At the health insurance meeting I went to at my spouse’s employer last week, I found out that the company was going to start offering two options for health insurance plans – the plan we already had (which I am now calling the “traditional” plan) and a new high deductible health insurance plan. Naturally, the premium for the high deductible plan is less, about $20 less a week for us, or about a $1040 savings over the course of a year. Along with that, the high deductible plan has a health savings account, or HSA, attached to it, which my spouse’s employer will fund with $700 every year for employees who choose that plan (employees can choose to add more to it if they wish), bringing the total savings for us to $1740.
So, that high deductible plan sounds great, right? Well… not so fast. Rather than be sucked in by the flashy exterior, I needed to dig into the actual numbers to see what worked for our family. The person representing the health insurance company that was there to explain the plans and answer questions was quite annoying and a bit condescending. If it was my employer and not my spouse’s, I would have been a little more forthright with my opinion on what he was saying, but since it is my spouse’s employer, I asked mostly innocuous questions and refrained. The traditional plan was really characterized as the option for “less healthy” individuals who are not “proactive” in their health care choices. I’d like to point out that if we had had this high deductible plan when I was pregnant, we would have paid about twice as much out of pocket as we did with the traditional plan just from basic expenses related to childbirth, and I’m not sure when pregnancy became an indication of poor health. But, I digress… lets look at the general details of both plans.
The traditional plan has an individual deductible of $1000 ($2000/family) and an individual out-of-pocket limit of $3000 (which I hit with both my pregnancies/births) or $6000/family. It is a copay-driven plan, we pay $20 copays per doctors visits (well-child checkups and yearly adult checkups are free) and a $15 (generic) or $25 (name brand) copay on prescriptions. Copays do not count towards our deductible. After our deductible is met we pay 30% out of pocket until our out-of-pocket limit is met.
In contrast to that, the high deductible plan has a $3000/individual deductible ($6000/family) with a out of pocket maximum of $5000/individual ($10000/family). After the deductible is met, you pay 20% out of pocket up to the out of pocket maximum per year. There are no copays – everything counts towards the deductible. But that means until you meet the deductible, you pay the full cost of everything out of pocket. Including prescriptions.
And here’s where the math comes in. I have mentioned before that my spouse has asthma. He takes Advair daily to control his asthma. Advair at this point has no generic equivalent, and according to our pharmacy receipt, costs $174.99 per month. We pay a $25/month copay for it, or $300/year. If we chose the high deductible plan, we would pay $174.99 x 12 or $2099.88 a year for it. The high deductible plan saves us $1040 in premiums and a $700 contribution to an HSA for a total of $1740… so we come out behind before we even begin. $2099.88 (what we would pay for advair under the high deductible plan) – $300 (what we pay for advair under the traditional plan) = $1799.88 which is more than our savings ($1740) for choosing the high deductible plan.
So for us, it immediately from a mathematical point of view doesn’t make sense. Without that, I might have to do a more thorough analysis of the risk and benefit and really think things out. I would most likely at this financial juncture choose the traditional plan because we don’t have a lot of money to come up with the full costs of doctors visits and prescriptions, and with two small children it seems those types of things pop up rather regularly – but I can see why the high deductible plan would be attractive to someone who generally uses the benefits very little.