Author Topic: Am I missing something? Health Insurance Questions.  (Read 3853 times)

NatureKnight

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Am I missing something? Health Insurance Questions.
« on: November 05, 2014, 03:36:19 PM »
I've seen a few questions about health insurance open enrollment, so I thought I'd add my own situation. We have 3 options: HSA 1, HSA 2, or PPO. All are with the same company, so the network and discounts are the same. Preventative care is covered 100% with all.

This is the key: we are expecting a baby towards the beginning of the year.

Here are the breakdowns:

HSA 1:
4000 deductible*
8000 max
20% coinsurance
1500 company contribution
1956 premium

HSA 2:
3000 deductible*
5000 max
10% coinsurance
1000 company contribution
4803 premium
*NOTE: The deductible can be satisfied by one family member or a combination of family members.

PPO:
1400 deductible**
10000 max
10% coinsurance***
5838 premium
**NOTE: Two people must meet their own $700 deductible for the $1400 deductible family deductible to be covered (it can't just come from one person)
***NOTE: Doctor visits are covered 100% after $25 copay. Specialist visits are covered 100% after $40 copay. Emergency room/physician fee covered 100% after $150 copay. Urgent care facility covered 100% after $40 copay.

It seems to me that HSA 1 comes out to be the best, but am I missing something?
Say it is a $10,000 bill for our insurance for an uncomplicated birth (not sure what it would really be).
HSA 1: 4000+(10000-4000)*.2+1956-1500= $5656
HSA 2: 3000+(10000-3000)*.1+4803-1000= $7503
PPO:    1400+(10000-1400)*.1+5838=           $8098
I realize this is a little simplified due to the rules for meeting deductibles, etc. I know the HSAs would leave us with a higher hospital bill, but I've been told that hospitals let you make payments interest free.

It seems the only situation where the PPO might be better is if we find ourselves going to the doctor/emergency room/urgent care often. Normally, we don't really use any of these but who knows how healthy our kid will be. Is the higher premium worth it for the small copayments in case of emergency?

What are your thoughts? Thanks.

mike3725

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Re: Am I missing something? Health Insurance Questions.
« Reply #1 on: November 05, 2014, 07:35:22 PM »
PPO:
1400 deductible**
10000 max
10% coinsurance***
5838 premium
**NOTE: Two people must meet their own $700 deductible for the $1400 deductible family deductible to be covered (it can't just come from one person)
***NOTE: Doctor visits are covered 100% after $25 copay. Specialist visits are covered 100% after $40 copay. Emergency room/physician fee covered 100% after $150 copay. Urgent care facility covered 100% after $40 copay.

PPO:    1400+(10000-1400)*.1+5838=           $8098

I'm not sure I'm understanding the deductible on the PPO.  Buf if you're saying one person can only have a $700 deductible before co-insurance kicks in, then would the PPO example be more like:
700+(10000-700)*.1+5838 = 7468  ??

NatureKnight

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Re: Am I missing something? Health Insurance Questions.
« Reply #2 on: November 06, 2014, 12:43:09 AM »
Yes, it is just a $700 deductible per person. However, I've been told that when you are billed for giving birth, both the mom and the baby get their own bills. So, I think if we both got over $700 worth of bills, it would work out to be the same as my original. Here is what I was thinking at least:

Say my part of the $10,000 is $6,500, and our child's is $3,500. Then I'd think it'd still work out to be the same this way:
700+(6500-700)*.1+700+(3500-700)*.1+5838= $8098

Does that seem right?


kendallf

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Re: Am I missing something? Health Insurance Questions.
« Reply #3 on: November 06, 2014, 08:48:40 AM »
It's instructive to calculate "worst case" costs under each plan.  I'll take a rough shot at them here:

HSA 1: Max OOP reached at 24k total cost. (Deductible + .20 of costs between deductible and Max OOP ceiling)  Total cost of $8456 (premium + Max OOP - Employer contribution)

HSA 2: Max OOP reached at 23k total cost.  (Deductible + .10 of costs between deductible and Max OOP ceiling)  Total cost of $8803 (premium + Max OOP - Employer contribution)

PPO: Max OOP reached at 87.4k total cost (!).  Total cost of $15.8k (premium + Max OOP)
This ignores the small benefit of 100% covered visits; I'd assume if you hit max OOP somebody was in the hospital for a while and these wouldn't save you much anyway).

I think this aptly illustrates why for many people who have premium pass-through HDHPs are a better deal, even for families dealing with big medical issues.   The exception might be for those who have a chronic but manageable condition requiring regular office visits that wouldn't require co-insurance under a PPO plan.

NatureKnight

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Re: Am I missing something? Health Insurance Questions.
« Reply #4 on: November 06, 2014, 06:20:46 PM »
Thanks, kendallf. I think since giving birth would require coinsurance with the PPO anyway, HSA 1 seems like the way to go for next year. The low premium is hard to beat.

The PPO used to have better numbers, but they are doubling the max for next year and more than doubling the deductible. I'm glad we decided to look into the HSAs instead of just going with the PPO again.

socaso

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Re: Am I missing something? Health Insurance Questions.
« Reply #5 on: November 06, 2014, 07:36:26 PM »
Yes, it is just a $700 deductible per person. However, I've been told that when you are billed for giving birth, both the mom and the baby get their own bills. So, I think if we both got over $700 worth of bills, it would work out to be the same as my original. Here is what I was thinking at least:

Say my part of the $10,000 is $6,500, and our child's is $3,500. Then I'd think it'd still work out to be the same this way:
700+(6500-700)*.1+700+(3500-700)*.1+5838= $8098

Does that seem right?
When I had my son the bills were all for me. We signed him up for insurance at the hospital but there were no bills in his name until we started taking him to the doctor after we had taken him home.

FarmerPete

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Re: Am I missing something? Health Insurance Questions.
« Reply #6 on: November 07, 2014, 07:56:59 AM »
I don't know what normal is for childbirth, but my wife's bill was well over $25,000 AFTER negotiations by the insurance.  The epidural cost $5k alone.  She had an induced birth.  It took roughly 36 hours from getting to the hospital till childbirth.  It was a normal delivery.  She was there another 2.5 days after.  That seemed really high to me, but since my insurance covered 100%, I didn't argue.

NatureKnight

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Re: Am I missing something? Health Insurance Questions.
« Reply #7 on: November 07, 2014, 01:14:31 PM »
Oh wow. Maybe who they bill just depends on the hospital? Thanks for letting me know yours was different, socaso.

FarmerPete, good thing your insurance covered all that. Thanks for letting me know the bill was that high. When I searched online, I just found a gigantic range of what people say is "normal". I guess geographic location might also play a big part in the costs.

The Architect

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Re: Am I missing something? Health Insurance Questions.
« Reply #8 on: November 07, 2014, 01:37:01 PM »
Look into the hospital's financial assistance and payment options. Most of the time, applying will qualify you for some kind of benefit; and paying cash up front often gives a significant discount. We've had our children for less than $5,000 cash each.

MDM

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Re: Am I missing something? Health Insurance Questions.
« Reply #9 on: November 07, 2014, 04:00:30 PM »
HSA 1:
8000 max

HSA 2:
5000 max

PPO:
10000 max

HSA 1: 4000+(10000-4000)*.2+1956-1500= $5656
HSA 2: 3000+(10000-3000)*.1+4803-1000= $7503
PPO:    1400+(10000-1400)*.1+5838=           $8098


One thing you should understand (you might already but it's not obvious in the OP) is what "max" means for your plan.

E.g., see http://healthinsurance.about.com/od/healthinsurancebasics/a/Out-of-pocket-Maximum-how-It-Works-And-Why-To-Beware.htm, https://www.healthcare.gov/glossary/out-of-pocket-maximum-limit/, etc.

Similar to what kendallf said, you could put something similar to the following into Excel, then adjust "Total_charges" to see where your breakpoints are.
HSA 1 =MAX(4000+(Total_charges - 4000)*.2, 8000) + 1956-1500
HSA 2 =MAX(3000+(Total_charges - 3000)*.1, 5000) + 4803-1000
PPO    =MAX(1400+(Total_charges - 1400)*.1, 10000) + 5838