Navigating bad health insurance options

[Britan]

Can someone look over my math and tell me if my work's health insurance options are not my best options?

My SO and I are both losing our currently free healthcare coverage soon. I can join my work's insurance or get an exchange plan. SO will have no work insurance option, and can either join me on work insurance or get an exchange plan.

My work's insurance plans don't really seem great. There are three options: (1) the Cadillac ~$800/month plan, (2) the "moderate" ~$700/month plan (HMO), and (3) the ~$500/month HRA+FSA. Prices are for medical+dental for two. We were told recently that they have no intentions of changing these plan designs.

Of those, the third option looks the "best" to us. Its a $4,000 deductible (HRA covers half of that), everything is covered after that. The thing is, we barely use health insurance, and that's a lot of money every month - it would be our highest spending category besides rent. And I'd really like an HSA for the tax advantaged saving.

My state exchange offers a bronze HSA plan - same issuer and network as my work option, so all covered doctors are the same. We could both enroll for about $300/month total for medical+dental for both of us. Neither of us are likely to be eligible for subsidies, so that's full cost.  The deductible is much higher - $6,000/person, but the plan pays 100% of expenses after that, plus we'd have HSAs that we can easily max out (up to the yearly limit) and use to cover the deductible in case of a true emergency.

Am...I totally crazy for wanting to go with the exchange plan over my work's insurance? Is the lower deductible worth an extra $2,000 per year in premiums that I could otherwise be putting in an HSA? Am ...I missing something?

[regulator]

Can someone look over my math and tell me if my work's health insurance options are not my best options?

My SO and I are both losing our currently free healthcare coverage soon. I can join my work's insurance or get an exchange plan. SO will have no work insurance option, and can either join me on work insurance or get an exchange plan.

My work's insurance plans don't really seem great. There are three options: (1) the Cadillac ~$800/month plan, (2) the "moderate" ~$700/month plan (HMO), and (3) the ~$500/month HRA+FSA. Prices are for medical+dental for two. We were told recently that they have no intentions of changing these plan designs.

Of those, the third option looks the "best" to us. Its a $4,000 deductible (HRA covers half of that), everything is covered after that. The thing is, we barely use health insurance, and that's a lot of money every month - it would be our highest spending category besides rent. And I'd really like an HSA for the tax advantaged saving.

My state exchange offers a bronze HSA plan - same issuer and network as my work option, so all covered doctors are the same. We could both enroll for about $300/month total for medical+dental for both of us. Neither of us are likely to be eligible for subsidies, so that's full cost.  The deductible is much higher - $6,000/person, but the plan pays 100% of expenses after that, plus we'd have HSAs that we can easily max out (up to the yearly limit) and use to cover the deductible in case of a true emergency.

Am...I totally crazy for wanting to go with the exchange plan over my work's insurance? Is the lower deductible worth an extra $2,000 per year in premiums that I could otherwise be putting in an HSA? Am ...I missing something?

Unless the network of providers is different, I would go with the exchange policy.

[asiljoy]

I'd lean towards the exchange plan as well. Given how close they are in overall costs (if you compare the annual cost and a maxed deductible), if you invest in an HSA with the difference as you plan, there's just more of a long term upside if you think beyond just the upcoming year.

[Britan]

Good to know I'm not totally off base here. I was just surprised that our work options seemed to be so handily beat by the "worst" exchange option.

And yeah, the network of providers is exactly the same. I've already checked, and every doctor we see and every hospital in our city is in network.

[forummm]

Since your employer offers coverage, if your household makes more than ~$63k, the $500/mo plan is considered "affordable", and you won't qualify for subsidies.

There are a number of reasons why your employer plan could be more expensive than a Marketplace plan. For example, past claims by other people on your employer's plan, the age mix of your fellow employees, the much smaller risk pool for your employer vs the state, your employer's potentially poor bargaining and lack of leverage, etc. Health insurance is such a weird industry.

[chicagomeg]

I think what you're failing to account for is that your work plan is pretax, including not paying FICA taxes. The exchange plan could be tax deductible as a medical expense if you itemized, but you would need crazy high medical expenses. I think once you account for that, the costs are much closer than you are seeing.

[Hoberto]

Look into whether providers in your area are taking exchange insurance.  I'm in a town of 300,000 and there are very few PCPs taking some of the exchange plans.  Finding a specialist can be even worse, with patients having to drive an hour or more.  Every plan is different, though, some have plenty of local providers.  If you have a provider you like and want to keep, call and make sure they are taking the plan you are considering; the online information is rarely accurate.

[asiljoy]

What do the numbers look like if you get the individual plan at work and your SO goes on the exchange?

[Britan]

Thanks all for the feedback and thoughts.

forummm- Yeah, we are not eligible for subsidies. Even so, cost per month is lower + the HSA. Theoretically I know why employer insurance can cost more, it's just... I'd have thought my employer cared just a little bit more. It's kind of a joke (or an insult depending on who you ask) when compared to what our competitors in this industry offer their employees. For example, I know someone paying $75/month to cover an employee, spouse, and 4 dependents, with a lower deductible and employer matching contributions to their HSA. Their trade-off is having to deal with a terrible boss I guess. (:

mlipps- That is good to know! That's exactly the kind of thing I was thinking I might be missing. How would I adjust the per month cost of the plans to account for that, so I can make a better comparison? And would this change if I plan on itemizing for 2015 anyways? Are employer's insurance premiums always pre-tax?

hoberto- I checked with all of my doctors earlier this year and they do accept this plan. It actually uses the same network as my work plan does, and is through one of the big insurers in the area. Fortunately I live in a good place for this.

asiljoy- It's about $50 more per month for me to be on my work plan and SO on exchange, so about $350/month. Assuming rates don't go up for me this year. Also, no HSA.