Author Topic: cost of employer medical insurance  (Read 1359 times)

frugalnacho

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cost of employer medical insurance
« on: September 11, 2020, 01:39:43 PM »
It's open enrollment time at my company, and the medical insurance seems egregiously priced.  All prices given are for the family option.

The cheapest plan is an HMO with a $4k individual deductible.

There are other buy up options that are more expensive (my cost/wk / employer cost/wk - my cost/yr / employer cost/yr - total plan cost/yr)

HMO w/$500$4,000 ded. = $119.10 / $169.17 - $6,193.20 / $8,796.84 - $14,990.04
HRA w/$500 ded. = $154.23 / $155.92 - $8,019.96 / $8,107.84 - $16,127.80
PPO w/$500 ded. = $277.83 / $293.55 - $14,447.16 / $15,264.60 - $29,711.76
HDHP                  = $200.79 / $259.16 - $10,441.08 / $13,476.32 - $23,917.40

Is it just me or are these prices absolutely insane?  Not only my price, but the price my company pays.  I'd love to go with HDHP to get an HSA, but it's not worth an extra $4,247.88/yr in premiums, especially considering then I have to deal with paying for everything including prescriptions.  I'd never come out ahead financially even though my employer would pick up almost $4,700 more of the bill if I chose that option. 

How good can a plan be to justify costing $29,711.76/yr in just premiums?  That's mind boggling to me. 

« Last Edit: September 11, 2020, 09:32:54 PM by frugalnacho »

PDXTabs

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Re: cost of employer medical insurance
« Reply #1 on: September 11, 2020, 01:44:55 PM »
Yup. Family PPO at my employer is ~$24K for $1000 deductible and family out of pocket max of $15K.

I will not retire in this country.

wenchsenior

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Re: cost of employer medical insurance
« Reply #2 on: September 11, 2020, 02:57:57 PM »
It's open enrollment time at my company, and the medical insurance seems egregiously priced.  All prices given are for the family option.

The cheapest plan is an HMO with a $4k individual deductible.

There are other buy up options that are more expensive (my cost/wk / employer cost/wk - my cost/yr / employer cost/yr - total plan cost/yr)

HMO w/$500 ded. = $119.10 / $169.17 - $6,193.20 / $8,796.84 - $14,990.04
HRA w/$500 ded. = $154.23 / $155.92 - $8,019.96 / $8,107.84 - $16,127.80
PPO w/$500 ded. = $277.83 / $293.55 - $14,447.16 / $15,264.60 - $29,711.76
HDHP                  = $200.79 / $259.16 - $10,441.08 / $13,476.32 - $23,917.40

Is it just me or are these prices absolutely insane?  Not only my price, but the price my company pays.  I'd love to go with HDHP to get an HSA, but it's not worth an extra $4,247.88/yr in premiums, especially considering then I have to deal with paying for everything including prescriptions.  I'd never come out ahead financially even though my employer would pick up almost $4,700 more of the bill if I chose that option. 

How good can a plan be to justify costing $29,711.76/yr in just premiums?  That's mind boggling to me.

We're on the Self+1 (cheaper than family) Standard plan (good coverage, more expensive than Basic) for Federal employees.  This is the 'gold plated' plan that your typical Congressperson used to be on back in the pre-ACA days.  A lot of the public sure seemed to envy this plan, judging by the rage-filled 'Congressional benefits' memes (usually full of inaccuracies) that used to circulate all the time.

And it's good coverage. But it ain't cheap.

The prices are pretty comparable to what you list. We don't have a deductible, but pay about 7K/year in premiums.  The Feds (taxpayers) pay twice that for their employer contribution.  There's co-pays and partial payments for every visit and medication and procedure except an annual basic physical and a few of the 'highly recommended' screening proceedures.


seattlecyclone

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Re: cost of employer medical insurance
« Reply #3 on: September 11, 2020, 03:30:54 PM »
Looking at my state exchange, for a family of four (married 40-year-olds and two 10-year-old kids), the unsubsidized rates range from:
* $923/month ($11k/year) for a bronze HMO with a $6,800 individual deductible / $16,300 family out-of-pocket max at the low end, to
* $1,846/month ($22k/year) for a gold EPO with $1,500 individual deductible / $13,600 family out-of-pocket max.

Neither of these plans offer any coverage for out-of-network providers outside of life-threatening emergencies.

In comparison, your cheaper two plans look downright reasonable. Pay half the deductible for just one person on our cheapest HMO plan and you're worse off than on your HMO. The more expensive two do look high, but I'm guessing you get more for the money. You might have access to a bigger network of doctors. You might have the opportunity to get some coverage for doctors out of network. You might have a lower out-of-pocket maximum.

The risk pool will also affect the cost. Do the employees at your company tend to skew older? If so, that will add to the cost. Do your coworkers with kids often have several? That will also add to the cost.

Laserjet3051

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Re: cost of employer medical insurance
« Reply #4 on: September 11, 2020, 06:16:31 PM »
Last year my premiums for whole family hmo were 25k, i paid every penny of that. Your plans costs are in line with current pricing.

Cranky

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Re: cost of employer medical insurance
« Reply #5 on: September 11, 2020, 07:40:30 PM »
Thats about what our plan works out to be.

And today I am mad because I asked the doctor to send the prescription for my inhaler to the mail order pharmacy because the insurance company was agitating for that. He thoughtfully prescribed the new generic version - which turns out to be more than twice as expensive as the brand name. Super.

fuzzy math

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Re: cost of employer medical insurance
« Reply #6 on: September 11, 2020, 07:48:11 PM »
I used to pay $800 / month for my spouse and kids to be on a plan that was separate from mine, because my employer wouldn't subsidize other people and there was no family coverage. So imagine 2 different deductibles. Now we have a HDHP that doesn't care how many kids a person has.

I also used to have a HMO that covered almost everything out of pocket. It was a pain, but cheap if you followed protocol. So paying $500 a month for a family for a $500 deductible sounds great. My employer does offer a PPO that's ridiculously expensive. I'm not sure if people even chose it. Maybe it's there to make their other plans seem more reasonable.

Paul der Krake

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Re: cost of employer medical insurance
« Reply #7 on: September 11, 2020, 08:00:39 PM »
Yes its insanely expensive to insure a standard nuclear family. A ton of wage growth over the last 30 years has gone straight to the medical industry. Its totally possible for a company to pay more to insure a low wage workers family than their actual wages.

Its mostly hidden from view so people dont care.

frugalnacho

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Re: cost of employer medical insurance
« Reply #8 on: September 11, 2020, 09:59:25 PM »
Wow. Healthcare is insane in this country.

Schaefer Light

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Re: cost of employer medical insurance
« Reply #9 on: September 12, 2020, 06:15:48 AM »
Depending on your salary, you might be better off if your employer didn't even offer health insurance.

rantk81

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Re: cost of employer medical insurance
« Reply #10 on: September 12, 2020, 08:52:43 AM »
It's open enrollment time at my company, and the medical insurance seems egregiously priced.  All prices given are for the family option.

The cheapest plan is an HMO with a $4k individual deductible.

There are other buy up options that are more expensive (my cost/wk / employer cost/wk - my cost/yr / employer cost/yr - total plan cost/yr)

HMO w/$500$4,000 ded. = $119.10 / $169.17 - $6,193.20 / $8,796.84 - $14,990.04
HRA w/$500 ded. = $154.23 / $155.92 - $8,019.96 / $8,107.84 - $16,127.80
PPO w/$500 ded. = $277.83 / $293.55 - $14,447.16 / $15,264.60 - $29,711.76
HDHP                  = $200.79 / $259.16 - $10,441.08 / $13,476.32 - $23,917.40

Is it just me or are these prices absolutely insane?  Not only my price, but the price my company pays.  I'd love to go with HDHP to get an HSA, but it's not worth an extra $4,247.88/yr in premiums, especially considering then I have to deal with paying for everything including prescriptions.  I'd never come out ahead financially even though my employer would pick up almost $4,700 more of the bill if I chose that option. 

How good can a plan be to justify costing $29,711.76/yr in just premiums?  That's mind boggling to me.

The terms "HMO" and "PPO" refer to how you have access to doctors within a particular network.
HRA and HDHP plans can each have either a HMO or PPO style doctor network.
Even within HMO and PPO plans, some doctor networks are very broad, and some are very narrow.

It's impossible to give you a recommendation without knowing:
1) Is a large doctor network important to you? Is it important to be able to pick your doctors?
2) Is the doctor network the same or different for each of those plans?
3) What are the out of pocket maximums for each of those plans?
4) How much will your employer chip in toward and HRA?
5) How "generous" or "not-generous" are the co-pays and co-insurance for the various plans
6) Do you typically use a lot of medical services in a plan year?
7) etc etc etc

In prior years, when my employer offered a bunch of shitty plans, I would create a spreadsheet to test out various "scenarios" under each plan my employer offers -- and see how much my total expenditure would be.  I'd test extreme cases of needing almost zero care, or max'ing out all expenses, or middle of the road scenarios.

In my experience, it seemed like it was always a better deal (financially) to pick the plans with the lowest up-front costs in premium.  This is probably true in most cases, UNLESS you KNOW you are almost guaranteed to hit the out-of-pocket maximums.  Even then, it could still be better to pick the lower premium plans.

Of course, if the doctor networks are different among the plans, and you really want a larger choice of doctors, then that can obviously take precedence over the "financial" aspect of it.

Thankfully, having to make those horrible "choices" seem to be in my rear-view-mirror for me.  I recently started working for a new company that doesn't give me a whole lot of choices to pick from. Instead, they just offer one incredibly generous plan with very minimal premiums, large coverage, and low deductibles.  I feel very fortunate to be in this situation again.  At my previous employer, having a $10K out of pocket maximum and a very restrictive doctor network -- made me feel like I was basically uninsured.


BlueMR2

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Re: cost of employer medical insurance
« Reply #11 on: September 12, 2020, 11:31:49 AM »
Depending on your salary, you might be better off if your employer didn't even offer health insurance.

100%

Post COVID restart my wife's been working a LOT more hours than before.  Her part-time status is in danger as we approach enrollment season.  She may end up getting into the group that gets health insurance.  If so, that will cost us extra money as she will have to leave my plan and go onto the one that her company offers.  We truly would be better off if her company did not offer health insurance at all!

SimpleCycle

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Re: cost of employer medical insurance
« Reply #12 on: September 12, 2020, 02:35:42 PM »
The strange thing about health insurance in this country is it's really a combination of pre-paid routine medical care and true insurance (protection against risk of large loss).  So your premiums have to cover your expected routine use of health services, plus your portion of the chance of having a catastrophic medical cost.

Per capita healthcare spending in this country is around $11k per person.  Premiums are just the actuarial value of the healthcare you will use, plus some overhead for administration and profit.  So those prices seem right, based on the statistically average family in the commercially insured market.  But I also do this as my job, which is why it is not surprising to me.

To pick a plan, I run the numbers based on expected, high, and catastrophic spending and pick which one seems like the best set of tradeoffs given my expected use vs. the risk of having unexpectedly high utilization.  This generally has resulted in picking the "low" plan and sucking up the occasional year of bad luck/poorer health.

kanga1622

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Re: cost of employer medical insurance
« Reply #13 on: September 12, 2020, 06:21:39 PM »
Health insurance is such a huge perk at my office that it would make it super hard to leave. Employees pay $0 premium. You only pay for dependent coverage. As DH and I are both employed there, we pay approx $2000 a year for family health insurance coverage with a $1500 per person deductible or $3750 family deductible. OOP max is $9375.

Our employer pays just over $20,000 in premiums for DH and I.

I cannot even begin to think about how much more wed have to make elsewhere to come out even just on healthcare coverage.

Schaefer Light

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Re: cost of employer medical insurance
« Reply #14 on: September 13, 2020, 06:21:22 AM »
Health insurance is such a huge perk at my office that it would make it super hard to leave. Employees pay $0 premium. You only pay for dependent coverage. As DH and I are both employed there, we pay approx $2000 a year for family health insurance coverage with a $1500 per person deductible or $3750 family deductible. OOP max is $9375.

Our employer pays just over $20,000 in premiums for DH and I.

I cannot even begin to think about how much more wed have to make elsewhere to come out even just on healthcare coverage.
That can be good and bad.  If you start hating your job, then you're in a "golden handcuffs" situation.  Just one of the many reasons why I'm not a big fan of employer-provided health insurance.

kanga1622

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Re: cost of employer medical insurance
« Reply #15 on: September 13, 2020, 07:24:58 AM »
Health insurance is such a huge perk at my office that it would make it super hard to leave. Employees pay $0 premium. You only pay for dependent coverage. As DH and I are both employed there, we pay approx $2000 a year for family health insurance coverage with a $1500 per person deductible or $3750 family deductible. OOP max is $9375.

Our employer pays just over $20,000 in premiums for DH and I.

I cannot even begin to think about how much more wed have to make elsewhere to come out even just on healthcare coverage.
That can be good and bad.  If you start hating your job, then you're in a "golden handcuffs" situation.  Just one of the many reasons why I'm not a big fan of employer-provided health insurance.

Luckily I have a lot of options to transfer within the system if I get tired of a position. Ive been with this employer for 20 years but in 3 different roles. I love 90% of what I do and am the most tech oriented of our support staff so I get to try out a lot of new software which helps keep things fresh. DHs job seems to always be shifting which he doesnt exactly love but he isnt sitting at a desk all day which would drive him crazy.

Tropical

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Re: cost of employer medical insurance
« Reply #16 on: September 13, 2020, 07:25:19 AM »
Health insurance is such a huge perk at my office that it would make it super hard to leave. Employees pay $0 premium. You only pay for dependent coverage. As DH and I are both employed there, we pay approx $2000 a year for family health insurance coverage with a $1500 per person deductible or $3750 family deductible. OOP max is $9375.

Our employer pays just over $20,000 in premiums for DH and I.

I cannot even begin to think about how much more wed have to make elsewhere to come out even just on healthcare coverage.

Thats exactly what happened in a place from hell I used to work.
the medical plan was so generous that employees that had family needed to considered it as part of their $ compensation.

For me, the environment was so toxic that I started getting sick, so I left. I might be in a better financial situation if I would have stayed. However, Im emotionally healthier now and for me, thats priceless.