Warning: Undefined array key "adf" in /home4/hpvcxhmy/public_html/wp-content/plugins/similarity/similarity.php on line 69
Warning: Undefined array key "sim_pages" in /home4/hpvcxhmy/public_html/wp-content/plugins/similarity/similarity.php on line 70
Maybe this is related to being under a dentists drill this morning, but today’s topic is the cost of health care. A story over at The Health Insurance Myth detailing how much more a visit to the eye doctor costs for insurance companies was very revealing. Add to that the fact that we are entering the Open Enrollment period at Intermountain Healthcare where I get to reassess my health insurance situation and make any changes necessary and you can see why I would be thinking about this today.
I’ve never done this before since I’ve never had a year where I was not in a new job, had just enrolled immediately prior to the Open Enrollment period, or had the company completely changing their benefits package. This year we get a mild rate increase over last year and there are a couple of new benefits available, but nothing truly drastic. Open Enrollment doesn’t mean too much to me since I don’t foresee making any significant changes, but I was pleasantly surprised to see Intermountain subtly encouraging employees to choose their High Deductible plan. There was nothing really overt about it, but while rates are increasing for all the plans they still pay the entire premium for full time employees on the HD plan and on top of that they reduced the annual out of pocket maximum by almost half so those using these plans have lower financial risk than before.
To give some perspective – their no-deductible plan costs more in premiums than the deductible of the high deductible plan – that’s before you set aside any money in a Flexible Spending Account (FSA) to cover for the copays (money that disappears if you don’t use it). The lower deductible plans cost less than the deductible on th HD plan until you factor in their deductibles and copays. For anyone who expects to pay the full deductible they can contribute their premium and FSA money to a Health Savings Account (HSA) and easily cover the out of pocket maximum. Any money they don’t spend in the HSA rolls over to the next year and earns interest. For those of us who don’t expect to even meet the full deductible we can build up an HSA that earns interest and is almost perpetually funded very quickly so that we can devote the extra cash to other needs.
All of this deals with the insurance/health care issue at a personal level, but it should illustrate the need to step outside the mindset of traditional health insurance as we try to tackle this public challenge – the last thing we need to do with this monster is limit our options at the outset. (Unfortunately Medicaid, CHIP, and UPP serve as good examples of programs where we artificially limit our options.)
7 replies on “The Costs of Health Insurance”
We don’t carry vision or dental insurance. We just pay ourselves, and then if we have enough in our flex account, we get reimbursed.
I wonder if it would be worth it to do that with dr. visits too- then just carry catastrophic insurance or something. I’ll have to check how much it actually costs to go see our doctor. I wonder if she gives a discount for cash…
hmmm, maybe not a good idea- I’m just thinking of the 6 trips to the dr. recently and 2 trips to instacare when we all had strep throat and ear infections (multiple times).
We’ve had high deductible plans for a years and it’s great. A trip to the doctor is usually less than $100 which means that we can go once a week on the money we save in premiums. It would be tough if we had “6 trips to the dr. recently and 2 trips to instacare” right after starting, but after a couple of months of putting the difference in premiums into an HSA I can easily cover those trips and they all count toward that deductible. Every time you go to the doctor and pay a copy it does not count toward the deductible (at least for every plan I’ve seen) so the copays and the higher premium of a traditional plan make it easy to cover the higher deductible on our plan.
I’ll have to look into it, although I remember last year when we looked at all the options (since premiums had gone way up) the one we went with was the best deal for us.
Our monthly premium is just under $500/month so I can’t imagine saving $400 (but we don’t have maternity coverage, so maybe that’s why it’s less).
Obviously you have to look at it for your situation, but remember that the equation is Difference in Premium + cost of copays for the visits you would expect to make and then compare that to the difference in the deductibles of the plans available to you.
For example: The best traditional plan (cost-wise) available to me costs $2054 more in premiums and has a deductible that is $2250 lower than my HD plan with a $20 copay.
If I put those saved premium dollars in my HSA I can go to the doctor 20 times in the year (which would cost another $400 in copays on the other plan) just on the excess premiums of the traditional plan. It basically evens out at 25 visits ($2500 on the HD plan compared to $2054 + $500 = $2554 on the traditional plan) by which time I have a $750 deductible worth of risk on the traditional plan but only $500 worth of risk left on the HD plan.
I’m not trying to make the sale here so much as try to show how the math works. I hope I haven’t made it more confusing because I fear that confusion is the reason that many people do not take advantage of these plans when they have the option.
Ugg, funny timing, I just got a call from our insurance broker. Due to health claims by everyone in my “insurance pool”, rates are going up $60/month.
The really funny thing is that if everyone in your insurance pool quit submitting claims the rates would never go down. Good luck with figuring out your best options.