Our Health Insurance Will Be Changing Again Next Year

The past few years have seen a different assortment of health care options for our family:

  • 2012 – We were covered under a PPO
  • 2013 – We converted to a High Deductible Plan with a Health Savings Account Option.
  • 2014 – We had an HMO

Now that 2015 open enrollment is here, it looks as if we will be converting back to a High Deductible Plan with a Health Savings Account.

Talk about back and forth.

The reason we’re doing so much switching has largely to do with our employer.  Prior to 2014, our company out-sourced all IT services, so we technically worked for a different company, and so we had to use their insurance options.

Starting January 1, 2014, we were brought in as direct employees, so we now had the options available to our ‘new’ company.  In 2014, the only real affordable option was an HMO.  But, starting next year, they are also offering a High Deductible Plan, and the cost savings look like they’ll be something we want to take advantage of.

Comparisons:

HMO:

Payroll deduction (2014): $170
Payroll deduction (2015): $175
Preventative Care: Covered 100% – deductible does not apply
Family Deductible on Other Services: $500
Co-Pay (Regular Doctor): $20
Co-Pay (Specialist): $40
Co-Pay (Urgent Care): $50
Co-Pay (ER): $150

High Deductible Plan:

Payroll deduction (2014): Not Available
Payroll deduction (2015): $65
Preventative Care: Covered 100% – deductible does not apply
Family Deductible on Other Services: $1,600 after employer HSA Contribution
Co-Pays all stay the same following the deductible being met.

The Nitty Gritty

The high deductible plan actually has a deductible of $2,600, meaning that outside of preventative care, we’d pay this out of pocket before the insurance company started paying.  However, our employer is contributing $1,000 to our HSA account this year if the option is chosen, so the effective total cost is $1,600.

In order to fully fund the maximum out of pocket, I’d have to contribute roughly $62 per paycheck.  Right now I contribute about $16 per paycheck toward an FSA.  So the net effect (less taxes) is that I’d have to contribute $46 more than today….but the cost of the plan is $105 less per pay period, so I’d actually have $59 less coming out of my paycheck than today.

Setting Expectations

Insurance is all about guessing and estimating.  This plan, of course, only saves us money if we stay relatively healthy and don’t use all of our insurance.  If one of us had a bad illness, a long hospital stay, an accident, or something else, we would likely have to pay the full $2,600 plus co-pays and percentage contributions.

But, we’re relatively healthy and looking at our past few years of insurance needs, the odds say that we should go for the savings.

The nice thing about it is that if we don’t use up the money that we contribute toward our HSA, it rolls over and can be used in the future.  In fact, I think I still have an active HSA from 2013 with about $1,000 in it, so actually we’re more than covered.  The idea is that if you participate in this type of plan for a few years,  you build a cushion to cover in the event that one year sees unusually high medical expenses.

One thing that also makes me more comfortable is that when we participated in such a plan back in 2013, that plan had a much higher deductible ($4,500, I believe) and that employer contributed $0 toward our HSA.  So, we made it through that one just fine and this plan seems to provide a softer landing in the event of any major event.

What We Give Up By Switching To A High Deductible Plan

There are a few things that we give up.  My wife and I will both have to find new primary care doctors.  We currently pay a little more to qualify for a broader group of doctor’s in the area, but the new plan makes us take a step down.  The good thing for us is that our primary care doctor’s are the ones we use the least and are the most replaceable.  Our kids pediatrician’s office and my wife’s OB/GYN are in the new tier, which are the higher ranking ones that we’ve had longer relationships with.

Overview

The switch to the high deductible plan looks like it has a high probability of saving us money.  It looks like a solid plan, and since I’ve had experience with one before, I’m pretty comfortable making the switch.

Readers, how many of you are using a High Deductible Plan?  What’s your experience or feelings?  Do you think we’re making the right call?

 

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5 thoughts on “Our Health Insurance Will Be Changing Again Next Year

  1. It looks like a good choice particularly if you do not use the plan much. The difference in premium pays for higher deductible for at least one person. I use the flexible spending account and like using pretax dollars since, I will never meet the deductible threshold.

  2. We currently have a deductible that is $12,700, and we pay $323 a month for it. While we are both healthy, we know that we want children soon and we will be switching to a better health insurance plan soon just incase we run into any health problems with the delivery or with the future children (both of our sides have had many medical problems with newborns).

  3. I struggle to get myself to sign up for a high deductible plan…..although I’m pretty sure it would likely save me money – from an insurance perspective, I don’t like where I’d end up if we had a major medical situation. So…I tend to be OK with paying more for a PPO.

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