Can you all help me compare some health insurance options? I'm ignorant.

[PlanetaryOrbit]

My employer is offering different health insurance options to choose from.

I'm in my late 20s; reasonably healthy. Don't smoke or drink. Have no family; this health insurance covers me only.



Plan A, which costs me $400 more per year in premiums than Plan B:

Copay for pretty much all medical services of any sort: 80% after deductible, if in-network, 60% after deductible, if out-of-network
Annual out-of-pocket maximum: $3,000 in-network, unlimited out-of-network
Annual deductible: $1,500 in-network, $1,500 out-of-network
Non-network liability (don't even know what this means): Unlimited



****************************************************



Plan B, which costs me $400 less per year in premiums than Plan A:


Copay for pretty much all medical services of any sort: 70% after deductible, if in-network, 60% after deductible, if out-of-network
Annual out-of-pocket maximum: $5,000 in-network, unlimited out-of-network
Annual deductible: $2,000 in-network, $4,000 out-of-network
Non-network liability: Unlimited



Which do you think I should go for? And are these "good" health insurance plans, in terms of benefits, in your opinion? Mediocre? Lousy?


Also, why is the out-of-pocket maximum a set, fixed amount (i.e., $5,000,) but the non-network liability is "unlimited?" Is that a contradiction, or am I totally misunderstanding the meaning of "non-network liability?"

[boston bean]

1. If those are your only choices go with A.

It's always better to get the lowest deductible and it offers more peace of mind if something were to go wrong and you needed the insurance.

Both of your plans suck though. 80% coverage in network and 70% in network are sucky plans. You have to worry about an out of pocket cost for every single need.

[Travis_0004]

2. Plan B if you are healthy, plan A if not

This oversimplifies things, but what was your healh care expense this year? Anything planned next year?

How much would you struggle if you eneded up paying the 5k out of pocket?

[PlanetaryOrbit]

3. My health care expense this year was just a few hundred dollars.

If I ended up paying the $5,000 out of pocket, it would be a very big blow. I'm already carrying several thousand dollars of debt, have almost no savings, and this would worsen things a lot.

[Yo_Mama]

15. You need to find out about the network. If it is not comprehensive, then Plan A will bankrupt you.

Talk to your HR department and they should be able to get you the network details.

You need to look at hospitals and full coverage plans. What would happen if you got in a car accident, needed surgery, PT, and follow-up? Plan A may have a lower deductible, but you could well end up paying 50-300K of medical expenses on your own. AKA going BK.

The problem with the network stuff is even if you go to a network hospital, many of the doctors won't be in that network. Sometimes even the ER docs aren't. The radiologists, etc.

A lot of people aren't really insured at all.

Also, if you travel a lot, plans with very limited out-of-network coverage are suicide - you are essentially totally uninsured when traveling.

Insurance is supposed to cover a significant illness, and it looks to me that Plan A is not real insurance. I'd go for Plan B and start saving. Plan A is a "say a prayer".

What's breaking a lot of people now on medical costs are the network provisions - they find out that they are really uninsured when they have to use their coverage.

[Nuclear Unicorn]

4. Being in your 20s and assuming generally good health, you shouldn't need coverage for anything

except the unexpected. That should continue into your late 30s, early 40s.

I'm not sure why your out-of-network copays are lower. The idea is usually to set prices so as to keep you in network.

In order to get doctors to accept lower payment the insurance company promises to funnel them more patients via networks. It's a horrible cost control mechanism but that's another thread.

I would go for the lower premium unless your profession and/or lifestyle and/or general health carry significant risk of prolonged care. For routine care and the occasional sniffles I'd go to a cash clinic.

Try not to be unconscious if someone takes you to a hospital, otherwise you'll be ruined because there is no limit, according to either plan, to what you can be charged and there will be no one to argue on your behalf to bring down your obligation.

[PlanetaryOrbit]

5. Oh no

I think I meant coinsurance, not copay - the insurance IS paying more for me in-network.

[Nuclear Unicorn]

6. Fair 'nuff. My original suggestion still holds, I believe. nt

[mythology]

7. The reason the out of pocket max is unlimited for out of network

is to discourage you from using an out of network provider.

But to make an appropriate recommendation about which plan you should go for, you would also need to know if there are any benefit coverage differences.

In my case, I know I have a major surgery at the end of this year and then next year I'm going to have a million PT visits early in the year and several sets of x-rays/MRI scans over the course of the year. So I looked at what the plans offered in terms of PT visits and covered in the scans I'm going to need.

Also do either of your plans come with a rollover HSA that you could contribute to? That can also influence your choice. I have a friend who is in the position that she can afford to contribute the $3,300 max to that each year and for the years when she has a major health expense, she can pay out of that money which is also reducing her taxable income.

[Vinca]

8. Your post is one more reason for single-payer.

I listened to a discussion on a radio program about signing up for health insurance and, by and large, people are nearly as confused as they are doing income taxes. Health insurance should be as easy as my Medicare coverage. The card came in the mail. I signed it. I'm covered.

[Lurks Often]

9. You're covered for the first 80% of what Medicare allows

The other 20% is your responsbility unless you have additional insurance.

With relatively simple surgeries (gall bladder removal) and 3-4 days inpatient, you are looking at $50,000 and up for the total bill and $10,000 is your responsbility.

[Vinca]

17. I know that.

My point is I have automatic coverage without having to spend days filling out forms and dragging out old records. (As for the 80%, a $10,000 co-pay is chump change compared to what the insurance companies were charging for an older person with a pre-existing condition. My husband had a brief hospitalization this year and the co-pay was less than a month of the old insurance policy that had a gigantic deductible.)

[AngryAmish]

10. I would like to point out that I'm just plain ignorant.

[Lurks Often]

11. Plan A would be my choice

For about $40 more out of your monthly pay, you get better benefits of something unexpected happens.

If you end up in the hospital for a couple of days, Plan A will save you $2500

[Nye Bevan]

14. No, in that scenario Plan A would save $1600.

With Plan B the out of pocket payment would be $2000 higher but then there are $400 in premium savings.

[Lurks Often]

16. We could both be wrong

It would be $2100: $2000 out of pocket + $500 deductible - $400 extra in premiums= $2100.

Hmm, that begs the question is the deductible part of the out of pocket, although it usually is.

Anyway, it saves anywhere from $1600 to $2100 depending on how the actual language in the plan reads

[mercuryblues]

12. I would

go for plan A. I would also find out what hospitals near you are in network. Going to an in network hospital alone could save you thousands of dollars on healthcare.

My healthy son had an appendectomy almost 10 years ago. It cost way over $10,000.
My healthy spouse broke a rib about 4 years ago. The trip to the ER was $3,000.
A different healthy son fell and hit his head real bad, knocked him out. That trip to the ER was $5,000.

[Nye Bevan]

13. I crunched the numbers in Excel,

and as long as your medical bills are less than $2000 for the year, Plan B will save you money.

If your medical bills are between zero and $1500, Plan B will save you $400 (the premium difference).
If your medical bills are $1800, Plan B will save you $160.
If your medical bills are $2000, it's a wash.
If your medical bills are $2500, Plan A will save you $50.
If your medical bills are $5000, Plan A will save you $300.
If your medical bills are $10,000, Plan A will save you $1000.
If your medical bills are $12,000 or more, Plan A will save you $1600.

(all this assumes that you stay in network).

So it's pretty likely that Plan B is best for you, since you are reasonably healthy and it's probably fairly unlikely that your bills will total over $2000.

[Barack_America]

18. But, if possible, set aside the out-of-pocket maximum, and...

..if, you don't end up using it, put it towards retirement.

That's the approach I take with my family's insurance.

[Nye Bevan]

19. An HSA (health savings account) is great if you have money to contribute.

Contributions are fully tax-deductible, never forfeited, and are tax-free when withdrawn to pay medical expenses (such as deductibles and copays). You need to have what the IRS classes as a "high deductible health plan" in order to be allowed to have an HSA, but both Plan A and Plan B should qualify.

[PlanetaryOrbit]

20. Thanks!

That's the math help I needed.