to go without insurance for many years before the ACA was enacted because nobody would sell it to me. I’m still self employed but I am now allowed to pay a lot of money for insurance (I make many times over the threshold for assistance/subsidies in the marketplace so all plans are “full price.”) My partner is also self employed so I have limited insurance options. 

Can you help me figure out the best scenario of monthly premium/deductible/coinsurance for me? Or at least tell me what I should be weighing more heavily. In the past I usually went lowest premium/highest deductible that my doctors accepted because I took on the risk if I did have something expensive happen to me. I think mathematically it probably makes sense to pay more monthly for the lowest annual out of pocket max overall. However, on healthcare.gov there are ONLY 5 PPO plans available to me (all BCBS), and one more on their direct site. If I know that I am going to meet my deductible and out of pocket maximum early in the year with surgery, what is the best plan to choose? Assume that I can afford to pay big chunks of money at a time from savings, even though it mentally hurts. I’ve never had a HSA before because I don’t want to deal with more bank account/cards/systems and it just seemed like more trouble that it’s worth. I pay out of pocket for the dentist.

The lowest individual deductable is $2,350, highest $7,000. The lowest annual out of pocket maximum is $7,000, highest $8,700. In what ways can I end up paying more than my annual out of pocket max? PCP/Specialists fees range from $15 copay to 50% coinsurance after deductible (most plans are 40-50% copay). Outpatient hospital (including surgery) are all $600 copay + 40-50% coinsurance after deductible. Am I correct in understanding they pay 100% after the annual out of pocket max is met? When I look at the “estimated yearly cost” given by Healthcare.gov (with the “use the most care” option) the plans come back ranging from $13,500 to $17,600 per year with the lowest out of pocket max ($7,000) being the lowest total annual spend ($13,500). Can I trust this? What’s the best way to approach thinking about this calculation?

Assume all these plans include my current doctors (they only accept 1 network from BCBS). I will speak with the insurance/financial people at the hospital regarding the surgery in advance, and they are really good at giving estimated costs, etc. but I have not done so yet. Given that an endoscopy cost me $2500 out of pocket this year (not including doctor fees, labs, etc. so add on a few hundred to that), I assume that the surgery will be A LOT and exceed any individual maximum of even the “cheapest” PPO. My insurance dropped my PCP mid-year this year so I wouldn’t have the person to refer me to these specialists as HMOs require. This seems to happen to me a lot, and adds to my general frustration with the system, jumping between doctors and hospital systems depending on what insurance is offered on the individual market each year.

Timing:
I could get the surgery in December 2021, but as it’s not an emergency and the surgeon said timing is up to me. If I got it this year, I'm about 50% of the way to my deductible. It probably makes sense to get it in early 2022, then I’ll have met my deductible early and I can take care of any things I’ve been putting off getting looked at in 2022. If I do hit my max and have the rest of the year “free” I would love to find a holistic PCP who will help me figure out some systemic issues that regular PCPs don’t address. My last one told me to “drink more water” and then wrote me referrals for 4 different specialists. Also being self employed, surgery and recovery will result in loss of income but I've been doing this a long time and is why I have savings.

Current 2021 plan BCBS PPO Bronze 
$435/month, $6,100 deductible, $8,550 individual out of pocket max (IOOPM). I’ve spent $3,500 of my $6,100 deductible and $4,593 out of $8,550 IOOPM in 2021 just with seeing my PCP, Derm, 2 specialists, endoscopy, and ultrasound. I spend around $450/year on tier 1 prescriptions after insurance but it doesn’t count toward my deductible.

Do I even consider HMO plans? BCBS HMO plans don’t cover my doctors. Cigna has some that seem to include some (but not all) of my doctors, but I wonder if changing insurance carriers with this “pre-existing” issue will cause issues? The Cigna HMOs that I could use are not much cheaper than the cheapest PPOs ($7,000 deductible & out of pocket, $12,253 estimated annual spend - ~$500 less than the cheapest PPO). Will changing plans within BCBS cause any wait clauses? Oscar Health is a new entrant to my market, but it’s plans only cover some of my doctors, is only a bit cheaper, and I’m hesitant to try out a new health insurance at this time.

I have spent the last 20 years worrying over insurance each year but never had to consider a "medical event" and am going out of my mind trying to figure out the "trick" that's built into these options. Can you help me clear some of this up?

posted by Bunglegirl to Health & Fitness (4 answers total)

- Yes, wait until January if your doctor is find with that.
- I would not go with an HMO. The savings is relatively small and i have heard too many stories about HMOs being difficult to work with and give you no option of using an out-of-network provider.
- Check the plan details but one that our family has, once someone meets the out of pocket max, the plan pays 100% of in-network charges - no copay or coinsurance plus 100% prescription drugs but I don't remember if the same applies out of network charges.
- You can probably get an estimate of the cost of the procedure now using your current insurance. Add that to your usual expenses you will see how close you are to the out of pocket max. Given that you have a lot of deferred care, it might be a good time to invest a bit more to get what you need done.
- To pick plans, especially if they have the same networks, you do the math - for each plan that seems likely, calculate paying 100% up to the deductible and then 40% up to the out of pocket max. I wouldn't be surprised if the lower out of pocket max is better.
- Definitely set up a Health Saving Account. It lets you put aside pre-tax dollars to pay your medical expenses.
posted by metahawk at 10:05 PM on November 12, 2021

Best answer: I am an insurance company person (but not your insurance company person), and I am also in a similar position where I anticipate a needed (but not immediate) surgery while also trying to make my 2022 enrollment decisions.

I would stay with BCBS, as dealing with out of network is no fun for any of the parties involved. I would also wait until 2022, for the reasons you list above (likelihood of hitting OOPM, then use the crap out of your benefits for the rest of the year. Great idea to deal with any care that you've been deferring. I don't know about you but I've back-burnered a lot of things due to the pandemic.

If you're going to hit your OOPM anyway, the percentage of your coinsurance doesn't really matter. So the thing to do is calculate the annual premium for each option, and add it to the OOPM. This is the most that you'd pay for care/premiums for the year. In my case I found that moving from a lower premium/higher OOPM plan to a higher premium/lower OOPM plan was the solution. Yes it will hurt to have my monthly premium nearly double, but I stand to save a few grand overall due to the lower OOPM. (Since you only cover yourself this is a pretty straightforward way to math it out - it can get more complicated if you had to take family limits into consideration.)

I hope this helps, and that your surgery goes smoothly with a speedy recovery.
posted by spinturtle at 10:28 PM on November 12, 2021

I'm in a very similar position to you, and I decided to go with the BCBS PPO Bronze that is high deductible and HSA-compatible for next year. The other plan I thought heavily about was a BCBS Gold PPO plan that had much higher premiums but no real deductible. When I ran the estimated numbers they would end up costing about the same for me in an average year. If you you're going to end up right around the bronze plan's deductible, and don't get an HSA, there's a good chance the Gold plan will be cheaper. If you go significantly over your deductible, or significantly under, the bronze plan is probably cheaper. At least in my state (North Carolina) the silver plans were objectively worse than both the Gold and Bronze plans for some reason, they seem like scams. There's no real reason to switch off of BCBS if you like your current providers, the coverage is very different per company and area so if you find a good combination you should keep it if you can.

I think you are underestimating the advantages of having an HSA. It is VERY efficient for tax purposes for self-employed people because it's not just a normal deduction like your premiums are. Money you put into it doesn't count as income which is a big deal for self-employed people because it applies before the self-employment taxes. It's also a tax-free way to make investment income if you set it up that way, as the money you put in can stay there until you retire if you want so it's basically like a better and more flexible 401k because you can also spend it early on medical expenses. My financial adviser is a big fan of them and I've been max contributing to mine every year. I have a very simple HSA with a local credit union so I'm not getting good investment income, but it only took like half an hour to set up.
posted by JZig at 10:59 PM on November 12, 2021

Please keep in mind that people can plan for anticipated expenses, as you are doing, but sometimes things happen that can require a hospital stay. This is the kind of thing you really can't plan for, but based on personal experience I would advise checking into the in-hospital benefits each plan offers as well. Some out-patient procedures can be planned to minimize expense, but a good plan will offer acceptable in-hospital and emergency coverage, too.
posted by citygirl at 8:09 AM on November 13, 2021