posted
My husband's work has several options for health care- Cigna HMO, Aetna PPO or Catastrophic. From what I can tell, the catastrophic is basically you pay nothing for the first $2500 and then you have the Aetna plan. According the the website where you enter your expected costs in and it calculates which plan is best, the Catastrophic is what we should do. When my husband asked his coworkers, all of them use the normal cigna or aetna and think cat seems like a bad idea. They have a HSA so we would put $2500 in there. Even with this $2500 this is about $50 a month cheaper than the non-cat insurance. Is there something I am missing that makes this a bad idea. I have two kids and my prescription bill before insurance is usually $300 a month, $125 after insurance pays what they are willing to pay.
Posts: 2223 | Registered: Mar 2008
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posted
You need to look at what the per payroll amounts are, the co-pays, and deductables are compared to your monthly medical costs.
For example at my job we have an exclusive and a value option. The exclusive has a $25 co-pay and $200 deductable per person. (Caps at $600 for a family). The Value has a $35 co-pay and $400 per person deductable ($1200 cap). The deductable really only comes into play if I go to the hospital or have surgery.
The cost difference is about $120 a month between the plans. Since my wife and I don't have any health issues, I go with the value. The amount I would save on co-pays and deductable is less than what I would pay out in additional costs each pay period.
Some plans however do cover more. Your husband's top tier plan may cover 100% of hospital related costs after the deductable has been reached, while the cheaper plan may only cover 80% or 90%. You should consider this when planning for health costs as well. A few years ago I had a sinus surgery done and because I was on the cheaper plan I ended up paying almost $1200 after insurance, while I would have only paid the $200 deductable if I were on the exclusive. It evened out however because I was paying $120 less each month out of my paycheck.
You will need to research what is best for your family. Insurance companies literally have HUNDREDS of plans out there, and your company may only subscribe to one or two. Sometimes it is even cheaper to purchase health insurance yourself instead of going through your employer, depending on the coverage.
The problem with buying it on your own is that the rules about pre-existing conditions don't kick in for them until 2014. The other problem is that the prices can vary drastically depending on what state you live in. This is part of the reason enabling people to shop for insurance across state lines would have been beneficial.
You need to be careful with what plan you choose as well, since if you pick a low deductable plan you may not be eligible to contribute to your HSA.
ETA: The other thing to consider is that many health plans are separate from prescription drug plans. At times you are also able to get discounts on prescription drugs through places such as credit unions as an added benefits. Some of our clients here at the payroll company I work for get the benefit as part of their payroll processing, and it is included with their service.
Take a look at your husband's employee handbook and see what is out there. You never know!
posted
Thanks. They actually have a calculator on the webpage where you can put in expected charges and I tried a bunch of different things and I kept coming up with some savings on the higher deductible plan. Which is why I was very surprised when everyone my husband talked to was vehemently against it. I figured there must be something important I am missing. The HSA is only allowed with the high deductible plan. It also is set up to pay costs automatically. So, if I go and show my insurance card to the doctor, it takes directly from the HSA before I have to pay, so as long as I have money in the HSA, I don't actually pay anything at the doctor.
Posts: 2223 | Registered: Mar 2008
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posted
That's really nice. We've been providing our clients with FSA debit cards for years now, and I was just told we get them next year as well. It really makes it nice.
I really wish I could contribute to an HSA though, they really are the best deal. Not only can they roll over from year to year, but it can accrue interest and is treated the same way as other investments. If you pass on and there is still money in the HSA, your children can use whatever is left. (Not sure if they can continue to contribute to it though)
Posts: 1937 | Registered: Nov 2006
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Keep in mind that if you DON'T spend the amount in your HSA by the end of the year, you forfeit the remained. I lost about $1000 my last year with JCPenney's because of that, and because they blocked out the "spending window" before the year was out.
Posts: 15082 | Registered: Jul 2001
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That's true of a FSA (flexible spending account or "cafeteria plan"). It's not true of a HSA attached to a high-deductible plan. Those roll over, as Geraine said.
Posts: 9866 | Registered: Apr 2002
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posted
I have an HSA on a high deductible plan and used to work for an insurance brokerage company that heavily pushed our clients to go for HSA's and I am not a fan. If people behaved perfectly rationally, I think HSA's often are the best financial deal for individuals. But because people (myself included) are not perfectly rational, HSA's are almost always the best deal for your company.
Psychologically, there is a huge difference between having more deducted from your paycheck and then only having to pay $10 to go to the doctor than there is from having less deducted from your paycheck and having to pay $100 to go to the doctor. While on a high deductible, I find myself thinking that I don't *really* need to go to the doctor for $100 (and if they run any tests, who knows how much more), whereas if it was $10 flat I wouldn't hesitate. So that's just my experience. Everybody thinks differently and an HSA might be a perfect fit for your family.
Posts: 1947 | Registered: Aug 2002
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This is the first year I'm not using my companies High Deductible plan with HSA. This is the first year when it hasn't been the most economical plan for us, and I think that was just "chance". They raised the deductible and lowered some of the costs for the regular PPO, so it shifted costs to where the regular PPO was a better deal.
Whether or not this works for you is extremely dependent on exactly what the costs are and what the coverage percentages are. Sometimes the HDPs are a really great deal, sometimes less of a great deal. Prior to this year, our HDP actually covered 100% of everything except prescriptions once you hit your deductible, and had a much lower copay for prescriptions than the regular PPO after the deductible. So it turned out to be pretty awesome even if you had major health issues. I could calculate almost exactly what I'd end up paying in healthcare costs for the year.
I didn't find the psychological effect that Amanecer is mentioning to be at all problematic, but that may have been because I expected to hit the deductible. It didn't matter if it cost $115 to take my kid to the doctor because he was sick, since it just meant that I'd hit the deductible faster, and specialist appointments later in the year would be covered by the insurance instead of having to pay out then.
My main problem with the HDP/HSA route was really just one of cashflow, and I don't think that would really have been an issue if I'd been expecting it. Before I got into the HDP/HSA, I'd always used an FSA. With an FSA all of the deposits you are expected to make over the year are available to be spent on day 1 (or at least that was the case for my FSA's). With an HSA, you only have available what has actually been deposited. That means, the very first time you start an HSA, you have to be prepared for the fact that you might have to pay "out of pocket" for any medical costs at the beginning of the year. This isn't usually a problem after the very first year though, since unlike an FSA, the HSA funds aren't "use them or lose them" - so you'll often have funds deposited last year that are available for use this year.
I think if you've run the numbers for yourself, and the HDP is cheaper for your family, then do the HDP.
Posts: 1321 | Registered: Jun 2006
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quote:Originally posted by scholarette: Thanks. They actually have a calculator on the webpage where you can put in expected charges and I tried a bunch of different things and I kept coming up with some savings on the higher deductible plan. Which is why I was very surprised when everyone my husband talked to was vehemently against it. I figured there must be something important I am missing. The HSA is only allowed with the high deductible plan. It also is set up to pay costs automatically. So, if I go and show my insurance card to the doctor, it takes directly from the HSA before I have to pay, so as long as I have money in the HSA, I don't actually pay anything at the doctor.
I think part of the problem here is how people interpret "High Deductible Plan"
Until about 4 or 5 years ago, "High Deductible Plan" meant something quite different. Then Congress passed legislation on what exactly qualified as High Deductible and allowing Tax-Exempt HSA's only for High Deductible Plans.
Before that happened, High Deductible Plans usually had Deductibles of like $5k-$15k per individual. Even then, alot of them only covered hospital costs after the deductible. They really were just there to protect you from having some terrible unexpected disaster from totally bankrupting you. They didn't really provide anything in terms of preventative healthcare.
Since the legislation, the deductibles on HDPs have become alot more reasonable. They typically vary from between $1k-$3k per person, usually somewhere between $3k-$8k for a family. It isn't that bad a deal, especially if the deductible on your plan is toward the bottom end of the spectrum. HDP's now typically offer the full range of "normal" insurance benefits once the deductible is reached, sometimes even offering better coverage after that point than the typical PPO. They also tend to cover your basic preventative healthcare at 100% even before the deductible - so an annual woman's screening, annual well checks for kids, and standard pediatric immunizations are covered even before the deductible is met.
Deciding between an HDP and a regular PPO now is really much more of running the actual numbers on your plan options with your needs as a family. In most cases, the HDP is actually way cheaper with minimal additional risk. Many people though still hear the words "high deductible" and see themselves getting that $9,000 ER bill!
Posts: 1321 | Registered: Jun 2006
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