Graduated Learning: Life after College

I got my degree, I got a job…now what?

Open enrollment returns November 17, 2013

You would think I’d pay attention to deadlines.  But I’m not the best at that.  So that may explain why I finally picked my 2014 benefits at around 10pm before my midnight deadline a few Fridays ago.

I went through this whole ordeal last year.  I also reviewed a bunch of the jargon related to health insurance plans. The  available options changed this year, so I needed to take another look.

I still had a similar question: Would I rather pay more up front (in premiums) so that I get cheaper coverage immediately than pay less but then have to pay most out of pocket?

I had 3 options this year.  They eliminated the option I went with last year (the Exclusive Provider Organization (EPO)), so I was left with the Point of Service (POS) plan and two “high deductible” options with HSAs.  Last year, I picked the option that allowed me to not think about things as much, i.e. the EPO.  Basically, if I was sick, or needed to see a specialist, I looked up a doctor in the network, and the price of the visit was just a copay.  No need to shop around for the doctor or facility that would be the cheapest.

With the High Deductible Health Plans (HDHP), or as they’re often called, Consumer Driven Health Plans, the idea is to put the spending decisions in the hands of the consumer.  The idea scared me last year, as I mentioned above, because I didn’t have a good way of knowing how much any doctor visit would cost.  For both of the plans, the coverage is a bit different.  Instead of paying a set amount per doctor visit/surgery/etc., the process can be a bit more involved.  You’re encouraged to shop around (which is often not possible if, say, there’s an emergency), and prices can be a bit confusing.  Many websites have started offering cost estimators, like the one at FairHealthConsumer.org, or through your insurer’s website.  There’s another collection of lookup options from this article in the LA Times or this article in the Wall Street Journal.  The insurance usually negotiates a discount, but then you are left responsible for some (if you’ve met the deductible) or all of the remaining cost (if you haven’t met the deductible yet).

The assumptions I’m making about my medical needs for next year:  hopefully don’t need many visits, and definitely not enough to meet the high deductible ($1500 for one, $2000 for the other).

All the plans have an out of pocket maximum, so the range between the “total expenses” for me (premium + out of pocket maximum) is $4-5k.  That’s the total amount of money that would be gone (granted much of it paid with pre-tax dollars).  Hopefully, it wont come to that, but it’s good to know that I wont go into debt forever if something bad were to happen to me (medically speaking).

I went with the plan with the lowest premium.  Then I set my HSA contribution to the difference between the lowest premium and the highest premium, so I wouldn’t feel so bad about having to spend the money on medical expenses.  This plan also includes a $750 contribution from my employer into my HSA.  So, I might use all this, or more of it, or less, but any money I don’t use can be kept in my HSA from year to year.

Another thing to consider:  Once my fiance and I get married, we can (and should) reevaluate our benefit elections.  It’s considered one of the many “qualifying life changes” that allows for us to modify our benefit elections.  It might be cheaper for one of us to join the other person’s plan.  We’ll see how the first half of the year goes, and see which of the plans works for us.  Knowing that I can change my health plan does help me feel a little less worried about my insurance choice.

So, which plans are you looking at?  A co-pay based system?  A high deductible plan with an HSA?  Has all this insurance stuff been confusing?  Are you one of the people in the individual market trying to navigate the options through the Affordable Care Act?  What questions did you ask yourself (or HR) to figure out what plan was best for you?  Let’s talk health insurance!

 

Benefits Open Enrollment: The Decision Looms November 9, 2012

Filed under: Personal Finance — Stephanie @ 8:36 am
Tags: , , , , , , ,

Every year I know I have to do this.  And every year I just pick something last minute and hope it works out.

Like many companies, my employer offers a bunch of different benefits.  I know I’m lucky in some respects, because not all companies provide as many benefits or coverage.  Every year, we get a packet with information, along with links to a few sites that help you compare options.  This year, we have the choice between a Point of Service (POS) plan, an Exclusive Provider Organization (EPO) plan, and two different High Deductible Health Plans (HDHP) that include a Health Savings Account (HSA).  Yeah, it’s basically an Alphabet Soup of Health Plans.

Every year, I think I pick the same plan (or the closest available option).  I’m not sure it’s actually the best plan for me.  There’s a questionnaire on my company’s benefits page that you can fill out and it tells you what plan is the best for my needs/wants.  According to the questionnaire  I should go for the slightly pricier HSA plan, where I pay a bit more for the plan, and the company puts $500 into my HSA (versus $750 into an HSA for the cheaper plan), where I pay a smaller percent of every medical expense than the cheaper HSA.  Confused?  Yeah.

My other options (the EPO and the POS) both have set copays rather than the coinsurance percentage that you have to pay for each service for the HSA plans.  And that’s part of the reason I’m shying away from the HSA-based plans.  I have no idea what anything costs.  I understand that HSA plans are great because they enable a patient to take control of their expenses and are especially good for people who don’t have a lot of medical expenses or problems (the young and healthy).  But with the current health care market, I have no idea how to shop around for medical services.  I have no idea how much a specialist at one practice charges versus another, or how much tests costs.  Granted, for most things, there’s probably a phone number I could call, and maybe I could track down a price.  But to be honest, I don’t want to deal with that.

Things to consider:

Premium costs:  This is the amount I’ll be paying for my insurance plan for the year.  For me, the range is $930/year for the “cheapest” and $1660/year for the most expensive.  Interesting to note, with the cheapest plan, my company will contribute $750 to my HSA, which does make that plan look a lot more appealing.  Other interesting note about premiums:  in my company (and many others) you can pay for the premium with pre-tax dollars.  Which does take a little bit of the sting out of the price.

Deductible:  This is the amount I pay on medical expenses out of pocket before my plan will pay for benefits.  Before you reach the deductible, you pay 100% of your medical costs.  Beyond that, the insurance either covers most or all of the costs, but you usually have to pay a set dollar amount or a percentage of the cost.  That cheapest HSA plan I mentioned comes with a $2000 annual deductible, which means if I need any medical services (beyond a few expenses that are covered 100% before deductible, like preventative care and some maintenance drugs listed on the Treasury Guidance list / Preventative Therapy Drug List [pdf]) I’ll have to pay for all of it either out of pocket or with the money in my HSA.

Maximum Out-of-Pocket:  This is the maximum amount of money I’ll have to spend in a year on medical expenses.  This is where it really acts as an “insurance”.  Heaven forbid something bad happens to you.  Disease, accidents, other scary things like that.  Well, the Maximum Out-of-Pocket amount means a $40k hospital bill will only cost you up to your maximum (for my plan options the maximum is anywhere from $1500 to $4000).  This is the kind of thing where you would be glad to have your HSAs, FSAs, and of course, your emergency funds.

In Network vs. Out-of-network requirements:  For the EPO plan, I’m only covered if I go to a doctor that’s “in network”, which means there’s a list of approved doctors/facilities that I can go to.  I haven’t had a problem with this in the past, except when it turned out only some of the members of the medical practice were in my network, so I had to go to a different doctor within a practice.  For the POS plan, it’s similar to the EPO plan, in that you have copays for each visit.  But you have the option of going to out-of-network doctors.  However, it is more expensive to go out-of-network than it is to stay in-network (i.e. the insurance covers a smaller percentage or requires a higher copay for the out-of-network services).

The other considerations I needed to make was my expected medical expenses (checkups (though some of those are already covered at 100% regardless of plan I choose) specialist appointments, prescriptions, etc.).  And I need to consider what is covered for anything unexpected (small things like sprained ankles or strep throat, or big bad diseases or accidents).  What will I have to pay for those?

So, what did I pick?  I went with the EPO plan.  That’s the one with the highest premium, but I know there are certain healthcare expenses I’ll be incurring and the way the plans are set up, this looks to be my best option.  Plus, this plan has the lowest Maximum out of pocket (and max + premium ends up being the lowest out of all 4 options).  Also, with the high-deductible plans, I feel like there’s a bit of a disincentive to visiting the doctor.  And since I’m already pretty bad at going to the doctor when I should be going, I don’t want the money issue to make things worse.

Have you had to sort through all these confusing different medical plans?  Or are you given one option?  Do you have an employer-based plan, or are you shopping on the open market?  What impacted your health insurance decisions?

 

 
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