Hi everyone
I just turned 26 a few months ago and recently got hired for a new job. So I'll be selecting a health insurance plan for the first time. I'm looking at the numbers and the decision seems shockingly easily to me so I wanted to run it by all of you knowledgeable folk. Actually, there are 2 HD plans and one PPO. I'm actually not sure which HD plan I should choose, but they both seem to be vastly superior to PPO.
Here are the numbers:
Highest deductible:
-deductible: 2500
-bi-monthly premium: 25 (600/year)
-HSA: 3500 max with employer contribution of 1000
-OOP Max: 5500
Middle deductible:
-deductible: 1500
-bi-monthly premium: 37.5 (900/year)
-HSA: 3500 max with employer contribution of 500
-OOP Max: 3000
PPO:
-deductible: 1000
-bi-monthly premium: 122.5 (2940/year)
-HSA: none
-OOP Max: 4750
Now let's compare:
-If I didn't have any medical expenses, I would save 300 dollars by choosing high over mid, 2040 dollars choosing mid over PPO, and 2340 by choosing high over PPO.
-Let's say I have a particularly unhealthy year. I would have to spend 2340 extra before the ppo would be equivalent to the high. Not just total expenses; there would still be copays to consider on the PPO. But there's more: My employer contributes 1000, which bumps that number up to 3340. On top of that, the HSA is tax free. Let's say I contributed the exact difference in premiums to my HSA, 2340. In my tax bracket, that 2340 would be the equivalent of 3000 post tax. That would bring the minimum extra spend required up to 4000 for the PPO plan to be merely equivalent in costs to the HD/HSA plan. (Note: I am a complete novice when it comes to taxes/insurance, so if any of this is off, please let me know!)
Some other things to consider:
-I am single and have no children
-In-general, I live a very healthy lifestyle. I exercise regularly and am quite conscious of what I eat. I don't smoke or drink. I have been to the doctor for physical illness once in the last ~4 years.
-There is a caveat here: I am dealing with 2 different injuries right now, to my foot and my wrist. I've been dealing with them for months and it's possible MRI's and physical therapy may be required. It seems like this is what could be the real different maker here, however I just in this moment realized that even if I saw this as inevitable, the mid-plan is always going to make more sense than the PPO: the mid plan's OOP max is only 60 more than the yearly premium on the PPO. When combined with employer contribution to HSA (500) and HSA tax savings (If I contribute the premium difference, that is 2040, equal to ~2600 post tax), then in a worst case scenario the mid would still cost less than the PPO. I just crunched these numbers and I feel like I must have made a mistake; it seems to me the mid plan is always cheaper than PPO? (Assuming a contribution of at least 1950 to HSA)
-I haven't crunched the numbers but it seems like the high deductible plan would still win out against the PPO too in most scenarios.
-It seems to me the only way this could come back to bite me is if I had a serious one-time medical expense (like my entire OOP max upfront), and didn't have the means to immediately cover it. This is possible, I suppose; I am planning on aggressively paying down student debt, and don't plan on having more than 1-2 grand saved in cash on-hand. Still, with a small safety buffer, I don't think I have anything to fear at my income (~85K gross). I can always use credit cards upfront and pay them off by the next paycheck or 2.
Again, I'm a real novice when it comes to taxes, health insurance, employer contributions and other benefits, etc. So I have no doubt that I'm probably missing something. It just seems like one of the high deductible plans is definitely the way to go regardless of my health. Any thoughts or comments are of course welcome.