Author Topic: Baby delivery insurance plan selection - case study  (Read 5913 times)

Alenzia

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Baby delivery insurance plan selection - case study
« on: August 29, 2016, 03:13:22 PM »
I'm pregnant with my first baby (yay!) and am due at the end of March of 2017. My company's open enrollment for insurance is coming up and I'm trying to get a handle on what the best course of action would be - right now I'm on a $2500 deductible plan, but I'm not sure if that will be the best option. My company offers 4 plans with Cigna - 2 high deductible with HSA and 2 regular plans. My husband's company offers great insurance for him, but any additional family members are very expensive to add so I'm not considering that option yet.

Of course I understand that it's hard to predict what the delivery will cost, since there's no way to know in advance if there'll be an emergency. So I decided to go about the comparison based on total medical bills for 2017 (prenatal/postnatal care, delivery, baby dr visits) to what I'd pay out of pocket for the year (premiums + out of pocket expenses like copays and coinsurance). I attached a comparison graph for the plans.

So here are a few questions for those of you who are more experienced with the topic:

- Am I generally correct in assuming that it would be HIGHLY unlikely for the total bills for the year (to the insurance or us) to be <$5k? This assumes 3 months of prenatal care, delivery in a hospital, and post-natal and baby dr visits. What would you put in as your estimated range?

- Would people be willing to share how many Dr. visits their kiddo had to have in their 1st year and then the 2nd year of life? Right now the more expensive plans look better for the year that I deliver, but if it's practical, I'd like to go back to a high deductible plan for 2018.

- What am I missing? This is a more general question because I'm still so new to this and it's taking a significant chunk of effort to figure this out.

Thank you for reading this very long post and giving a newbie some advice!
« Last Edit: August 29, 2016, 03:19:59 PM by Alenzia »

SKL-HOU

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Re: Baby delivery insurance plan selection - case study
« Reply #1 on: August 29, 2016, 03:26:27 PM »
You are correct in assuming it would be more than 5k.
I can't tell you how many visits in the 1st/2nd years as my son was born at 5.5 months so had a 3.5 month NICU stay (500k) and bunch of doctor visits after. I would highly recommend going with the more inclusive option even if it costs a little more.

Dezrah

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Re: Baby delivery insurance plan selection - case study
« Reply #2 on: August 29, 2016, 03:34:43 PM »
Following for my own edification.

Is it worth factoring in HSA accounts?  Paying to your HSA directly through paycheck deductions will reduce both your income taxes and SS+Medicare taxes.  Is it worth it (for the OP or any couple) to fund the HSA and then "reimburse yourself" 20 years later after the balance has tripled in value and is now tax free?  Or are the long term benefits of HSAs overstated when compared to the additional OOP costs now?

Sorry I'm not much help.

Alenzia

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Re: Baby delivery insurance plan selection - case study
« Reply #3 on: August 29, 2016, 03:38:43 PM »
Following for my own edification.

Is it worth factoring in HSA accounts?  Paying to your HSA directly through paycheck deductions will reduce both your income taxes and SS+Medicare taxes.  Is it worth it (for the OP or any couple) to fund the HSA and then "reimburse yourself" 20 years later after the balance has tripled in value and is now tax free?  Or are the long term benefits of HSAs overstated when compared to the additional OOP costs now?

Sorry I'm not much help.

I got lucky and started funding my HSA a few years back while we were DINKs. Out of curiosity I ran the numbers on what the cost of insurance would have been otherwise - doing the high deductible + HSA has been absolutely worth it while I've been healthy with no kids, I've been able to continue growing it the whole time.

Dezrah

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Re: Baby delivery insurance plan selection - case study
« Reply #4 on: August 29, 2016, 04:10:12 PM »
Following for my own edification.

Is it worth factoring in HSA accounts?  Paying to your HSA directly through paycheck deductions will reduce both your income taxes and SS+Medicare taxes.  Is it worth it (for the OP or any couple) to fund the HSA and then "reimburse yourself" 20 years later after the balance has tripled in value and is now tax free?  Or are the long term benefits of HSAs overstated when compared to the additional OOP costs now?

Sorry I'm not much help.

I got lucky and started funding my HSA a few years back while we were DINKs. Out of curiosity I ran the numbers on what the cost of insurance would have been otherwise - doing the high deductible + HSA has been absolutely worth it while I've been healthy with no kids, I've been able to continue growing it the whole time.

That's awesome.  Good for you guys being such diligent savers.

I may have answered my own question, though I'm curious what others think:

Your numbers seem to indicate that even with your worst case scenario, the HDHP only costs an additional $2k OOP.  And if I understand correctly, one of those other lines is an HSA eligible plan as well?

If you were to max out your HSA through payroll, you would save ~15% income tax (or whatever your real marginal number is, I'm just guessing) + 7.625% SS+Medicare tax or about $1,528.88 in tax savings immediately.  Furthermore, over a 20-year span, we can estimate the $6750 HSA to average 5% real growth which will be worth ~$18k in the future.  If you invest your "tax savings" that amount increases even further.

By contrast, "saving" $2k in OOP costs now will only grow to $5,306 in the same investments over the same time, and then you will still owe taxes.

Honestly it seems clear to me that the HDHP will still be the best "long term choice" if all the following apply:
-You are already maxing out your other tax-advantaged accounts and are prepared to fully fund the HSA.
-You are financially and mentally prepared to write a large check now to save later.
-You are disciplined savers and investors and swear not to touch that money until the time is right.

historienne

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Re: Baby delivery insurance plan selection - case study
« Reply #5 on: August 29, 2016, 04:51:46 PM »
Delivery costs could be as low as $10,000 for an unmedicated birth in a cheap hospital using midwives, or $100k or more if you have a complicated birth and a NICU stay.

historienne

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Re: Baby delivery insurance plan selection - case study
« Reply #6 on: August 29, 2016, 04:55:07 PM »
Delivery costs could be as low as $10,000 for an unmedicated birth in a cheap hospital using midwives, or $100k or more if you have a complicated birth and a NICU stay.

Just looked at your chart - yeah, you are in the wrong order of magnitude.

Most of the prenatal care should be free, though, if you have an ACA-compliant plan and an uncomplicated pregnancy,

SKL-HOU

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Re: Baby delivery insurance plan selection - case study
« Reply #7 on: August 29, 2016, 05:35:11 PM »
Delivery costs could be as low as $10,000 for an unmedicated birth in a cheap hospital using midwives, or $100k or more if you have a complicated birth and a NICU stay.

Just looked at your chart - yeah, you are in the wrong order of magnitude.

Most of the prenatal care should be free, though, if you have an ACA-compliant plan and an uncomplicated pregnancy,

Not sure about birthing costs but my son's NICU stay was 500k so 100k can easily happen for a shorter stay.

MayDay

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Re: Baby delivery insurance plan selection - case study
« Reply #8 on: August 29, 2016, 09:49:00 PM »
The baby will have lots of free well visits and immunizations are free on our hdhp.

The average kid might have 5 sick office visits on the high end. Zero is certainly possible. Over five sick visit usually means you've got something chronic going on, you'll know by fall if that's a problem.

Mongoose

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Re: Baby delivery insurance plan selection - case study
« Reply #9 on: August 29, 2016, 10:12:43 PM »
I had a simple uncomplicated birth with my second and it was 13k using a certified nurse midwife. And we didn't even stay the night. The 3k on your low end was on the low side for a home birth attended by a midwife (a somewhat common occurrence where we were living).

Our first went only to well baby checkups until around a year old. Then she got sick and was at emergency room for several visits and ended up with a celiac diagnosis. That would have been an expensive year but we had health insurance that was a premium plan (same year #2 was born).

Second had the routine well baby visits plus 3 emergency room trips (broken collarbone missed during post-birth exam, cut head when he fell and needed stitches, severe flu bout).

After 2 years old, neither have really needed anything except routine checkups.

Most of this was before or at the beginning of the ACA.

meerkat

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Re: Baby delivery insurance plan selection - case study
« Reply #10 on: August 30, 2016, 06:13:01 AM »
- Am I generally correct in assuming that it would be HIGHLY unlikely for the total bills for the year (to the insurance or us) to be <$5k? This assumes 3 months of prenatal care, delivery in a hospital, and post-natal and baby dr visits. What would you put in as your estimated range?

I was able to prepay for my birth and I want to say it was something like $6k for a natural hospital birth. I ended up getting an epidural so we paid more later, but my hospital gave a discount for paying early and in full so between that and using HSA money I think I saved most of a grand. If you already know what hospital you're delivering at you may be able to reach out to their finance office and ask them what the estimated costs would be.

- Would people be willing to share how many Dr. visits their kiddo had to have in their 1st year and then the 2nd year of life? Right now the more expensive plans look better for the year that I deliver, but if it's practical, I'd like to go back to a high deductible plan for 2018.

Mine is 14 months old but the first year was chock full of doctor visits and two PICU stays, one at six months old and one at nine months old. In addition to his well visits, the weeks before the first PICU stay had multiple sick visits to the pediatrician for back to back colds that I think had fevers and it eventually turned into RSV (a nasty respiratory virus) which compromised his breathing enough that we went to the ER the Wednesday before Christmas and spent the whole of our Christmas break (and baby's first Christmas) in the PICU. It was actually helpful for us that it happened over Christmas break because I hadn't accumulated any sick time back yet and my husband didn't have a lot either. I think after he came out of the hospital the doctor wanted to see him a few days later for a follow up to be sure he was improving they way they wanted to see, so it still counted as a sick visit even though he was recovering. At that time the hospital gave a discount for paying in full in one payment.

Then after that excitement in the spring it seemed like he had monthly ear infections. In March there was another, shorter PICU stay for respiratory issues (his lungs were still compromised by the RSV and had not fully recovered so every cold hit him extra hard). By this point the hospital had changed policies so we no longer received a discount for paying in full all at once. After that visit he got put on a daily inhaler medication and so far (knock on wood) he's been a lot healthier. The weather also warmed up so we're out of cold and flu season.

From what I've heard from other parents, the first winter sucks. Ours was especially sucky and not normal for baby's first winter. Since your baby will be born in March hopefully that will work to your advantage since he or she will be a little older.

nobody123

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Re: Baby delivery insurance plan selection - case study
« Reply #11 on: August 30, 2016, 08:09:32 AM »
Is there any employer HSA matching with the HD plans?  Are you able to do the max contribution to the HSA to save on the taxes?

Also, there should be some maximim out of pocket number even with the HD plan, so you can use that as a reality check for the worst case scenario.  Obamacare mandates a bunch of well-check stuff for babies, and with insurance you'll get the negotiated rate for any sick visits, so I wouldn't worry too much about those.

Remember, the birth of a child is a qualifying event so if it turns out baby needs hardcore medical help just after birth, just add baby to your husband's plan for the awesome coverage.

Gin1984

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Re: Baby delivery insurance plan selection - case study
« Reply #12 on: August 30, 2016, 08:16:54 AM »
One thing to remember is that emergencies happen.  My daughter had croup in her first year of life and could not breathe one night.  We were at the ER that night.  I have no idea how much that would have cost.  I would assume that your first two years (birth and first year of life) that you will hit the OOP max.  For us given the OOP max for the "better" insurance was $4000 but we could only put aside $2500 to the FSA but my HSA plan was $5000 and the HSA plan was $2500 cheaper, unless we were straight in the middle, the HSA ended up cheaper with huge or small expenses. 

onlykelsey

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Re: Baby delivery insurance plan selection - case study
« Reply #13 on: August 30, 2016, 08:20:15 AM »
Mostly following for my own edification, as well.  I'm due January 1, which makes insurance selection interesting...

seattlecyclone

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Re: Baby delivery insurance plan selection - case study
« Reply #14 on: August 30, 2016, 08:43:50 AM »
Mostly following for my own edification, as well.  I'm due January 1, which makes insurance selection interesting...

Yes, this does make things interesting. Our baby was due the first week of January but ended up joining us in December. I made a post about the financial/insurance aspects of that situation here. There's a post most of the way down with the cost details, but in a nutshell we had an uncomplicated hospital birth with no epidural, total price (insurance negotiated rate) was $14,570. We only had to pay $588 of that, since we had used all but about $500 of my wife's deductible beforehand and because the double insurance covered most of the rest of it. I'm still not sure exactly how the math worked out on that, but I won't complain.

SKL-HOU

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Re: Baby delivery insurance plan selection - case study
« Reply #15 on: August 30, 2016, 08:58:17 AM »
Mostly following for my own edification, as well.  I'm due January 1, which makes insurance selection interesting...
:) As the mother of a January 1 baby ....
My due date was April 13 but ended up in the hospital a few days before new years. I think I was admitted on December 28th. So I ended up paying deductible for 2011 (which was partially already met via doctor visits etc), deductible for me for 2012 (I think this wasn't even the full amount) and deductible for my son for 2012. He was born at 2:04 am :)

mm1970

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Re: Baby delivery insurance plan selection - case study
« Reply #16 on: August 30, 2016, 11:44:54 AM »
I would recommend that you call the hospital where you plan to deliver and ask for an estimate of the bill. It will vary based on location.

Baby #1: Born 2006.  Total cost: $8400 (half hospital, half doctor/ pre-natal care).  Plus $20 copay times...20 visits?  (that's an estimate).  My deductible was $350 per person (so $700 because me+baby).  Total out of pocket: $1100 ($700 + $400)

Birth info: 2 nights in hospital, vaginal birth with epidural

Baby #2: Born 2012.  Total cost: $14,000 (don't remember the breakdown).  No co-pays, was double covered.  My OOP cost was zero because of this. 

Birth info: showed up at 7:30, baby born at 8:30 am.  Sadly, no time for epidural.  One night in hospital.  Wow, costs went up in those 6 years, right??

Second baby born with hypospadias.  Required surgery (outpatient) at 9 months at an out of town hospital.  That cost was $20k between hospital and doctor costs.  (Again, out of pocket was zero due to double coverage).

So, our double coverage:
Primary: my plan at work, HMO.  In my experience, if you are a regular user of insurance, this is worth the money.  We are generally very healthy, but annual visits x4, immunizations, mammogram, urgent care for illnesses a couple of times per year, injury (sprained knees, ankles, back), PT (my  husband and I are getting old!)...means the HMO is a better deal for us.  I cover me and the kids.

Secondary: husband's plan is HDHP with HSA.  His company funds the majority of the HSA, but he does chip in too.  His covers the whole family, as it's no increased cost.

At this point, it would probably be cheaper to drop my plan completely or switch to HDHP. Usually I run the numbers every couple of years.  For sure, childbirth + surgery meant being double covered was a winner.

La Bibliotecaria Feroz

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Re: Baby delivery insurance plan selection - case study
« Reply #17 on: August 30, 2016, 02:40:09 PM »
One question to ask is if you can switch plans after baby is born. Some employers allow it, some don't. I stepped up to a more comprehensive plan when I was pregnant, then once I was safely delivered of a healthy infant, I stepped back down. Had baby head health issues, I would have kept the higher plan.

It was really, really nice to be able to ask for an unplanned epidural and not wonder what it would cost me. (Anesthesia EOB showed a charge of $16,000, but it didn't  break down epidural vs.  the extra meds for my section.)

Dezrah

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Re: Baby delivery insurance plan selection - case study
« Reply #18 on: August 30, 2016, 04:14:59 PM »
So, our double coverage:
Primary: my plan at work, HMO.  In my experience, if you are a regular user of insurance, this is worth the money.  We are generally very healthy, but annual visits x4, immunizations, mammogram, urgent care for illnesses a couple of times per year, injury (sprained knees, ankles, back), PT (my  husband and I are getting old!)...means the HMO is a better deal for us.  I cover me and the kids.

Secondary: husband's plan is HDHP with HSA.  His company funds the majority of the HSA, but he does chip in too.  His covers the whole family, as it's no increased cost.

You're not supposed to fund an HSA if you also have non-HDHP insurance.  This is against the tax laws and you might be facing penalties if you've been funding this.  You haven't been caught yet, but an audit might get you in trouble.  If I were you, I would stop funding the HSA now and talk to a tax attorney to figure out how to clean up the situation so you have nothing to fear from the IRS.

abhe8

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Re: Baby delivery insurance plan selection - case study
« Reply #19 on: August 30, 2016, 06:26:32 PM »
Right. You can find a single hsa for just your husband. But not a family if you and kids are on a non hdhp insurance.

hollyluja

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Re: Baby delivery insurance plan selection - case study
« Reply #20 on: August 31, 2016, 01:56:37 PM »
Another thing to keep in mind is often times a HDHP will have deductible =out of pocket  max.  Meaning you will pay more up front, but then you pay nothing the rest of the year.  I find that immensely reassuring for my planning.

  Also if you're a MMM reader, you've probably run out of places to tax-shelter your income and it's hard to find a better one than an HSA

mm1970

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Re: Baby delivery insurance plan selection - case study
« Reply #21 on: September 01, 2016, 12:55:27 PM »
So, our double coverage:
Primary: my plan at work, HMO.  In my experience, if you are a regular user of insurance, this is worth the money.  We are generally very healthy, but annual visits x4, immunizations, mammogram, urgent care for illnesses a couple of times per year, injury (sprained knees, ankles, back), PT (my  husband and I are getting old!)...means the HMO is a better deal for us.  I cover me and the kids.

Secondary: husband's plan is HDHP with HSA.  His company funds the majority of the HSA, but he does chip in too.  His covers the whole family, as it's no increased cost.

You're not supposed to fund an HSA if you also have non-HDHP insurance.  This is against the tax laws and you might be facing penalties if you've been funding this.  You haven't been caught yet, but an audit might get you in trouble.  If I were you, I would stop funding the HSA now and talk to a tax attorney to figure out how to clean up the situation so you have nothing to fear from the IRS.
This is very good info, which (obviously) I didn't know.  For years we were simply on my husband's plan.  I only added myself and the kids 4 years ago when pregnant.  I'm relatively confident that it's not a huge tax issue (will just have to dig up the numbers). The vast majority of use of the HSA has been dental/ vision, which are acceptable.

Of course we will have to clean it up though. Messy.

mm1970

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Re: Baby delivery insurance plan selection - case study
« Reply #22 on: September 01, 2016, 01:16:42 PM »
Another thing to keep in mind is often times a HDHP will have deductible =out of pocket  max.  Meaning you will pay more up front, but then you pay nothing the rest of the year.  I find that immensely reassuring for my planning.

  Also if you're a MMM reader, you've probably run out of places to tax-shelter your income and it's hard to find a better one than an HSA
We get hit with AMT every year!  And I don't cap out on SS either.

Dezrah

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Re: Baby delivery insurance plan selection - case study
« Reply #23 on: September 01, 2016, 01:24:25 PM »
So, our double coverage:
Primary: my plan at work, HMO.  In my experience, if you are a regular user of insurance, this is worth the money.  We are generally very healthy, but annual visits x4, immunizations, mammogram, urgent care for illnesses a couple of times per year, injury (sprained knees, ankles, back), PT (my  husband and I are getting old!)...means the HMO is a better deal for us.  I cover me and the kids.

Secondary: husband's plan is HDHP with HSA.  His company funds the majority of the HSA, but he does chip in too.  His covers the whole family, as it's no increased cost.

You're not supposed to fund an HSA if you also have non-HDHP insurance.  This is against the tax laws and you might be facing penalties if you've been funding this.  You haven't been caught yet, but an audit might get you in trouble.  If I were you, I would stop funding the HSA now and talk to a tax attorney to figure out how to clean up the situation so you have nothing to fear from the IRS.
This is very good info, which (obviously) I didn't know.  For years we were simply on my husband's plan.  I only added myself and the kids 4 years ago when pregnant.  I'm relatively confident that it's not a huge tax issue (will just have to dig up the numbers). The vast majority of use of the HSA has been dental/ vision, which are acceptable.

Of course we will have to clean it up though. Messy.

Just to clarify, these rules only apply to funding an HSA, not using it. Any money added to the HSA while the HDHP was your only plan is kosher, even if you USE it while under an HMO plan years later.

mm1970

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Re: Baby delivery insurance plan selection - case study
« Reply #24 on: September 01, 2016, 01:38:45 PM »
So, our double coverage:
Primary: my plan at work, HMO.  In my experience, if you are a regular user of insurance, this is worth the money.  We are generally very healthy, but annual visits x4, immunizations, mammogram, urgent care for illnesses a couple of times per year, injury (sprained knees, ankles, back), PT (my  husband and I are getting old!)...means the HMO is a better deal for us.  I cover me and the kids.

Secondary: husband's plan is HDHP with HSA.  His company funds the majority of the HSA, but he does chip in too.  His covers the whole family, as it's no increased cost.

You're not supposed to fund an HSA if you also have non-HDHP insurance.  This is against the tax laws and you might be facing penalties if you've been funding this.  You haven't been caught yet, but an audit might get you in trouble.  If I were you, I would stop funding the HSA now and talk to a tax attorney to figure out how to clean up the situation so you have nothing to fear from the IRS.
This is very good info, which (obviously) I didn't know.  For years we were simply on my husband's plan.  I only added myself and the kids 4 years ago when pregnant.  I'm relatively confident that it's not a huge tax issue (will just have to dig up the numbers). The vast majority of use of the HSA has been dental/ vision, which are acceptable.

Of course we will have to clean it up though. Messy.

Just to clarify, these rules only apply to funding an HSA, not using it. Any money added to the HSA while the HDHP was your only plan is kosher, even if you USE it while under an HMO plan years later.
Okay, now I'm confused.  (I know my husband said he looked into it at the time, but...)

So, because he's funding his own HSA and he's not covered by my insurance, it's okay for him to fund it?

But the using it part...using it for my kids or me...that's not okay?  Or it is okay? 

Really I think the tricky thing is maybe the dual coverage?  Example: the surgery  my son had.  Honestly, the OOP cost for the surgery was $125 because it was outpatient. Meaning: my HMO insurance covered all but $125.  I don't think his insurance covered anything.  But we used the HSA to pay the $125.  So there are a few layers - the two insurances AND the HSA.  And they are clear as mud!

(Worse case we pay taxes on his payroll deductions for four years, and that may be just the easiest thing...)

charis

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Re: Baby delivery insurance plan selection - case study
« Reply #25 on: September 01, 2016, 02:09:03 PM »
So, our double coverage:
Primary: my plan at work, HMO.  In my experience, if you are a regular user of insurance, this is worth the money.  We are generally very healthy, but annual visits x4, immunizations, mammogram, urgent care for illnesses a couple of times per year, injury (sprained knees, ankles, back), PT (my  husband and I are getting old!)...means the HMO is a better deal for us.  I cover me and the kids.

Secondary: husband's plan is HDHP with HSA.  His company funds the majority of the HSA, but he does chip in too.  His covers the whole family, as it's no increased cost.

You're not supposed to fund an HSA if you also have non-HDHP insurance.  This is against the tax laws and you might be facing penalties if you've been funding this.  You haven't been caught yet, but an audit might get you in trouble.  If I were you, I would stop funding the HSA now and talk to a tax attorney to figure out how to clean up the situation so you have nothing to fear from the IRS.
This is very good info, which (obviously) I didn't know.  For years we were simply on my husband's plan.  I only added myself and the kids 4 years ago when pregnant.  I'm relatively confident that it's not a huge tax issue (will just have to dig up the numbers). The vast majority of use of the HSA has been dental/ vision, which are acceptable.

Of course we will have to clean it up though. Messy.

The issue isn't how you are using the funds (as long as it's a qualified expense), the question is whether you are eligible to fund the HSA.    But I am missing the problem here.  If husband is on a separate HDHP, he should be able to fund a single-person HSA, and he can use those funds for out of pocket medical costs incurred by his spouse and dependents, even if they are on a different HMO, correct?

But to the point about the HMO being a better deal, you may want to look at that more closely.  Preventative annual visits, immunizations, and mammograms are fully covered by HDHPs.    Plus urgent care visits, PT, and injuries could get you to your deductible pretty quickly, and taken with the tax advantages of a family HSA,  plan contributions (half of our deductible is covered by these), and low premiums, HDHP usually come out ahead when you have higher medical costs.

raspberries

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Re: Baby delivery insurance plan selection - case study
« Reply #26 on: September 01, 2016, 02:33:11 PM »
Quote
Am I generally correct in assuming that it would be HIGHLY unlikely for the total bills for the year (to the insurance or us) to be <$5k? This assumes 3 months of prenatal care, delivery in a hospital, and post-natal and baby dr visits. What would you put in as your estimated range?

Yes. You can check with your insurance/the hospital you'll be delivering at, but the delivery itself will probably be $8k+ for even the most uncomplicated birth.

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Would people be willing to share how many Dr. visits their kiddo had to have in their 1st year and then the 2nd year of life? Right now the more expensive plans look better for the year that I deliver, but if it's practical, I'd like to go back to a high deductible plan for 2018.

I think this partially depends on what your childcare plans are - if your kid will be in daycare, prepare for lots of germ spreading. My LO had conjunctivitis a few times, ear infections, etc. that required trips to the doctor's office and prescriptions, in addition to a number of colds that didn't. I'd say budget for AT LEAST 5 doctor trips during the first year of life if daycare is involved.

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What am I missing? This is a more general question because I'm still so new to this and it's taking a significant chunk of effort to figure this out.

I guess my only advice would be to make sure you go by the numbers and don't get tricked into a higher monthly payment just for ease-of-mind. My insurance options are an HMO and a high deductible - it makes way more sense to do the high deductible with a low monthly payment, but I'm always almost suckered into the HMO because it sounds so nice to just always have that $10 copay.

mm1970

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Re: Baby delivery insurance plan selection - case study
« Reply #27 on: September 01, 2016, 02:39:20 PM »
So, our double coverage:
Primary: my plan at work, HMO.  In my experience, if you are a regular user of insurance, this is worth the money.  We are generally very healthy, but annual visits x4, immunizations, mammogram, urgent care for illnesses a couple of times per year, injury (sprained knees, ankles, back), PT (my  husband and I are getting old!)...means the HMO is a better deal for us.  I cover me and the kids.

Secondary: husband's plan is HDHP with HSA.  His company funds the majority of the HSA, but he does chip in too.  His covers the whole family, as it's no increased cost.

You're not supposed to fund an HSA if you also have non-HDHP insurance.  This is against the tax laws and you might be facing penalties if you've been funding this.  You haven't been caught yet, but an audit might get you in trouble.  If I were you, I would stop funding the HSA now and talk to a tax attorney to figure out how to clean up the situation so you have nothing to fear from the IRS.
This is very good info, which (obviously) I didn't know.  For years we were simply on my husband's plan.  I only added myself and the kids 4 years ago when pregnant.  I'm relatively confident that it's not a huge tax issue (will just have to dig up the numbers). The vast majority of use of the HSA has been dental/ vision, which are acceptable.

Of course we will have to clean it up though. Messy.

The issue isn't how you are using the funds (as long as it's a qualified expense), the question is whether you are eligible to fund the HSA.    But I am missing the problem here.  If husband is on a separate HDHP, he should be able to fund a single-person HSA, and he can use those funds for out of pocket medical costs incurred by his spouse and dependents, even if they are on a different HMO, correct?

But to the point about the HMO being a better deal, you may want to look at that more closely.  Preventative annual visits, immunizations, and mammograms are fully covered by HDHPs.    Plus urgent care visits, PT, and injuries could get you to your deductible pretty quickly, and taken with the tax advantages of a family HSA,  plan contributions (half of our deductible is covered by these), and low premiums, HDHP usually come out ahead when you have higher medical costs.
Bolded part is the question, I suppose.

When I did the math on the HMO, it was a better deal.  Family deductible for the HDHP was higher than my  HMO premiums, by quite a bit.  I don't remember the numbers when I ran it last.  But it was on the order of several thousand deductible (which we would have easily hit the first two years).  HMO premiums are $1600/year this year, and were less back then when I ran the numbers.  It's probably getting close to being worth it to go back on the HDHP for everyone.

(We were on the HDHP for a few years.  HMO at my old company.  When I changed companies, we shifted to my husband's HDHP and I declined coverage at work.  Then our coverage got better and I added the HMO.  Overall, the first two years back on the HMO were financially more advantageous.)

charis

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Re: Baby delivery insurance plan selection - case study
« Reply #28 on: September 01, 2016, 02:49:38 PM »
When I did the math on the HMO, it was a better deal.  Family deductible for the HDHP was higher than my  HMO premiums, by quite a bit.  I don't remember the numbers when I ran it last.  But it was on the order of several thousand deductible (which we would have easily hit the first two years).  HMO premiums are $1600/year this year, and were less back then when I ran the numbers.  It's probably getting close to being worth it to go back on the HDHP for everyone.

Holy crow!  My HDHP (bi-weekly) premiums are $3400+/year and all the HMO options I have are close to triple that.   Sounds like you have a fantastic deal.

mm1970

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Re: Baby delivery insurance plan selection - case study
« Reply #29 on: September 01, 2016, 04:14:40 PM »
When I did the math on the HMO, it was a better deal.  Family deductible for the HDHP was higher than my  HMO premiums, by quite a bit.  I don't remember the numbers when I ran it last.  But it was on the order of several thousand deductible (which we would have easily hit the first two years).  HMO premiums are $1600/year this year, and were less back then when I ran the numbers.  It's probably getting close to being worth it to go back on the HDHP for everyone.

Holy crow!  My HDHP (bi-weekly) premiums are $3400+/year and all the HMO options I have are close to triple that.   Sounds like you have a fantastic deal.
Yes, my pay sucks, but our company covers a very large percentage of the HMO premiums.

muckety_muck

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Re: Baby delivery insurance plan selection - case study
« Reply #30 on: September 03, 2016, 03:16:29 AM »
I can't really offer a scientific/logic-based approach to this, since there is no predicting your baby's 1st or 2nd year (or complications with pregnancy/delivery/etc) in most cases...

What I can say is that for us, we had the cadillac plan for #1, nothing OOP at all besides the cost of payroll deduction for the insurance plan itself, for pregnancy & birth. Easy birth with midwives at a hospital. Typical 2-day stay for mother & baby. All preventative care visits were covered by our insurance in full (vaccinations, well baby check-ups every few months). We did not have any ER visits. Super cheap prescriptions, but only needed one for baby's first year. Not a deciding factor for us.

#2, we had the equivalent of a Honda Civic plan (HMO, standard coverage, about 30% less cost in monthly premiums than the Cadillac plan above) - $200 per admission to L&D (we only had the one, while in real labor), uncomplicated pregnancy, covered at $0 OOP for all Dr. Visits, ultrasounds, even the high-risk Dr. visits for a few issues. Free breastpump & milk bags every 90 days (thanks ACA!) Easy birth. Fully covered. Two-day stay, nobody was sick. All preventative care visits were covered by insurance in full, no ER visits. Probably 2 sick baby visits, had to pay $20 copay each time I think. Our insurance coverage is good, but not as good as it was with the cadillac plan above for #1, but luckily only needed antibiotics one time ($10) and some cream another time ($20 i think?)

Since it's hard to plan for the unknown, I would go with the coverage you feel most comfortable with. All totaled, each birth was easily $15k with dr. bills, hospital bills, anesthesiologist, etc. I would not have felt comfortable with HSA/HDHP only, in the event of some catastrophic event (heart defect discovered after birth, a long stay in the NICU, etc). And after the birth of the baby (or even during, as your mind is adding up the $$$$$ of each specialist that comes in your room) is NOT the time to worry about how you're going to pay for the birth of a child. It's a happy time... should be spent focused on baby and mom and dad as a family unit. Some things are worth paying slightly more for, (temporarily since you can always switch back to the HSA/HDHP after baby arrives) so that you can have peace of mind. Good luck!

Mikila

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Re: Baby delivery insurance plan selection - case study
« Reply #31 on: September 03, 2016, 04:56:04 PM »
Wow, these costs are insane! 

Complications of birth would quickly escalate costs.  Costs will also skyrocket if your baby is sickly. 

My anecdote:  child #1 was born in 2005 at home.  Birth was attended by a midwife, who had also done all my prenatal care, and baby was breastfed.  Baby didn't get sick beyond a sniffle the first year, so no extra doctor visits.  Insurance was Blue Cross, which we were paying $231/month for.  Birth cost $600 out of pocket, and just copays for the well-child visits.
Child #2 cost the same.  Same scenario except we were so broke we only had Medicaid.  We paid the $600 in advance to the midwife, and actually I needed stitches/ glue down there AND was bleeding heavily so my midwife quickly gave me a shot to stop the bleeding.  All was well.  $600 total.

Home births are budget friendly, and I would do it again in a heartbeat.  My midwife was very well prepared and had delivered over 600 babies, most at home.  That is only an option if the pregnancy is not high risk, though. 

Just some food for thought if you REALLY want to save.

abhe8

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Re: Baby delivery insurance plan selection - case study
« Reply #32 on: September 03, 2016, 06:27:42 PM »
I can't really offer a scientific/logic-based approach to this, since there is no predicting your baby's 1st or 2nd year (or complications with pregnancy/delivery/etc) in most cases...

What I can say is that for us, we had the cadillac plan for #1, nothing OOP at all besides the cost of payroll deduction for the insurance plan itself, for pregnancy & birth. Easy birth with midwives at a hospital. Typical 2-day stay for mother & baby. All preventative care visits were covered by our insurance in full (vaccinations, well baby check-ups every few months). We did not have any ER visits. Super cheap prescriptions, but only needed one for baby's first year. Not a deciding factor for us.

#2, we had the equivalent of a Honda Civic plan (HMO, standard coverage, about 30% less cost in monthly premiums than the Cadillac plan above) - $200 per admission to L&D (we only had the one, while in real labor), uncomplicated pregnancy, covered at $0 OOP for all Dr. Visits, ultrasounds, even the high-risk Dr. visits for a few issues. Free breastpump & milk bags every 90 days (thanks ACA!) Easy birth. Fully covered. Two-day stay, nobody was sick. All preventative care visits were covered by insurance in full, no ER visits. Probably 2 sick baby visits, had to pay $20 copay each time I think. Our insurance coverage is good, but not as good as it was with the cadillac plan above for #1, but luckily only needed antibiotics one time ($10) and some cream another time ($20 i think?)

Since it's hard to plan for the unknown, I would go with the coverage you feel most comfortable with. All totaled, each birth was easily $15k with dr. bills, hospital bills, anesthesiologist, etc. I would not have felt comfortable with HSA/HDHP only, in the event of some catastrophic event (heart defect discovered after birth, a long stay in the NICU, etc). And after the birth of the baby (or even during, as your mind is adding up the $$$$$ of each specialist that comes in your room) is NOT the time to worry about how you're going to pay for the birth of a child. It's a happy time... should be spent focused on baby and mom and dad as a family unit. Some things are worth paying slightly more for, (temporarily since you can always switch back to the HSA/HDHP after baby arrives) so that you can have peace of mind. Good luck!
Right, but my hdhp has an oop max and after that insurance pays 100℅, so worst case scenario, I'm covered. I just make sure to keep at least the oop max in my HSA, so I know it won't be a cash flow issue.

Fwiw... My last two babies were $3300 and $3000, home births with an awesome midwife.

Our kids do not go to daycare, but have never been sick requiring a dr or rx. Wcc are all covered fully by the hdhp. We spend relatively minimally on health care, but you can never predict the future.

Alenzia

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Re: Baby delivery insurance plan selection - case study
« Reply #33 on: September 06, 2016, 04:56:20 PM »
Thanks for the responses, everyone! One thing that I'm getting snagged on is the "if things go very wrong you want an HMO" scenario. I thought that if something goes wrong and the expenses go very high (over $100k), then all I should do to compare plans look at my premiums and out of pocket maximum for each plan, which will get me to what I'll actually pay if the expenses get crazy. When I did that accounting for the tax benefits of funding my HSA, I'm getting total max spend of a $1500 deductible plan to be the most optimal ($2376 premiums+$6000 out of pocket max-$2025 in tax savings=$5451 total spend). Am I missing something?

seattlecyclone

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Re: Baby delivery insurance plan selection - case study
« Reply #34 on: September 07, 2016, 01:34:28 AM »
Not necessarily. Everyone has different plan options available. With some employers an HMO is the best deal in years where you have lots of medical needs, with others the HDHP wins out even if you pay the out-of-pocket maximum. Figure out what the worst-case scenario is for each of your plan options, taking into account any tax savings from premiums/HSAs/FSAs/etc. Plan to pay that worst-case amount in a year where you have a baby, and be pleasantly surprised if you pay less.