Author Topic: Buy 1 Health plan for family of 4, or buy 4 separate plans?  (Read 1636 times)

NavalStache

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Buy 1 Health plan for family of 4, or buy 4 separate plans?
« on: September 19, 2014, 10:35:48 AM »
My question concerns buying health insurance.  I recently left a federal job and I am heading to private firm that has terrible health insurance (premiums for a family are laughably expensive).  As a result, I am in the process of buying private health insurance for my family.  As background, here are the relevant numbers (approximate) for the health insurance plans that I am considering:

Bronze Medal (HSA eligible) for Family:
Premium: $536 per month
Deductible: $11,900
Max Out-of-Pocket: $12,700

Bronze Medal (HSA eligible) for individual plans for each family member:
Premium: $536 total cost (4 individual plans ad up to $536)
Deductible: $5,950 per person
Max Out-of-Pocket: $6,350 per person

My question is whether it makes sense to buy individual plans rather than one plan for the entire family.  On one hand, for a family of four healthy people, I suspect that the greatest odds of reaching a deductible is that one family member has a medical emergency.  On the other hand, there is always a risk that multiple family members have medical emergencies in the same year (i.e., a car crash).  I lean towards thinking that buying individual plans makes the most sense.  (for further background on my personal finances, I have enough money saved to pay the $12,700 maximum or the worst case scenario of $25,600 should all four family members suffer a medical emergency in the same year). 

What say you Mustachians?

Proud Foot

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Re: Buy 1 Health plan for family of 4, or buy 4 separate plans?
« Reply #1 on: September 19, 2014, 01:27:46 PM »
Looking at what you are saying here I would personally go for the family plan as there is a lot less out of pocket risk. Even though you state you have enough saved for the worst case scenario that is an additional $12,700 you would not have to keep as liquid. Another thing I would look at is the rules for HSA contributions. If you have an HSA for each individual plan can you max out each one ($3,300 x 4) vs maxing out the HSA for the family plan (6,550). I don't know the answer to this question but it could make a difference in your choice.

forummm

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Re: Buy 1 Health plan for family of 4, or buy 4 separate plans?
« Reply #2 on: September 19, 2014, 06:28:18 PM »
It looks like there are 5 primary scenarios:
1) No individual has expenses over $5950 (we all hope for your family to stay healthy!)--doesn't matter which plan
2) One individual has expenses over $5950--family plan costs more
3) Two individuals have expenses over $5950--doesn't matter which plan
4) Three individuals have expenses over $5950--family plan costs less
5) Several individuals have expenses that add up to more than $12,700 cumulatively, but with less than $5950 per person--family plan costs less

There are some other cases, but this is essentially what you're looking at. It seems that it probably doesn't matter. The price signal from the insurance company is telling you that it probably is not financially very different either way. If one individual might get pregnant, then perhaps that person should get an individual policy.

What you might look into is getting a plan that includes pediatric dental--whether it's the family plan or the one that the kids are signed up for (assuming some of those family members are kids). Some plans include pediatric dental and some don't--and there isn't always any extra cost for that.