Help Me Pick a Health Plan!

So, my university is changing its entire health plan around and we all have to do open enrollment next month. To be honest, as I did a little research (primarily asking friends how much their premiums are) my major conclusion so far is that I’m really lucky to work here. By the standards of American health care, all the plans are a very reasonable cost, especially for single people like me (premium costs go up significantly for families or even for just a spouse.)

I have two options (there’s another one, but these are the two I’m considering). One is a “high-deductible” plan, and one is the same PPO I have now.

In both cases, I continue to have access to the faculty-staff health center at the university, which is a small but full-service clinic that does general health stuff and has a great doctor in residence that I really like, plus an on-site pharmacy. It’s an amazing benefit. In the 15 months I’ve worked here, I’ve only been anywhere but the clinic twice: once for an eye infection, and once for a gynecology exam. There’s a $15 co-pay for each visit to the clinic, regardless of what insurance plan I choose. Also, I’m generally very healthy and am only 36. So we’re really talking about situations where I break my leg or get cancer, not about managing ongoing chronic health issues.

OK, I know you were waiting for the numbers. Here they are [each premium is reduced because I already completed a health screening to get a discount]:

  • High-deductible plan:
    • $11/month premium (!!)
    • $1500 deductible
    • out-of-pocket max of $5000
    • university will put $500 in an account to help cover the deductible; this will roll over year to year if I stay with the university, but it’s not a HSA; I lose it if I leave the job. Functionally though this means it’s really a $1000 deductible.
    • If I go anywhere but the health center, I have to pay the full cost of the visit until I meet my deductible, so if anything does go wrong and I need to see off-campus doctors, this could get expensive fast.
  • PPO plan
    • $55/month premium
    • $400 deductible
    • out-of-pocket max $1950
    • All visits to off-campus doctors (if they’re in network) covered except for $30 co-pay.

I was leaning towards the high-deductible plan when I first looked through the info, because hot damn, just look at that monthly premium. And the out of pocket max is just not all that high, in the grand scheme of things, so if disaster did strike I’d survive, financially. But now that I look at it more, hmm. I’d take home about $450 more over the course of the entire year (after taxes.) If I stuck to visiting the health center all year, that would work out just great. But if I had to start seeing off-campus doctors for whatever reason, that $450 savings would vanish quickly as I’d have to pay the full cost of the visits up until the deductible is met. Is it enough of a take-home bonus to make it worth the risk?

What questions am I not asking? What would you do? Is it worth doing the high deductible plan if I don’t get an HSA to go with it? (I can still contribute to an FSA, but that’s a use-it-or-lose-it account so I’ll only put enough into it to cover the cost of contact lenses and a few clinic visits.)

 

 

24 thoughts on “Help Me Pick a Health Plan!

  1. Mandy says:

    I was struck by that high deductible plan at first, because yowza that’s a good deal. Eleven bucks a month! And the deductible is not all that high, nor is the out of pocket max. But, I lean heavily toward the PPO because it’s not just a good deal, it’s a damn good deal. Insurance is a “what if” game anyway, no matter how we play it, so I think the monthly savings between $11 and $55 is one of those things where we can invest in ourselves or we can pinch pennies. You’re rocking the savings, so I think investing that extra amount monthly in your health insurance makes total sense.

    1. thesingledollar says:

      I know, right? I keep looking at it and going “…$11? Really?” But given that the PPO is also a screaming good deal, it might not be worth the extra risk. I don’t want to end up being penny-wise.

  2. I am a big fan of High Deductible plans, especially because you are healthy.

    However, double check the out of pocket max for the low deductible plan. $1950 seems stupid low. With my options at work, we have high and low deductible with associated premiums, but the OOP Max is roughly the same between the two plans. If you could pay $55/month to know you won’t pay more than $2610 (oop + premium), that would be excellent.
    If the numbers are right, I would probably choose the HDP because I am also healthy and you have the Health Center at your finger tips. Pending any disasters, you’ll likely only go there for care. In addition, if you have any whoopsies and have to go to another doc, you’ve got an additional $400 to cover the expenses before you start paying.
    Based on your history, the Low Deductible plan would only be great if you get sick or have an emergency. Is committing to spend an extra $528 up front worth it to know you don’t have to pay an extra $2522 on the HDP (HDP OOP + Premium -LDP + Premium) something that would float your boat?

    1. thesingledollar says:

      I’m tweeting you a picture of the numbers — would be interested in what you think after you see the tweet 🙂 I’m assuming you meant “If the numbers are WRONG” you’d choose the HDP? And that if I’m reading this right, I should probably choose the PPO?

  3. Hannah says:

    I have a high deductible plan because we come out ahead financially even when we hit the deductible (like this year), but that’s because of the HSA component.

    That $11 premium is pretty enticing, so I personally would choose that, but if you have any thought that you might need to see a specialist for any reason (physical therapy included), I would actually choose the high deductible plan just because specialist visits cost anywhere from $300 to $500 per visit (at least if you’re doing PT or sleep studies).

    1. thesingledollar says:

      The PT is a reason to reconsider, definitely — I mean, I don’t do it now, but I know lots of people who’ve suddenly needed it out of nowhere….

  4. Cindy says:

    I had the same dilemma a couple of years ago trying to decide between our company’s free, high deductible plan, or the $7 per week, lower deductible plan. I had been on the free plan for a year, and thought I was getting a really good deal. And, compared to what a lot of people pay, I really was. But it turns out I could have saved myself a lot of money by paying a little more up-front.

    One thing to look into is how the plans cover routine things, like cancer screenings. Unless they have a grandfathered status, things like PAP smears and mammograms should be free. When I first had to decide between the two plans, one plan was grandfathered, so I would have had to pay my deductible for those things, and the other was not, so under ACA, those things were free. Now both plans offered at our company cover them. I’ve been shocked at how many things have been covered 100% by my insurance this year: PAPs, mammograms, a biopsy, cryotherapy… I think I’ve only paid like $50 towards my deductible this year, plus a slew of $20-25 co-pays.

    It’s hard knowing in advance how much medical care you’ll need in any given year. The best you can do is make the most informed decision you can given your person history and the information you have available. From there you just have to relax and know that, either way, you’re getting a pretty good deal!

    1. thesingledollar says:

      Those are good questions. I’ll have to check the HD plan; I know the PPO covers a yearly gynecology exam/pap smear at 100% with no copay. But it’s what you mention in your first paragraph that gives me pause. Would it be penny-wise to go for the HD plan?

  5. Jason says:

    I personally would choose the PPO plan rather than the HDP because even though you are health you never know what could happen. And the truth is we are talking about a difference of $40 that gets made up in the tax deduction it provides. So, in essence, you get a plan that covers more stuff for about the same amount of money that you would pay. I personally think that is a better set up. Part of that is because this year my wife broke her ankle severely. I mean physical therapy the works. I am so glad I did the normal PPO plan. And we also used our FSA almost right away to pay for the bills. But isn’t that what insurance is to help you cover any big problems.

    1. thesingledollar says:

      Yeah, it’s definitely a risk/reward calculation. Increasingly I’m thinking the extra $450 back isn’t worth the risk. Thanks!

  6. Maria says:

    I’m pretty risk averse, so I think I’d choose the PPO plan. Like Jason said, even though you’re healthy you just never know. Almost everyone thinks it can only happen to “other people”, but you know, we’re all “other people” to everyone except ourselves. 8)

    1. thesingledollar says:

      That is so true 🙂 Thanks!

  7. Leigh says:

    Your high-deductible plan sounds like one I had with a previous employer. If it was an HSA plan, I would absolutely say go for it and put (at least) the difference between the monthly premiums into an HSA.

    The difference in annual premiums between the two is $528. And if you take the university’s $500 off the higher deductible, that one is $1,000, making it $600 higher than the PPO.

    I assume that both plans have the same coinsurance amount after the deductible is hit? Or is it still co-pays? How does that work?

    With a previous employer, we had an HMO plan and a plan like your high deductible one. The difference in premiums was the deductible on the high deductible one and then after the deductible, you paid a 10% coinsurance, which was cheaper than the co-pays! So that was a slam dunk. Yours almost seem like a coin flip with the information I’m seeing. I wish you had access to a HSA! That would really make the high-deductible one worth it.

    1. thesingledollar says:

      Yeah, if I had access to an HSA I’d probably go for that one. Maybe they’ll add one in a year or two?

      I should look more closely at the coinsurance rules, though. I’ve never had coinsurance before and I don’t really have a great understanding of how it works. That can be my project for tomorrow — thanks for inspiring me to really try to understand that part.

  8. I think this is one of those questions of what helps you sleep at night. Both plans require roughly $1000 of spending to access any benefits ($1000 deductible + $132 premiums on the HDP and $400 deductible + $660 premium on the PPO). The lower out of pocket max on the PPO is nice, but unlikely to matter much unless something catastrophic happens. If it were me, and I had that incredible option of the health center, I’d go HDP, because with the PPO you HAVE to spend that $660 in premiums, whereas with the HDP you only have to spend $132. If you start using either, your minimum spend is roughly the same, but there’s a good chance with the HDP that you can save that $1000. But in the past I might have wanted the PPO for more assurance that I was covered at a higher level — like how we used to pay more for lower car insurance deductibles, but now are fine with the high ones because we know we have enough emergency cash to cover them.

    That’s a long way of saying: Trust your gut. Not every decision has to come from your brain. 🙂

    1. thesingledollar says:

      Huh, I hadn’t thought to add it up quite like that and it’s definitely an interesting way to look at it. I need to look more closely at the coinsurance terms, but…hmm.

  9. Amanda says:

    We’re pretty much the same age (I’m 35) and like you, I’m very healthy. My only real weak points are my eyes and teeth/jaw, which aren’t covered by medical insurance anyway. (Luckily, I also get vision/dental, though neither are stellar.) If I were given these choices, I’d go with the PPO. I t’ll be pretty easy and painless (I’m assuming the premium is just deducted from your paycheck) to figure the $55 into your budget. And if you’re anything like me, if a health problem were to arise, that would already be stress enough, without having to shell out a bunch of money to deal with it. $5000 is a lot of money for most of us and if anything came up that required multiple visits to diagnose (plus tests!) you could easily be spending thousands. It seems like we’re getting to the age where lots of folks start having random health things (exercise injuries, weird headaches, and hormonal issues have cropped up in my circle of people), which aren’t exactly dire, but require some medical treatment. I’d hedge my bets and spend a bit more for the peace of mind.

    1. thesingledollar says:

      Thanks for this — it’s really good to hear from someone in my same general situation. (I even also spend the most on my eyes and teeth! I do have separate plans for those, but they’re not changing this year so nothing new to think about.) I think the real question is, what will stress me out most? And I’m not sure I know the answer to that question. I need to seriously think that through before I make the call here.

  10. I always want to know who’s in the network. If you go with the PPO, but want to see someone out of the network, you’ll end up paying the full cost, like with the high-deductible plan, right? I always want to know where someone went to medical school and did their training, as well as their malpractice history, before I see them, in addition to their experience with whatever I’m seeing them for. So checking the size and scope of the network would be important to me.

    1. thesingledollar says:

      It’s a good question. In this case, not so relevant, since both plans have the same network (there’s another HMO with a different, much smaller network, but I’m not thinking about that one) but definitely important to me too.

  11. jenny says:

    I am a 38 year old single girl who lives a healthy lifestyle:) I did the high deductible plan with the HSA option.
    My medical plan would covers 80% expenses after 1500 deductible. My cost was 22 a paycheck for the policy. I am paid weekly.This HSA could be rolled over to another employee. My account is never zeroed out at the end of the year..it rolls over. Please don’t confuse this with a FSA options. HSA options have changed alot in recent years. My current employer would contribute 500 to my HSA every year. Hooray! That is a chunk of change for future use…..barring no accidents;)
    Unfortunately this option may not save you money up front. Girlfriend, we are single! In the long run, it may be an answer to your prayers! I am coming from the land of traditional insurance policies. This switch was a little scary. I don’t need medical attention on a monthly basis. I am throwing away money on traditional coverage. I could be putting it in the HSA for future use.
    So I decided to have a weekly amount taken out of my check to make sure my HSA would have the 1500 dollar deductible met by the end of the first year. I could lower or raise the amount the following year if needed. I prefer to raise it…..it is lowering my real income. Along with 401k contributions…this can change my tax bracket. I am not married:) I was kind of sweating out the first 6 months while accumulating a sum in the HSA:) I roughly had to contribute at least 30 to the HSA, in addition to 22 from my check for my policy. So…. minium 55 dollars weekly for the policy and HSA contribution out of my check. The traditional plan with my company was around 43 a week with a 1500 deductible. Yes…my company did not offer stellar options for medical:) The marketplace is a new concept. I went with the sure thing for now.
    So to all those who must make lemonade out lemons, listen up.
    Here is how this plan saved my a××. I did not have to pull money from personal savings to cover medical expenses. I was eating trail mix and bit down on something hard. I cracked a tooth! I knew it was crown time. The hazards of getting older:) Most dental plans cover 50% on this produce. I knew I was looking at a minimum 500 out of pocket.
    Well HSA’s cover dental expenses! I swiped my HSA debit card after my appointment…..done and paid for. You can read the IRS pamphlet for a 501 account. I can’t remember the exact technical term.
    When you are looking over the other items covered by this account. You can imagine/forecast the other future expenses this account can be used for, besides catastrophic occurences.:)
    Just a side note…..all plans must cover certain preventive care options regardless of the deductible. It may not be all costs…but my HSA has more than enough to weather the storm if I don’t make the deductible.

    1. thesingledollar says:

      Thank you for this totally awesome comment! I really appreciate it and I think anyone finding this post with the same question will too.

      Unfortunately for me, the HD plan at my university would NOT come with an HSA — I was hoping it would and I was totally going to do that because everyone loves them so much. Instead, there’s some other kind of account that they put the $500 in, and if I want to put my own money into something it’s got to be an FSA (use it or lose it.) I’m hoping they will start offering an HSA eventually once the new plans settle in.

  12. Christine says:

    Hi there! Such a great conversation going on there. I’m late in the game and didn’t read through all the comments but I did want to suggest you ask your employer if there will ever be a possibility of rolling that Pseudo-HSA over into something you can keep.

    I was faced with this same dilema 2 years ago when my employer took away PPO. I am 40 and also single so I was scared cause my yearly medical bills were about $3500. I wasn’t taking care of myself back then and went to the Dr for every little thing cause it was ceap to go. These High Deductible plans are popular with companies because it forces the employee to take their health seriously to avoid losing money, this on turn saves the comapny money. Anyhow, I would suggest the HD Plan. Simply because you are healthy and said you don’t see a dr often. I would say squirrel away the extra out of pocket money into an investment account and try to stay super healthy and super safe for at least 2 years to let your pseudo-HSA acct to accumulate enough to cover your yearly Deductible (500 yr1+500 yr2=1000 since you said it rolls over year to year as long as you stay with the company). Then sit pretty knowing you have money set aside to cover that high deductible if something big happens.

    Some other questions you should ask your company: Can you contribute to the Pseudo-HSA pre-tax? What kinds of things can you use that money in the Pseudo-HSA for? Band-Aids, glasses, contacts, lens solution, dental, feminine products, pharmacy items, chiropractor, physical therapy massage? A normal HSA allows you to use that money for these things, which would reduce your normal expenses account for these kinds of items.

    I hope this helps. Email me if you have other questions. I did weeks of research when I was first faced with this choice and I’m glad I went with the HDP. My coworkers think I’m crazy for that but they don’t know, that after 3 short years, I have enough to cover my $1500 deductible twice over and have reduced my tax bracket down a level. Good luck to you!

    1. thesingledollar says:

      Yeah, I am totally asking if they might turn it into an HSA in the future. If they do, then the choice becomes much clearer cut. Thanks for the discussion of your experience!

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