Author Topic: Moving to the USA - Overwhelmed with Medical Plan Options  (Read 4256 times)

Latito

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Moving to the USA - Overwhelmed with Medical Plan Options
« on: October 14, 2015, 12:57:21 PM »
I recently received a very attractive offer from a large US tech company which will require me to relocate (With my wife and toddler) to the USA from Canada.  My new employer offers the choice of 4 health care options and I'm not sure how to pick.  There is a small cost to me (varies depending on the plan) with most of the cost covered by the employer.  Everything is administered through Premera Blue Cross.  Plans cover preventive care, prescription drugs, emergency and hospital care, mental health, X-rays, lab work, etc. There are no pre-existing condition exclusions with any of the plans.  Dental and Vision are covered under separate benefits - don't factor those in here.


Option 1: The Shared Deductible Plan Health Reimbursement Account (HRA).  Basically the company puts in $1500 annually and that pays for the first half of the deductible.  Deductible would be $3,000 annually for my family (so I pay the second $1500).  After that I pay 10% in-network or 30% out-of-network.  Unused HRA funds roll over to next year.  I cannot contribute to HRA, only company can. Monthly cost (family plan): $256

Option 2: Health Savings Plan (HSA).  Highest deductible ($4500 annually for family) but HSA funds can go towards that.  Same 10%/30% costs after deductible.  No mention of how much company contributes to HSA.  I can also contribute if I choose. Monthly cost (family plan): $256

Option 3: Standard plan.  Deductible is $900/family/year in-network and $1800 out-of-network.  Same 10%/30% costs after deductible.  Small copay for prescriptions. Monthly cost (family plan): $315

Option 4: In-network only plan.  Deductible is $300/family/year.  There are some low fixed costs for after-deductible expenses.  Small copay for prescriptions. Monthly cost (family plan): $394

All 4 plans have an unspecified annual out-of-pocket max, after which the plan pays for everything (including prescriptions, although the 3rd and 4th option have a separate out-of-pocket max per family of $8,000 and $5,600 respectively).


What information should I be requesting to help make this decision?  I have a month to choose so there is some time.  I know the company is heavily subsidizing the cost of these plans.  How much should I expect to use in-network vs out-of-network coverage?  Obviously the benefit of the HSA is more about tax free growth of the funds and the value depends heavily on how much they contribute.  Option 1 and 3 seem similar except that Option 1 is better if I spend less than $2400 a year and Option 3 is better after that point.

One item to factor in is that my wife and I do plan to have a second child at some point - this may well be while I am working for this company.  We would plan to do a home birth with a midwife (worked great for the first kid) so protecting against that large expense should certainly be considered.


I'm leaning towards option 3 but don't fully understand option 2 and 4 to think I can make the best decision currently.

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Re: Moving to the USA - Overwhelmed with Medical Plan Options
« Reply #1 on: October 14, 2015, 01:54:01 PM »
I am no expert, but from my company's "training" on "HSA" versus the "standard" plan is that HSA is for healthy folks with minimal medical needs.

I would stay clear of option 4. If you are in a location or have an emergency need and find your only option is out of network. you are not covered at all. Sounds scary to me.

Ask your company if they have a online calculator where you type in your planned medical needs to both 2 and 3 and see which will cost you more.

Be sure you know what the max out of pocket is for all 4 options.

I used the provided calculator, and it showed clearly that I needed the standard plan. If my health needs improve I can consider the HSA.

Great options, much better than my options:)

I thought 90/10 plans were considered "cadillac" plans by the ACA and were not allowed? We lost our 90/10 option the year ACA was put in place.

The best of luck to you!

nereo

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Re: Moving to the USA - Overwhelmed with Medical Plan Options
« Reply #2 on: October 14, 2015, 02:13:36 PM »
This all boils down to what your medical needs are, and whether or not you have enough money in the bank to cover a certain deductible.  Since oyu are this forum, I'm going to assume that your savings are growing each month.

Option 1: Useful if you have ongoing medical conditions that require periodic care (e.g. diabetes, pre-existing conditions, etc)
Option 2: Useful if you are generally healthy and your only visits to the doctor is occasional checkups and a rare emergency (broken arm, etc)
Option 3: For people who do not have a few thousand$ to cover the deductible.  This is a poor choice for most mustachians.
Option 4: Like option 3, only with a more limited choice of doctors and an even lower deductible.  The worst option for anyone who saves money each month.

FYI, pre-existing condition restrictions were eliminated with the ACA.


Quote
Option 1: The Shared Deductible Plan Health Reimbursement Account (HRA).  Basically the company puts in $1500 annually and that pays for the first half of the deductible.  Deductible would be $3,000 annually for my family (so I pay the second $1500).  After that I pay 10% in-network or 30% out-of-network.  Unused HRA funds roll over to next year.  I cannot contribute to HRA, only company can. Monthly cost (family plan): $256

Option 2: Health Savings Plan (HSA).  Highest deductible ($4500 annually for family) but HSA funds can go towards that.  Same 10%/30% costs after deductible.  No mention of how much company contributes to HSA.  I can also contribute if I choose. Monthly cost (family plan): $256

Option 3: Standard plan.  Deductible is $900/family/year in-network and $1800 out-of-network.  Same 10%/30% costs after deductible.  Small copay for prescriptions. Monthly cost (family plan): $315

Option 4: In-network only plan.  Deductible is $300/family/year.  There are some low fixed costs for after-deductible expenses.  Small copay for prescriptions. Monthly cost (family plan): $394

Bracken_Joy

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Re: Moving to the USA - Overwhelmed with Medical Plan Options
« Reply #3 on: October 14, 2015, 02:35:37 PM »
A few factors at play: any health conditions requiring regular visits? Plans on more kids soon? High risk hobbies?

If you're healthy, done having kids, and don't do things like snowboard every weekend, I would say option 2. Otherwise, I would do 1 or 3.

I personally wouldn't do 4. In-network is a bear to deal with. When I was doing my OB rotation, we literally sent a woman in labor via ambulance to another hospital so she would be in-network. (The other side of the coin is something like Keizer tends to cover medical equipment much more comprehensively if you're at an in-network hospital, so it's less of a problem to get approval for a commode or a Bi-Pap or something like that to take home).

I suppose it also depends if you have the cash on hand to cover up to the deductible if you needed to.

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Re: Moving to the USA - Overwhelmed with Medical Plan Options
« Reply #4 on: October 14, 2015, 02:38:27 PM »
Option 2: Health Savings Plan (HSA).  Highest deductible ($4500 annually for family) but HSA funds can go towards that.  Same 10%/30% costs after deductible.  No mention of how much company contributes to HSA.  I can also contribute if I choose. Monthly cost (family plan): $256

Option 2 is a High Deductible Health Plan (HDHP) so your out-of-pocket for any medical procedures BEYOND annual checkups would be higher.  (NOTE:  annual checkups are generally covered at 100% in HDHP plans.  YMMV.)  The Health Savings Account (HSA) is offered in conjunction with these plans so the user can save toward these higher anticipated deductible expenses.  HDHP plans typically cost you less out-of-pocket on a monthly basis, and the savings you put aside belong to YOU, and can be used toward any medical expenses.  OR... can be saved and used as another IRA-like retirement savings account - see the Mad Fientist's discussion of HSA's here.

Because companies typically have benefits "open enrollment" every year, you can always change your plan to another plan in a future year.  I'm in my 2nd year of an HDHP with HSA, and the HSA funds are at HSABank, which allows me to transfer the balance to an Ameritrade brokerage account.  In the Ameritrade account, I'm invested in the Vanguard Total Stock Market Index Fund.  As I have medical expenses (very low over the past year), I pay out-of-pocket, and save the receipts.  In the future, I can withdraw funds from the HSA to the value of the receipts at any time.   At age 65, the account becomes just like an IRA, and you can withdrawn funds at any time for any reason.

Latito

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Re: Moving to the USA - Overwhelmed with Medical Plan Options
« Reply #5 on: October 14, 2015, 02:44:13 PM »
Thank you!

I've requested some information as to the out of pocket maximums for each plan as well as the company's contribution to the HSA in option 2.

When you say "90/10" plan is that referring to the "you pay 10% after deductible for in network coverage" component?  It's good to hear that these are great plans.  Coming from Canada I really wouldn't know - our tax dollars pay for 100% of everything without deductible anyway so its all hidden.

With regards to expected costs..
-Myself, my wife and our toddler are generally healthy, young, somewhat active but no high risk hobbies (Low likelihood of surprise costs)
-I have a skin condition for which I have an ongoing prescription (traditional Chinese herbal medicine).  This will cost roughly $4000 annually if it is covered at all (looking into that)
-It is a distinct possibility that we will have a second child while I am working for this company so any birth related costs should be considered (looking into coverage - I assume it would be on the  approved list).
-Any costs specific to children (checkups, shots, etc)


Cash on hand for deductibles isn't an issue - I am looking for the "best value" option.  Obviously if I were to look at thousands of people in my situation you could figure out on average what would be the most cost effective.  I'm looking for a mix of that and "reasonably limiting my risk" - my experience over the next few years could vary wildly from the average so averages aren't as relevant to me as they would be to an insurance company.

nereo

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Re: Moving to the USA - Overwhelmed with Medical Plan Options
« Reply #6 on: October 14, 2015, 02:59:24 PM »
after your follow up, I would just add...

Check into when the coverage for pregnancies start.  That's one area where they can  decide not to cover the costs if you are pregnant within a certain time period of getting coverage (usually if you are pregnant when you enroll or if you get pregnant within the first ~30 days, though it may vary between policies).

My friend got burned because she signed up and then found out she was pregnant two weeks later.  All of her maternity care was out of pocket.

Tester

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Re: Moving to the USA - Overwhelmed with Medical Plan Options
« Reply #7 on: October 14, 2015, 03:02:24 PM »
I think we will be "colleagues" :).
I had to make the same choices this March when I moved to the USA.

I chose the Shared deductible plan because I have a medication which costs 500/month.
For me that made sense as I used the 1500 put in by the company.

Latito

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Re: Moving to the USA - Overwhelmed with Medical Plan Options
« Reply #8 on: October 14, 2015, 03:10:50 PM »
No concerns about being currently or imminently pregnant - that won't be for at least another 6-12 months if not slightly more.  I appreciate the thought though!

Looking forward to working with you, Tester :).  Wouldn't option 3 be better then, since the deductible is lower?  If you were spending under $2400 a year then your portion of the deductible would be lower with option 1, but spending more than that makes option 3 cheaper, no?  Or how does "in network" work related to non-hospital expenses?

Tester

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Re: Moving to the USA - Overwhelmed with Medical Plan Options
« Reply #9 on: October 14, 2015, 03:32:57 PM »
Option 1:

Assuming 500 usd/month, no other things:

6000 cost.
1500 paid by company.
1500 paid by me.
Then, the rest 3000 at 10% is 300.
So total is 1500+300=1800.
Plus 256*12=3072
Total paid by user= 4872

Option 3:

6000 cost.
900 paid by me.
The rest 5100 at 10% is 510.
So total is 900+510=1410.
Plus 315*12=3780
Total paid by user=5190

EDIT: I might have misunderstood how the insurances work here, but this is what I used to decide.
« Last Edit: October 14, 2015, 03:35:55 PM by Tester »

Latito

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Re: Moving to the USA - Overwhelmed with Medical Plan Options
« Reply #10 on: October 14, 2015, 03:44:44 PM »
I was definitely neglecting to factor in the monthly premium.  Good spot, thank you!

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Re: Moving to the USA - Overwhelmed with Medical Plan Options
« Reply #11 on: October 14, 2015, 03:47:09 PM »
What you calculated appears correct, but what matters is how much insurance you actually use.   What you calculated is the MAXIMUM you can pay in one calendar year.
If you are relatively healthy and have no pre-existing conditions than your out-of-pocket costs most years will be just the monthly premium (since office visits are generally covered).  That will be the minimum amount you will pay each year.  Assuming that, Option 1 & 2 = $3072.  Option 3 = $3780.
Option 3 is a better choice IF you spend more than $4,680 per year but LESS than the total premium + deductible of the other two plans.  It's a fairly narrow "sweet spot" where option 3 beats option 1 - but many people choose this exactly because the idea of covering a $900 deductible is so much more palatable than having to pony up a few grand in an emergency.  When you run the numbers, it's rare that option #3 comes out in your favor.

Option 1:

Assuming 500 usd/month, no other things:

6000 cost.
1500 paid by company.
1500 paid by me.
Then, the rest 3000 at 10% is 300.
So total is 1500+300=1800.
Plus 256*12=3072
Total paid by user= 4872

Option 3:

6000 cost.
900 paid by me.
The rest 5100 at 10% is 510.
So total is 900+510=1410.
Plus 315*12=3780
Total paid by user=5190

EDIT: I might have misunderstood how the insurances work here, but this is what I used to decide.

Tester

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Re: Moving to the USA - Overwhelmed with Medical Plan Options
« Reply #12 on: October 14, 2015, 04:10:10 PM »
What you calculated appears correct, but what matters is how much insurance you actually use.   What you calculated is the MAXIMUM you can pay in one calendar year.

Hi,

I used those numbers because those are my numbers (meaning I need a 500USD/month medication :(). And I knew about this condition.
If I would have been healthy I think I would have chosen the HSA option.
By healthy I mean not needing this 500USD/month medicine.
Or better, by healthy I mean how I was around 10 years ago :)).
Hopefully I will get over this and things will improve.

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Re: Moving to the USA - Overwhelmed with Medical Plan Options
« Reply #13 on: October 14, 2015, 04:12:19 PM »
What you calculated appears correct, but what matters is how much insurance you actually use.   What you calculated is the MAXIMUM you can pay in one calendar year.

Hi,

I used those numbers because those are my numbers (meaning I need a 500USD/month medication :(). And I knew about this condition.
If I would have been healthy I think I would have chosen the HSA option.
By healthy I mean not needing this 500USD/month medicine.
Or better, by healthy I mean how I was around 10 years ago :)).
Hopefully I will get over this and things will improve.

great.  I just wanted to make sure, since you said you might not be understanding how it works.

Latito

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Re: Moving to the USA - Overwhelmed with Medical Plan Options
« Reply #14 on: October 14, 2015, 04:30:20 PM »
Good points!  I ran the numbers on #1 vs #3 and I can't find a way for #3 to come out ahead.  After 3k spending the deductibles are maxed ($600 advantage to #3), premiums are paid ($708 advantage to option #1) and after-deductible costs are steady at 10% each (with a $210 head start advantage to option #1) for a net benefit of #318 going to option #1 over #3.

Really this comes down to #1 vs #2, which is a question of expected costs.  Given my circumstances (similar to Tester), I'd pick option #1.  For a healthy person with no expected costs, #2 could likely be best.

Thank you!
« Last Edit: October 14, 2015, 04:33:54 PM by Latito »

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Re: Moving to the USA - Overwhelmed with Medical Plan Options
« Reply #15 on: October 14, 2015, 04:35:27 PM »
-I have a skin condition for which I have an ongoing prescription (traditional Chinese herbal medicine).  This will cost roughly $4000 annually if it is covered at all (looking into that)

If this expense is covered by the insurance or otherwise payable from the HRA then option 1 might be best for you. Otherwise option 2 is likely best with the HSA providing a tax shelter for some combination of paying for this treatment (if allowed) and extra retirement savings. Option 3 and 4 are how insurance companies make money off people without the means or discipline to have an emergency fund.

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Re: Moving to the USA - Overwhelmed with Medical Plan Options
« Reply #16 on: October 14, 2015, 04:44:03 PM »
On moving to the USA, I chose the HMO (in-network type plan).   Double check where your in network providers are, and what happens when you are outside of the minimum radius to your costs, though.    I was in California, with Kaiser health, so the providers were everywhere, plus a major center within 5 miles of my home / work.


This is the simplest one to use, especially for those of us not used to insurance billing, which is a nightmare in the USA.  It can be a 20 hr a week job to track and file insurance claims for a family with minor to moderate, controllable health issues in the US.

HMO was very close to the Canadian system, but better in many ways (one location for most services, so exam, blood work, xray, kids visits in the same complex)..  Some alternative medicine coverage was provided, too.  (just look it up, you may need to use their providers).

It had much better coverage for things like knee replacements and such than in Canada, even with the co-pay or deductable, you just can't get knee replacements for any amount of money in Canada, unless you make the right (waiting) list.

I did get specialist referrals a couple of times, but these are for in-network providers, so I did think a lesser degree of health care there as I think they had been coached to provide the least costly solution / checks, which turned out not to be the best choice (upon my return to Canada), so a standard plan with a chosen doctor / network may be better for speciality services.   This is based on only 2 referrals, though.



Recap -- if you have lots of providers nearby, and out of area insurance (for that utah camping trip, for example), then a in-network system could be very effective and lower cost.   If you don't like it after a year or two, usually you can switch at the annual signup time.

If you can not get your herbal medicine covered, then I think an HSA may be the way to go...   Just check to see that it would be covered, but these tend to have the most flexible items covered -- you just have to do the paperwork.

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Re: Moving to the USA - Overwhelmed with Medical Plan Options
« Reply #17 on: October 14, 2015, 09:41:54 PM »
I have no idea about the US health care system other than it's very confusing to an outsider. However, I see health insurance in my country as insuring against the unlikely but major consequence scenario. I had an unexpected cancer diagnosis a couple of months ago where I used my private health insurance. Our public system covered 2 hospital admissions from emergency visits summer before last (for a weird out of the blue immune condition) and 3 years ago 9 days in hospital with a completely out of the blue type 1 diabetes diagnosis (much rarer than the cancer I have). I'm only in my early 40s. Another friend was diagnosed with advanced cancer in her early 30s. Another friend was diagnosed with the same cancer as me a couple of years ago, again in her early 40s. It's my understanding that the US system charges for all emergency visits (they're free in my country) and admissions.

If it was me deciding, I'd also be assessing which plan works best for the utterly unexpected, high healthcare needs scenario. Even a car accident. Anything that sends you to emergeny unexpectedly. It's the big stuff that would scare me about moving to the US. (thank god I was in Australia when all my health stuff happened, otherwise we would likely be bankrupt despite our relatively good financial state)

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Re: Moving to the USA - Overwhelmed with Medical Plan Options
« Reply #18 on: October 15, 2015, 05:48:23 AM »
I have no idea about the US health care system other than it's very confusing to an outsider.... It's my understanding that the US system charges for all emergency visits (they're free in my country) and admissions.

If it was me deciding, I'd also be assessing which plan works best for the utterly unexpected, high healthcare needs scenario. Even a car accident. Anything that sends you to emergeny unexpectedly. It's the big stuff that would scare me about moving to the US. (thank god I was in Australia when all my health stuff happened, otherwise we would likely be bankrupt despite our relatively good financial state)
As a US citizen living abroad, one of the things that has struck me the most is how distrustful people are of another country's health-care system.  For example, Canadians overwhelmingly think the US has a terrible health-care system, and people from the US overwhelmingly fear the Canadian health-care system.  My friends from the UK haven't liked the Canadian system, and ...

As for which plan works best for the utterly unexpected, what's important to understand is that each medical plan has a annual deductible that ranges from $0 to ~$5000.  Once you hit that amount you don't pay for anything that is covered - in a sense that's the maximum out-of-pocket expenses you will have on anything typically covered in the healthcare system - or you pay for just a tiny fraction for a visit (e.g. the poster's 10% of costs).  The ACA did away with upper limits (you cannot hit a ceiling) and a plan cannot reject or drop you because you have a pre-existing condition.
In short, your maximum health-care expenses will typically be limited to the monthly fee, and won't exceed much more than the monthly fee + deductible, even if you wind up needing expensive surgeries and long-term care.
Also, just to be technical your emergency room visits in Australia are not "free".  They're just not paid by the end user.  Every doctor's visit, ever ER admittance, every specialist you see costs money.  Preventative and scheduled care (doctors visits vs ER) is substantially cheaper, and one of the things the ACA was designed to do was effectively eliminate people who had no health-care and no access to a regular physician.