Author Topic: High deductible vs tradional health care  (Read 4756 times)

themagicman

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High deductible vs tradional health care
« on: November 04, 2014, 11:33:59 AM »
All,

With open enrollment coming up I need to make a decision and I was wondering how much addtional you would pay for a tradional (Not sure if it is really called that, but a low deductible health plan).

My wife and I are 24 and are in good health. I hardly ever get sick and do not think I have been sick in the last 4 years. She gets sick a little more often but still hardly ever (Neither of us had a dr's visit this year) She also has two reoccuring meds, but are very cheap because they are generic.

My employer will pay me $200 a month extra to not take health insurance through them. I shopped the open market and saw we could get a high deductible plan (~$12k family deduct) for about $200 a month. Or I can take the insurance through my company (A ~$400 family deduct and much lower out of pocket max) at about $180 a month. So it would cost us about $180 more a month to have a tradional insurance policy.

My question is what would you all do? Would you pay $180 a month for a more tradional health insurance plan. We have a large emergency fund and other assets we could easily tap into so paying the high deduct would not be a problem, just want to see what would be a better deal.
We do not think we will have much medical expenses this year but could always be wrong and not sure if $180 a month was worth the chance.

One more thought would be the employer plan would be tax deducted which helps make it less than the actual $180.

Thanks for the help!

Cassie

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Re: High deductible vs tradional health care
« Reply #1 on: November 04, 2014, 11:40:01 AM »
I would take the employer plan because you never know what can happen. Accident, serious illness, etc.

pzxc

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Re: High deductible vs tradional health care
« Reply #2 on: November 04, 2014, 11:46:51 AM »
If you have the money to pay the higher deductible, that is definitely the way to go.  Also, higher deductible plans often make you eligible for an HSA (health savings account) which is another tax-advantaged account you can use to help yourself in the long run.

Insurance is meant to cover catastrophe -- things that would bankrupt you if they happened.  House burns down? Home insurance.  Car wreck kills someone? Auto insurance. Get cancer and require a quarter million for the treatment? Health insurance.

Insurance companies are a business like any other -- they exist to make profit.  For things that the average person can't afford, like $250,000 for chemotherapy or whatever, insurance makes sense because it spreads the cost out over the entire population, so that if you hit the "unlucky lottery" you're covered even though you can't pay for it yourself, by everyone else who did NOT get cancer subsidizing your treatment by paying their premiums.

Health insurance does NOT make sense for everyday routine things, like prescriptions, checkups, etc -- that is not insurance, that is prepaid healthcare. And the insurance companies won't do something if they can't make a profit out of it, because they won't voluntarily go bankrupt paying for everyone's prescriptions, so the only way it works (and the way it DOES work), is they raise the premiums to cover the cost of all that PLUS make themselves a little profit.

If you can afford to pay for the small things yourself, it will always be cheaper for you to do so because you don't have to pay for the added cream on top that the insurance companies MUST make in order to pay their staff, pay for the building's overhead like electricity and phones and the billing system etc, plus a little profit to stay in business.

Plus, the fact that you're 24 means it's very unlikely you will have a major problem.  If the low deductible is 2k and the high deductible is 10k, then it doesn't make one shred of difference if you never have more than 2k in costs in a single year -- in that case you paid the extra premiums for a low deductible for nothing.

This is a no-brainer:  take the highest deductible you can, get an HSA so you have another tax-advantaged account to help you, and just self-insure for the small stuff that is unlikely to come up anyway.

The only exception might be if you have something KNOWN that is going to come up in the next year, like if you're going to be having a baby and want the lower deductible so it doesn't cost you as much for the birth.  But you can always switch plans during the open enrollment period, so there's no reason to anticipate farther than 1 year ahead when you're planning things like having a kid etc.

Allen

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Re: High deductible vs tradional health care
« Reply #3 on: November 04, 2014, 03:03:34 PM »
Your employer only gives you TWO HUNDRED DOLLARS to not take their health insurance?!

If it is like the other places I've worked, the employer is paying a hell of a lot more than $200 on their side of the insurance, but I don't know your particular case.

How much does your health insurance cost if you get it through the employer?

themagicman

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Re: High deductible vs tradional health care
« Reply #4 on: November 04, 2014, 03:06:04 PM »
Your employer only gives you TWO HUNDRED DOLLARS to not take their health insurance?!

If it is like the other places I've worked, the employer is paying a hell of a lot more than $200 on their side of the insurance, but I don't know your particular case.

How much does your health insurance cost if you get it through the employer?

Yeah, it is only $200 that they give you a month (Although I imagine they pay much more if I take it)

Healthcare through my employer is $180

Allen

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Re: High deductible vs tradional health care
« Reply #5 on: November 04, 2014, 03:08:19 PM »
Well, you'd end up with 'free' healthcare and could potentially contribute to an HSA if you chose an appropriate plan.

Still though, it feels fishy to me, I would stick with the employer plan.  What are some of your other coworkers deciding? (I assume they have the same offer)

I'm assuming your employer plan is more normal with a more normal deductible

themagicman

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Re: High deductible vs tradional health care
« Reply #6 on: November 04, 2014, 03:19:05 PM »
Well, you'd end up with 'free' healthcare and could potentially contribute to an HSA if you chose an appropriate plan.

Still though, it feels fishy to me, I would stick with the employer plan.  What are some of your other coworkers deciding? (I assume they have the same offer)

I'm assuming your employer plan is more normal with a more normal deductible

Yes, it has a $400 deductible. A lot of them are taking the $200 and going to a spouses plan. Unfortunatly my spouses plan is extremely expensive.

I like the fact that I could contribute to the HSA with the HD plan

rocksinmyhead

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Re: High deductible vs tradional health care
« Reply #7 on: November 04, 2014, 03:58:54 PM »
following to see what people say... we are getting the option of an HDHP through our employer this year for the first time and I'm thinking about taking it. in the past two years I've only been to the doctor for the yearly gyno exam plus once to urgent care for seriously bad poison ivy. the only thing I need to look into is how my (non-generic) birth control would be covered.

Allen

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Re: High deductible vs tradional health care
« Reply #8 on: November 04, 2014, 04:45:27 PM »
You are healthy now, but it's a gamble.  I think the safe thing to do is stick with the low deductible plan that only costs you $180/month.

 

Wow, a phone plan for fifteen bucks!