Author Topic: Choosing between 2 health insurance options - what am I missing?  (Read 1918 times)

partialexponent

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Choosing between 2 health insurance options - what am I missing?
« on: September 10, 2019, 06:03:21 AM »
We are choosing between 2 health insurance options offered through my spouse's employer, standard copay-driven plan vs. HDHP + HSA plan. Conventional wisdom seems to be that a standard plan should beat the HDHP option, which is reflected in the price difference between the plans, and is what we've gone with in the past.

However, digging into the numbers more, I'm having a hard time seeing any scenarios where the standard plan wins financially, as long as we stay in-network. Even considering traditionally-expensive situations such as maternity care & childbirth, it looks to me like the HDHP comes out ahead.

Standard plan:
$3300 premiums / yr
$0 deductible
No employer HSA contribution
$2000 out of pocket max (in-network)
$15 copays (primary care or specialist, referrals not required)
$100 emergency room copay
100% coverage in-network after copays

HDHP + HSA:
$0 premiums / yr
$3000 deductible
$1500 employer HSA contribution
$10,000 out of pocket max (in-network)
no copays (full amount paid counts towards deductible)
100% coverage in-network after deductible
same prescription drug copays as standard plan after deductible

By my math, if we go w/ the HDHP, investing the $3300 saved premium plus the $1500 employer contribution gives us $4800 for services, which is already over the $3000 deductible and puts us into the fully-covered zone. Plus we could still contribute an additional $2200 to the HSA for tax savings. AND we save on the copays we'd be paying under the standard plan.

What am I missing here? Total cost (including employer subsidy) of the standard plan is ~$27k / yr, vs ~$21k / yr for the HDHP. Why does the standard plan cost so much more? Also, what's the significance of the $10,000 out of pocket max if services are covered at 100% after deductible? Is that just for tons of prescription medications? (of which we have none atm)

Any insights greatly appreciated!
« Last Edit: September 10, 2019, 10:56:44 AM by partialexponent »

big_owl

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Re: Choosing between 2 health insurance options - what am I missing?
« Reply #1 on: September 10, 2019, 09:24:03 AM »
Errrr, isn't the out of pocket max difference rather significant?  I have a stupid HSA plan and due to health issues the past 3 years I've reached my out of pocket max all three years and whatever money I had in my HSA has been blown away.  Your standard plan would have been much cheaper for me for the past three years.  $10k OOP is pretty high if you end up needing it (I would have used up your $10k each year - for $30k of OOP expenses - but luckily my OOP max is only $5k).

Of course the HSA is cheaper as long as you don't have significant health problems, that's the gamble.

ETA - I don't understand the 100% coverage after deductible either, but you can bet the HSA isn't actually cheaper there.  Better ask HR.
« Last Edit: September 10, 2019, 10:03:58 AM by big_owl »

minimustache1985

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Re: Choosing between 2 health insurance options - what am I missing?
« Reply #2 on: September 10, 2019, 09:53:30 AM »
Iím similarly confused about the 100% coverage after the deductible- if thatís the case then the deductible would essentially be the OOP max, usually there is a coinsurance for the period between.

If there is no coinsurance or practical way to get to the 10k OOP then the high deductible plan is a home run, if there is then it depends on your families medical needs.

Richie Poor

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Re: Choosing between 2 health insurance options - what am I missing?
« Reply #3 on: September 10, 2019, 10:21:22 AM »
I'm guessing since the 100% coverage after deductible only applies to "in-network" providers you could still hit your max by using out of network providers.


partialexponent

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Re: Choosing between 2 health insurance options - what am I missing?
« Reply #4 on: September 10, 2019, 10:55:12 AM »
I'm guessing since the 100% coverage after deductible only applies to "in-network" providers you could still hit your max by using out of network providers.
This is what I thought at first but actually out-of-network stuff comes with a different (higher) set of numbers, so these are in-network only.

All of the services are listed as 100% covered after deductible with no coinsurance, except for prescription drugs. Prescription drugs are full price (I assume) until the deductible is met, then charged at the same rates ($25/$50) as the standard plan offers.

So I'm guessing the difference is in paying for prescription drugs? $7000 seems like a LOT of prescription drugs at $50 a pop though.
« Last Edit: September 10, 2019, 10:57:11 AM by partialexponent »

Sibley

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Re: Choosing between 2 health insurance options - what am I missing?
« Reply #5 on: September 10, 2019, 12:02:25 PM »
I'd be willing to bet the 100% coverage after deductible on the HDHP has a decent chance of being an error. I'd confirm. 80% would be more expected, up to your OOP Max, then 100%.

And depending on the prescription, it's far more than $50. My mom was on one that was $500 a month for a while.

partialexponent

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Re: Choosing between 2 health insurance options - what am I missing?
« Reply #6 on: September 10, 2019, 01:00:46 PM »
I'd be willing to bet the 100% coverage after deductible on the HDHP has a decent chance of being an error. I'd confirm. 80% would be more expected, up to your OOP Max, then 100%.

And depending on the prescription, it's far more than $50. My mom was on one that was $500 a month for a while.
It's not an error, as it's listed like that on both the insurer-provided plan summary of benefits as well as the benefits selection guide from HR. The standard plan also offers 100% coverage, after copays. In contrast, out-of-network forbboth plansis listed at 70% after deductible/copays. It's unusually good insurance, for sure.

The prescription drug plan is $10 copay for retail generic, $25 for "preferred" brand name, $50 for "unpreferred" brand name. Mail order 90-day supply copays are $20/$50/$100 respectively.

Thanks for all the replies! I still don't fully understand it, but it's really good to have more eyes on it and know that I'm (probably) not missing something obvious.

merince

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Re: Choosing between 2 health insurance options - what am I missing?
« Reply #7 on: September 12, 2019, 08:42:05 AM »
I think you should add your out-of-pocket max into your calculations. I think the HDHP covers less so that the services that are not covered come out of the out of pocket max. Meaning, the insurance will negotiate some cost on those, but you'll have to pay for the entire cost.

Blue Skies

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Re: Choosing between 2 health insurance options - what am I missing?
« Reply #8 on: January 24, 2020, 10:12:46 AM »
$50 for "unpreferred" brand name -- as long as it is covered.

We have run into this several times where we have to pay the full amount for prescriptions because for whatever reason our insurance (with similar prescription tiering as yours) does not cover the medication at all.

I'm guessing that hiding in the pages and pages of plan description are differences in coverage between the two health plans.  You would reach the OOP max if you use medical services which are not covered by your plan at all.

wellactually

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Re: Choosing between 2 health insurance options - what am I missing?
« Reply #9 on: January 24, 2020, 10:37:45 AM »
In my experience, medical services not covered by the plan in my HDHP also do not contribute to my OOP max. I spent ~$24,000 on medical expenses last year. About $3100 was covered under my plan. I paid the $2750 OOP toward deductible and then coinsurance on the remaining $350. But when looking at the OOP max status, only the $3100 was listed, not any of the remaining medical costs. Of course I still could use HSA money on the non-covered expenses (and my husband's HSA and our savings lol)

I'm not sure if that was just because insurance treats infertility treatment like the plague or if that's how they treat all uncovered medical expenses.

OP, I'd reach out specifically to HR and ask them to explain it to you like your 5: in what situation would you continue paying toward the OOP max after you've hit the deductible. This is written very strangely in your plan.

The only other thing I can think of which you might consider is if the networks are substantially different.

Righty

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Re: Choosing between 2 health insurance options - what am I missing?
« Reply #10 on: January 24, 2020, 10:44:05 AM »
I'd be willing to bet the 100% coverage after deductible on the HDHP has a decent chance of being an error. I'd confirm. 80% would be more expected, up to your OOP Max, then 100%.

And depending on the prescription, it's far more than $50. My mom was on one that was $500 a month for a while.
It's not an error, as it's listed like that on both the insurer-provided plan summary of benefits as well as the benefits selection guide from HR.

I'd still be willing to bet it's a mistake on the insurer plan summary (which your HR group then just copied)

DaMa

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Re: Choosing between 2 health insurance options - what am I missing?
« Reply #11 on: February 03, 2020, 07:21:40 AM »
I reviewed plan options for a friend that looked like this.  Her HDHP also had a 100% coverage after deductible.  I went over the plan documents carefully, because I was very suspicious.   This is the first time I'd seen a HDHP plan that good. 

The only thing that went past the deductible was the pharmacy claims.  She had a $5 generic, $10 preferred brand, $25 non-preferred, and 20% specialty plan.  It was that 20% specialty coinsurance that made the $10,000 OOP Max important.  If you use these drugs hitting $10k in spend would be easy.

She went with the HDHP.  If specialty drugs became an issue, she could switch back to the other plan for the next year, so the possible risk was limited to one year.  It took less than 2 years to save the at risk amount.  (I'm not sure I explained that well.)


partialexponent

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Re: Choosing between 2 health insurance options - what am I missing?
« Reply #12 on: February 28, 2020, 12:36:43 PM »
I reviewed plan options for a friend that looked like this.  Her HDHP also had a 100% coverage after deductible.  I went over the plan documents carefully, because I was very suspicious.   This is the first time I'd seen a HDHP plan that good. 

The only thing that went past the deductible was the pharmacy claims.  She had a $5 generic, $10 preferred brand, $25 non-preferred, and 20% specialty plan.  It was that 20% specialty coinsurance that made the $10,000 OOP Max important.  If you use these drugs hitting $10k in spend would be easy.

She went with the HDHP.  If specialty drugs became an issue, she could switch back to the other plan for the next year, so the possible risk was limited to one year.  It took less than 2 years to save the at risk amount.  (I'm not sure I explained that well.)
Thank you, this is very helpful. We are planning to do the same and switch to the HDHP at the next opportunity.