Author Topic: Which health coverage option is best?  (Read 2041 times)

mrteacher

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Which health coverage option is best?
« on: October 15, 2018, 12:21:24 PM »
I am getting more comfortable with health plan lingo and think I have a sense for which plan is better and why, but I'd like to pick the collective MMM brain.

Here are our (my wife and I) options:

*these are all for the same health plans.

1.
Deductible: $2700
In-Network Coinsurance: 0%
Yearly Premium: $2,682, divided into 24 pay periods.

2.
Deductible: $2700
In-Network Coinsurance: 10%
Yearly Premium: $1,534, divided into 24 pay periods.

3.
Deductible: $4000
In-Network Coinsurance: 10%
Yearly Premium: $585, divided into 24 payments

So my understanding is that with Option 1 our fixed costs are higher, but we pay nothing once we hit the premium whereas with Option 2/3 we save money on the premiums, but we pay 10% of all costs (including preventative) beyond the deductible.

So Option 2 is $1,148 less in fixed costs/year. If we have even $10,000 of medical costs beyond the deductible, Option 2 is still the better choice, right? Option 1 only makes sense if we were to have a big surgery, a childbirth, etc. Right?

Am I missing anything?
« Last Edit: October 16, 2018, 05:24:09 PM by mrteacher »

SHARP_00

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Re: Which health coverage option is best?
« Reply #1 on: October 15, 2018, 12:55:52 PM »
Your break-even point is $14,180 in medical expenses.

Option 1 premium (2682)- option 2 (1534) = $1148 *10 = $11,480 excess of deductible + 2700 = $14,180

Anything below this amount and option 2 is the better deal, anything above you save with option 1. The last bit to be aware of is your downside risk with option 2 could be mitigated by an out of pocket max.

Unless you have known, high medical expenses for the next year, or know that you could not pay up to the out of pocket max if a major expense came along, option 2 is the better choice.

mrteacher

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Re: Which health coverage option is best?
« Reply #2 on: October 15, 2018, 01:24:06 PM »
Your break-even point is $14,180 in medical expenses.

Option 1 premium (2682)- option 2 (1534) = $1148 *10 = $11,480 excess of deductible + 2700 = $14,180

Anything below this amount and option 2 is the better deal, anything above you save with option 1. The last bit to be aware of is your downside risk with option 2 could be mitigated by an out of pocket max.

Unless you have known, high medical expenses for the next year, or know that you could not pay up to the out of pocket max if a major expense came along, option 2 is the better choice.

Thanks!

Barring an unforeseen high-cost medical incident, the only thing that could happen in 2019 is a pregnancy/child birth. I am ignorant regarding the typical pregnancy/birth costs. Would that push us past the break-even point? I guess my question is, what is the least expensive a child birth can be?

seattlecyclone

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Re: Which health coverage option is best?
« Reply #3 on: October 15, 2018, 01:52:40 PM »
Your break-even point is $14,180 in medical expenses.

Option 1 premium (2682)- option 2 (1534) = $1148 *10 = $11,480 excess of deductible + 2700 = $14,180

Anything below this amount and option 2 is the better deal, anything above you save with option 1. The last bit to be aware of is your downside risk with option 2 could be mitigated by an out of pocket max.

Unless you have known, high medical expenses for the next year, or know that you could not pay up to the out of pocket max if a major expense came along, option 2 is the better choice.

Thanks!

Barring an unforeseen high-cost medical incident, the only thing that could happen in 2019 is a pregnancy/child birth. I am ignorant regarding the typical pregnancy/birth costs. Would that push us past the break-even point? I guess my question is, what is the least expensive a child birth can be?

We've had two of the least-complicated childbirths possible in a hospital, and the cost ended up being in the ballpark of that breakeven point. I expect it could have easily been more if there were any complications at all.

Rosy

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Re: Which health coverage option is best?
« Reply #4 on: October 15, 2018, 02:07:06 PM »
Your break-even point is $14,180 in medical expenses.

Option 1 premium (2682)- option 2 (1534) = $1148 *10 = $11,480 excess of deductible + 2700 = $14,180

Anything below this amount and option 2 is the better deal, anything above you save with option 1. The last bit to be aware of is your downside risk with option 2 could be mitigated by an out of pocket max.

Unless you have known, high medical expenses for the next year, or know that you could not pay up to the out of pocket max if a major expense came along, option 2 is the better choice.

Thanks!

Barring an unforeseen high-cost medical incident, the only thing that could happen in 2019 is a pregnancy/child birth. I am ignorant regarding the typical pregnancy/birth costs. Would that push us past the break-even point? I guess my question is, what is the least expensive a child birth can be?

Childbirth - if there are any complications or you need a specialist consult can be insanely high, especially if afterwards there is ICU care or extended treatment and medication for the baby.

mrteacher

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Re: Which health coverage option is best?
« Reply #5 on: October 15, 2018, 02:12:43 PM »
It seems like Option 1 is the clear winner if my wife were to give birth during the plan year, but in a 'normal' year Option 2 would save us around $1,000.

seattlecyclone

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Re: Which health coverage option is best?
« Reply #6 on: October 15, 2018, 02:38:40 PM »
What's the out-of-pocket maximum in either plan? Could be the downside to Option 2 isn't that bad even in a bad year.

mrteacher

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Re: Which health coverage option is best?
« Reply #7 on: October 15, 2018, 05:06:04 PM »
What's the out-of-pocket maximum in either plan? Could be the downside to Option 2 isn't that bad even in a bad year.

Out of pocket maximum is $6,700.

I just learned about a 3rd option:

Deductible: $4000
In-Network Coinsurance: 10%
Yearly Premium: $585, divided into 24 payments


mrteacher

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Re: Which health coverage option is best?
« Reply #8 on: October 17, 2018, 11:23:09 AM »
Any other thoughts?

 

Wow, a phone plan for fifteen bucks!