Friday, April 2, 2021

A $10,000 Headache

I’ve received a number of questions from people asking about my experience with short term health insurance (our current plan). I responded with the truth (worked as planned, we’ve been healthy, yada, yada, yada) but we’ve never had a good test for our plan. Well, that recently changed and I wanted to share the details with you.

What Happened?

The good news is I’m fine. The bad news is that my wife called an ambulance because what started as a severe headache turned into severe disorientation and me not making any sense. Obviously, my wife was concerned that what we thought was a migraine might actually be a stroke, or worse, when I couldn’t answer basic questions. Sending me to the hospital was the right thing to do. As you might assume, the ER sprung into action and ran a number of tests to determine if something more serious was going on. The CT scans and MRIs ultimately were clear and the issue was an atypical migraine. I received treatment, and after a longer period than the team in the ER expected, I regained some level of normal thought. I left the hospital just short of a 24 hour stay.

This was an extremely scary situation filled with uncertainty. While I’ve had a handful of migraines in my life, I’ve never experienced something that limited my ability to think and answer basic questions. I was provided with some pills that should help address a migraine if I feel one coming on in the future. I can assure you I was not thinking of the costs I was incurring when I could not identify what day it was!

So, What Health Insurance Do You Have Again?

I’m glad you asked because the hospital certainly did as well. As you might recall from this post, we transitioned to short term health insurance from United Healthcare in 2019. 2019 and 2020 went by with no major health issues (we were fortunate with COVID!). So, in 2021 we did our normal health insurance evaluation and quickly agreed on another year with short term health insurance. We’ve been blessed with good health and our medical needs have been minimal. The details of our plan for 2021 are below:

Plan Name

Deductible

Lifetime Benefit

Coinsurance
(Insurer/Us)

Coinsurance Maximum

Maximum Out of Pocket per Person

Maximum Out of Pocket for Family

Annual Cost

Cost per Month

United Healthcare One - Short Term Medical Plus Elite  - $12,500

 $12,500

$2,000,000

 100/0

 $-  

 $12,500

 $62,500

 $4,668

 $389

The key number to remember in order to keep up with the story is the $12,500 deductible. This means we need to pay $12,500 before our health insurance covers any costs. Oh, and with the short term insurance there is a $12,500 deductible per person…remember that when you see the Obamacare plan comparison below. Of course, we receive the rate negotiated with our insurer, which is less than if we paid out of pocket, but our insurer won’t fully pick up the tab until we spend $12,500. It’s also worth noting the $389 cost per month.

Another piece of information you’ll need to understand the full story is what our alternative would have been with Obamacare (i.e. buying insurance through Healthcare.gov). Similar to our 2019 choice, in order to utilize our existing providers, we would have needed a plan through Oscar and this would have been our cheapest option:

Plan Name

Deductible

Lifetime Benefit

Coinsurance
(Insurer/Us)

Coinsurance Maximum

Maximum Out of Pocket per Person

Maximum Out of Pocket for Family

Annual Cost

Cost per Month

Oscar Simple Bronze

 $7,300

 Unlimited

 100/0

 $-  

 $8,550

 $42,750

$18,672

 $1,556

Keep in mind the deductible here is per family, whereas the short term plan we have is a $12,500 deductible per person. Now, let’s compare this against our short term plan. We have a lower deductible of $7,300 but a much higher cost per month at $1,556.

So How Much Did This Cost You?

The cost of being admitted to the ER, spending 24 hours in the hospital, CT scans, a MRI (a quick one because I tapped out due to being claustrophobic!), visits from a number of doctors/specialists, a special IV that quieted the migraine and one awful breakfast mush meal was approximately $10,000 based on negotiated rates with my insurer. Actually, the hospital’s suggested retail price before insurance was closer to $19,000. Isn’t this system great? Our health systems have created a list price so high that even when you have to pay $10,000 for something like this you can say you’ve saved $9,000 by having insurance. It works something like this:

Hospital: Hey, let’s just make the full retail price so high so that when we negotiate rates with insurers we make them feel like they are getting a huge discount and adding a ton of value. Plus, no one will see these prices until after they’ve been provided the service so it’s not like we really need to compete.

Insurer: We don’t love your high prices because we need to pay more for our sick patients. However, at the same time, your artificially high prices allow us to show consumers we’ve saved them a lot of money with our negotiated rates, which allows us to charge them more. In fact, we can make a lot of money and then just blame the healthcare providers as the problem…it’s actually kind of nice.

(Most) Consumers: Wow, thank goodness I had insurance because it saved me a ton of money. Since my employer pays for most of my low deductible insurance plan I don’t even really know how much my insurance costs. They just suck it out of my paycheck!

In a bit of foreshadowing, you’ll see my primary gripe after this experience remains the high cost of the actual health services provided.

Oh My Gosh, Don’t You Wish You Had Obamacare Now!

Well, yes, if we had a subsidy from the government that covered the cost of a low deductible health insurance plan then it would be great to have an Obamacare plan. The problem is we don’t have a subsidy so even with $10,000 in medical bills for a headache we should still come out ahead financially vs. if we would have signed up for a plan via Healthcare.gov. Let’s walk through the numbers and examine this!

The Short Term Health Insurance Atypical Migraine vs. The Obamacare Atypical Migraine

Let’s run some numbers through March to start the comparison:

 

Short Term Insurance

Obamacare Plan

Monthly Premium Costs through March

$1,167

($389 x 3 months)

$4,668

($1,556 x 3 months)

Medical Costs through March

$10,000

$7,330

Assuming we would have only had to pay our deductible amount

Total Costs through March

$11,067

$11,998

 The short term insurance costs $931 less through 3 months but what about the rest of the year? With the Obamacare plan we wouldn’t have any more out of pocket costs since we’ve reached our deductible. With our short term insurance each member of the family must reach their deductible so there’s a lot of uncertainty. Let’s compare our premium costs for the rest of the year:

 

Short Term Insurance

Obamacare Plan

Monthly Premium Costs for April - December

$3,501

($389 x 9 months)

$14,004

($1,556 x 9 months)

 The difference between these monthly premium costs is $10,503. Thus, for the Obamacare Plan to have been more economically feasible for us this year we’ll need another health issue that costs us over $11,434 ($10,503 + $931). Now, if that other health issue is with me I’ll only need to pay an additional $2,500 since I’ve already paid $10,000 towards my $12,500 deductible. If the health issue is with one of my family members we have the full $12,500 in front of us.

We also have the thorny issue of pre-existing conditions with short term insurance. Now that I’ve had an atypical migraine I suppose my insurer will consider that as a pre-existing condition. What would happen if the preventative pills I was prescribed don’t work and I end up hospitalized for a similar episode? I’ll save you the suspense, I doubt they’d cover anything…pre-existing condition!

Based on our health history we are unlikely to have another severe medical issue, but I was also unlikely to be admitted to the ER for an atypical migraine!

So What Did We Learn?  

I’m not sure we learned anything new but we certainly confirmed some of what we already knew:

The high cost of medical services is the main problem. $1,000 for a 15 minute visit from a specialist. Thousands of dollars for a CT scan. The prices we are charged make no sense. There is a significant pricing failure amongst healthcare providers.

Our short term insurance plan operated as advertised. To be clear, there are a lot of short term insurance plans that are of poor quality and there are also a lot of people who don’t know what they are getting into when they buy one. However, in our case we knew what we were getting into and can say our plan operated as described. I remain a proponent of providing consumers the ability to purchase basic plans like short term insurance. They are not perfect but there’s a lot of “not perfect” to go around in healthcare.

It’s complicated. It’s too easy to say Obamacare is awful and is government overreach. It’s too easy to say short term insurance is awful and predatory. It’s too easy to say health providers just need to lower their costs. The system is so far broken that there’s no “one size fits all” solution. Like most debates these days we tend to over simplify and not think critically.

Thankful we did not have Liberty. We are a few years removed from working with Liberty Healthshare, but if the issues we faced are still around I can’t imagine how stressful and complicated it could be to get reimbursed for this type of medical issue.

 

One last thing: As I was writing this article Freakonomics happened to release Episode 465 of their excellent podcast. The title of the episode: How to Fix the Hot Mess of US Healthcare. Seems about right.


Friday, January 3, 2020

Visiting From the New York Times Article?

On January 2, Reed Abelson of the New York Times published an article about Christian healthshare ministries and featured a quote from me, as well as a link to this blog. Regardless of your personal political views, I hope this blog can be a resource for you in making an informed choice regarding your health insurance needs. 

This is a fact-based, practical blog, chronicling our experience. Your experience may be, or could be, different. I believe individuals owe it to themselves to do the research, which at times is not easy, before making a decision on their health insurance needs. 


If you have any questions I can offer a perspective on please feel free to write. I wish you the best of luck in making the best healthcare choices for you and your family (I wish it was easier)!

Sunday, March 24, 2019

Final Update and What's Next

A quick post to let you know what we've been up to since the start of 2019. As documented we moved to a short-term health insurance plan from United Healthcare. We had our first appointment (a wellness visit for one of our children) and the plan worked as it should. We received a discounted rate based on United Healthcare's negotiated rate with our healthcare provider then, based on our plan's structure, paid the difference via a bill we received from the healthcare provider. It was nice to experience the simplicity of an insurer that works with our healthcare provider once again. 

As far as our relationship with Liberty, although we are no longer members we are still trying to obtain reimbursements for our 2018 bills. Unfortunately the level of complication, even for a flu shot reimbursement, has reinforced our decision to move on. The level of stress we would feel working with Liberty on an extensive medical procedure is not worth the monetary savings. At this point, we have essentially written off receiving reimbursement for our remaining expenses. We'll continue trying but feel it's more likely reimbursement will never come...or will just come very slowly.

What Happens to this Blog?

Based on our own searches this blog remains one of the most detailed accounts of a family working with Liberty. For that reason, we will keep the blog live so others can utilize this information in making an informed decision on their health insurance choice. Regardless of when you arrive here, if you have any questions feel free to use the Contact Us button. We continue to research health insurance options for the self-employed and enjoy hearing from readers. Best wishes for your on-going health and wellness!

Quick Update: Our flu shot bills got sent to a collection agency because Liberty has still not paid. We quickly paid the bills through the collection agency. I have written off any reimbursements from Liberty. Folks, this was flu shots...flu shots! What would happen to you if it was something serious?

Another Update: In what will go down as the most surprising trip to the mailbox in recent history we received a reimbursement check from Liberty last week. Now, the downside is we received the payment in June of 2019, a full six months after we stopped using Liberty and countless months after the actual expense. That said, we did get a check. We still need to see which of our un-reimbursed expenses it was covering but, hey, we give credit where credit is due...and we did get a check!

Sunday, December 16, 2018

Our Choice for 2019

As of January 1, 2019 we will no longer be Liberty Healthshare customers. Our experience in 2018 didn’t instill any confidence that a more complex medical situation would be covered by Liberty. And if it would be “covered” it wouldn’t be covered completely or in a timely manner. With the expansion of short term health insurance options in Ohio we saw this as a viable option. Thus, our 2019 health insurance will be the following plan from United Healthcare (Golden Rule Insurance):

Short Term Medical Plus Elite A - $2M total benefit per person, $5,000 deductible per person, 0% co-insurance and $0 co-pay after deductibles

This plan cost $3,739 for the year, which amounts to about $311 a month. This included a $20 one-time application fee. We felt this met our criteria and the fact our health care providers accept this insurance was a huge benefit. These insurance policies certainly present their own degree of risk so it’s not full proof but we’ll be happy to share our experience with short term insurance.

We still have a few posts to share more information about our Liberty experience. We feel it’s important to share all the details to anyone who may be looking at Liberty in the future. Our goal is to simply present all the facts about our Liberty experience. Whether someone chooses to work with Liberty in the future is a personal decision but at least they’ll have our details as an input.

As for canceling with Liberty? A pretty straightforward experience. You need to notify Liberty by the 20th of your last month. We did need to report a reason for leaving which we record as follows:

Reason for Cancellation: The administrative burden of working with a health care provider that does not bill directly to Liberty. Then the subsequent lack of clarity on where our bills stand and delay in reimbursement from Liberty. The administrative burden was extensive for just basic wellness visits so we were not confident a significant medical incident would be adequately covered. “

Interestingly enough we did see a flurry of activity with our outstanding bills after this cancellation. We still have not received our two outstanding “lost in the mail” reimbursements. We hope we’ll still be able to work with Liberty to re-send these checks after the 60 day period is up for “lost” checks.


So what happens to the blog? We still have more work to do to share our full experience and there are more details to share. We’ll also share some details about our short term health insurance experience. Stay tuned and please let us know if you have any questions!

Thursday, December 6, 2018

A Check has Arrived

For those following along with our Case of the Missing Reimbursements, we can confirm that we received one of our checks. It looks like the check sent on November 21 successfully worked its way through the postal system to our mailbox. No sign of the other two checks Liberty indicates were sent. It looks like those were truly “lost in the mail”. Although it is certainly a little curious that a check sent by Liberty, to the same address, presumably using the same process, was delivered to us successfully despite the other checks not arriving.


Since I’m a naturally curious person I Googled, “how often do things get lost in the mail”. I could not find a perfect answer but most references cited somewhere south of 1%. Thus, what extremely bad luck that the checks lost in this case are for someone who decided to chronicle their entire experience on a blog (but in fairness, a blog that might not have the most impressive reach)! To be balanced it's possible that 99% of Liberty customers (per the odds) have no issue ever with payments getting lost in the mail. We’ll stay on the case and let you know when we find those missing payments!

Thursday, November 29, 2018

Barely Missing Out on ACA Subsidies? This Unique Approach Might Work

I’ll say up front that the approach we’ll describe here doesn’t work for everyone but it’s worth sharing…especially if you are in a situation where you are just over the point of receiving a subsidy! If you’ve stumbled upon this blog you are likely in a situation similar to ours: self-employed and ineligible for ACA subsidies. There are two choices when you find yourself in this situation:

a)    Freak out and Google “self-employed health insurance alternatives” and end up on a blog like this, or

b)    If you are a personal finance nut like me, try to figure out how you might make adjustments to your tax deductions to actually start qualifying for a subsidy

Trust me, we spent a lot of time thinking about (b) before moving on to (a). In fact, prior to becoming self-employed we performed a lot of analysis based on different income situations. As part of this research, we submitted a question to Justin at the Root of Good Financial Independence Blog. It resulted in a much more detailed post on the subject than I’ll describe here. Don’t Fall Off the Affordable Care Act Subsidy Cliffs is a fantastic analysis of how you might control your Modified Adjusted Gross Income (MAGI) on your taxes to qualify for a subsidy (MAGI is the official income line item the subsidies are based on). I was the “Don” (name changed to protect the innocent) who submitted the question and it was because I was thinking of the strategy we’ll highlight here. If you find the summary I’ve posted here interesting please be sure to check out the more detailed post at Root of Good.

Some Basic Background

Your eligibility to achieve a subsidy under the Affordable Care Act (ACA) is based on your income…but what income? If you’ve ever looked at a 1040 tax form it can be complicated. There’s the gross income you received as a self-employed individual, then the income after your business deductions, then income after the standard deduction and other non-business deductions. For example, on the Health Insurance websites it will ask you, “What is your Income?” If you are entering your gross income you are entering too much. Your subsidy is based on your Modified Adjusted Gross Income (MAGI), which for most people is just your Adjusted Gross Income (AGI) – line 7 on the updated 2018 1040. Here’s the link from Healthcare.gov to learn more about AGI.

The other part of the subsidy formula is the number of individuals in your household. Simply put, the more individuals in your household the higher your income can be to qualify for a subsidy.

So What if My AGI is a Little Too High for a Subsidy?

The first thing you may be wondering after reading the above is, “Great, but how do I know what my AGI needs to be to qualify for a subsidy?” This comprehensive article at Healthinsurance.org includes an updated table showing the levels of subsidy by income and size of household (it’s the same type of table referenced in the Root of Good blog post I mentioned above but it is updated for the current year).

If you find yourself teetering on the “ACA cliff” and need to reduce your AGI without actually reducing what you earn that’s where the Health Savings Account (HSA) and Self-Employed 401K can help! Both of these accounts allow you to contribute pre-tax dollars to pay for medical expenses (in the case of the HSA) or retirement (Self-Employed 401K). So let’s illustrate this in a simplified example:

Let’s say you and your wife are both self-employed and earn $85,000 (after business expenses). According to the chart I referenced at Healthinsurance.org, subsidies officially phase out at an AGI of $65,840 for a household of two. Your initial reaction is to start Googling alternatives. But wait, let’s say you are a saver, open to getting creative and do the following: (a) contribute to an HSA and (b) contribute to a Self-Employed 401K enough to qualify for a subsidy. For clear demonstration purposes let’s assume you max out each of these contributions. Here’s what this looks like:
  • $85,000 Initial Adjusted Gross Income
  • Less: $6,900 Health Savings Account Contribution (this is the maximum 2018 contribution)
  • Less: $55,000 Self-Employed 401K Contribution (this is the maximum 2018 contribution per person)
  • $23,000 New Adjusted Gross Income for Calculating Subsidy

In this example we’ve gone to the extreme – we are now clearly in subsidy territory according to our chart. Of course, it might not be realistic for many people to make this type of contribution (on this level of income) but even if you just reduced AGI by $20,00 in this example your ACA plan would at least include some subsidy.

But This Just Isn’t Practical!

We’ll fully admit this might not be achievable for many people. However, if you spend less money than what you make (a practice we’d recommend!) you are a prime candidate. If you earn $85,000 and spend $85,000 then putting aside any money to reduce AGI is probably unrealistic. However, even if you earn close to what you spend, but have savings, you might be able to make this work. For example, if you reduce your AGI by $20,000 using these techniques you have $20,000 tied up in a retirement account or HSA (not bad places but not accessible for your daily expenses). If you had $20,000 in savings you could re-purpose those savings for your routine spending while the $20,000 you used to reduce AGI starts growing in an HSA or 401K account.

Of course, another reason this might not be practical is if you simply earn too much income. A nice problem to have and it’s possible even maxing out these deductions to AGI wouldn’t get you into the subsidy threshold.

In Closing

Our purpose in posting this is to make sure you are considering all options during annual enrollment. There are some fantastic calculators out there to estimate your subsidy under different levels of AGI. We understand it may not be practical for everyone but it’s an interesting approach for the savers out there! The links in the article should be great resources to get you started in your research!


The linked resources in this article are far more detailed than what we’ve provided here. Nonetheless, hopefully it helps a few people think more creatively (financial and tax planning pays off!). If you have any questions on this strategy, the accounts described, etc. please let us know!

Wednesday, November 28, 2018

The Case of the Missing Liberty Reimbursements

Well, we called Liberty again to check in on two checks that, according to our ShareBox, had been issued to us on November 1. We verified our address with the woman we spoke to and everything matched perfectly. At the time of our call, we were about 3 weeks out from when Liberty (according to their own records) issued the check. Naturally, the US Postal Service was blamed for the delay. It must’ve gotten lost in the mail is becoming the equivalent of the dog ate my homework. The good news is it looks like our call on November 20 triggered activity on a third payment, which was sent on November 21, per our ShareBox. Thus, we’re set up for an interesting experiment – which reimbursement will arrive first? Will either arrive at all? These are the same payments we had to call about just to get processed (so it took a while to just get the checks issued…assuming they actually were).

When we asked if they could just cancel the checks and re-issue new checks we were told that the policy is to wait 60 days before new checks could be issued. Naturally, that policy couldn’t be adjusted in this situation (it is, after all, a “policy”) so we continue our wait. If they weren’t issued, and it’s a way to conserve cash, we were hoping our call might have triggered some action.


On a side note, according to Google Maps, we are exactly 50 miles from Liberty Healthshare’s HQ’s – these aren’t being sent cross country. Of course, we pride ourselves on trying to be balanced…it’s possible the checks did get lost in the mail so we’ll keep you updated.

Tuesday, November 27, 2018

Our 2019 Liberty Option

Despite the fact we started with Liberty Healthshare, and most of our earliest posts provide a tremendous amount of detail on Liberty, it’s worth rehashing the highlights as we head into 2019 (as a formality at least!). The main thing that’s changed is the cost so let’s compare last year to where things currently stand:

Year
Monthly Share Amount
(Comparable to the Monthly Premium)
Annual Unshared Amount
(AUA – Comparable to the Deductible)
2018
$450 for a family with parents 30-64 years old
$1,500 for a family
2019
$529 for a family with parents 30-64 years old
$2,250 for a family

Note: There is a $75 annual renewal fee as well.

Beyond the change in price there aren’t many changes for 2019:

  • $1M per incident is eligible for sharing
  • Pre-existing conditions are not covered in the first year but coverage can be phased in over multiple years (see guidelines)
  • Prescription drug coverage is not included (although the SaveNet program offers a discount we found less competitive than programs already offered by name brand pharmacies and GoodRx.com.

This is a quick recap of the plan that we would go with from Liberty Healthshare. If you are an individual, couple, or interested in plans from Liberty you can find a lot more details by visiting Liberty’s website.


Are you considering Liberty in 2019? If so, do you have any questions or concerns you’d like feedback on? If so, leave a question and we’ll try to answer it (and if we can’t I’m sure someone else will)! 

Saturday, November 24, 2018

Are Short Term Insurance Premiums Deductible for the Self-Employed?

As we’ve mentioned, there were recent changes in the duration in which short term health insurance plans could cover individuals or families. Prior to these changes, they were meant to bridge participants between employment and were only available for 30-90 days. Thus, we never really considered these plans prior to this year and certainly never considered whether premiums for these plans would be deductible for self-employed individuals. Given we are self-employed and now considering these plans we figured it was a good time to answer this question and confirm premiums are deductible.

So let’s go to Publication 502, Medical and Dental Expenses (admittedly the 2017 version). Here is what it says regarding insurance premiums you can’t include in your deduction for the self-employed:

Insurance Premiums You Can't Include

You can't include premiums you pay for:
  • Life insurance policies,
  • Policies providing payment for loss of earnings,
  • Policies for loss of life, limb, sight, etc.,
  • Policies that pay you a guaranteed amount each week for a stated number of weeks if you are hospitalized for sickness or injury,
  • The part of your car insurance that provides medical insurance coverage for all persons injured in or by your car because the part of the premium providing insurance for you, your spouse, and your dependents isn't stated separately from the part of the premium providing insurance for medical care for others, or
  • Health or long-term care insurance if you elected to pay these premiums with tax-free distributions from a retirement plan made directly to the insurance provider and these distributions would otherwise have been included in income.
  • Taxes imposed by any governmental unit, such as Medicare taxes, aren't insurance premiums.

Coverage for nondependents
Generally, you can't deduct any additional premium you pay as the result of including on your policy someone who isn't your spouse or dependent, even if that person is your child under age 27. However, you can deduct the additional premium if that person is:

Your child whom you don't claim as a dependent because of the rules for children of divorced or separated parents,

Any person you could have claimed as a dependent on your return except that person received $4,050 or more of gross income or filed a joint return, or

Any person you could have claimed as a dependent except that you, or your spouse if filing jointly, can be claimed as a dependent on someone else's 2017 return.


We see nothing in this publication regarding short term health insurance premiums. Of course, we see nothing about healthshares either but I think it’s clear that this is not insurance. We’ll continue to research but our initial research indicates we could make the deduction. Anyone out there finding anything different (or even caring)?

Thursday, November 15, 2018

Our Short Term Insurance Plan Options from United Healthcare

The short term health insurance plans we will describe below are all from United Healthcare (www.uhone.com). Actually, they are from Golden Rule Insurance Company which is a United Healthcare subsidiary. We are also reviewing plans designed for Ohio, and as mentioned, your state may have different options available. We reviewed short term plans on www.ehealthinsurance.com and kept coming back to the plans from United Healthcare primarily because our health provider is in network, but also because their plans offered flexible options including deductibles and co-insurance. You can build a bit more robust plan than most short term plans we saw available.

Choosing a Maximum Benefit

The first choice is to consider the maximum benefit you’d like covered. United Healthcare offers two options: $600,000 per individual or $2,000,000 per individual. In our situation, we’d prefer more robust coverage so we’ve only looked at $2M benefit plans. This means that any costs about $2M (per person) would not be covered.

Selecting Coinsurance

The next thing you have the option of choosing is your coinsurance. Coinsurance is the amount of money you’ll pay out of pocket after your deductible. United Healthcare offers the following options:

Plan Name
Coinsurance
Coinsurance out-of-pocket maximum
Value Select
30% or 40%
$5,000 or $10,000
Plus Select
20% or 40%
$2,000 or $5,000 or $10,000
Copay Select
20%
$5,000
Plus Elite
0%
$0

The coinsurance out-of-pocket maximum is the max you could pay, per person, in co-insurance. Thus, if your per person deductible is $5,000, and your coinsurance out-of-pocket maximum is $5,000, the max you could pay is $10,000 per person (assuming you do not exceed the $2M maximum benefit). Obviously, the price of the plan is dependent on the coinsurance chosen. 0% coinsurance would be more expensive than a plan with the same deductible but 30% coinsurance.

We are leaning towards a 0% coinsurance plan. In theory, since we don’t think we’d even use our deductible we should gravitate towards a higher coinsurance (since you don’t pay it until you hit your deductible). However, we’d also like to maintain some conservatism and we love the simplicity of not having to deal with coinsurance once we hit our deductible.

Deductibles

Plans have the following deductible options per person:  $1,000, $2,500, $5,000, $10,000, $12,000. Since these are per person we’d need to multiply our deductible times 5 to determine our total out-of-pocket cost assuming we had 0% coinsurance. You can mix and match these deductibles with the coinsurance options described above. If we compare these deductible amounts to what we paid for medical costs in the current year we would not even reach the $1,000 deductible per person. Assuming that’s the case again in 2019 (you know what happens when you make assumptions though...) you could argue that we should just choose the $12,000 per person deductible since it’s unlikely we’d hit any deductible amount. We are still uncertain what deductible we’d choose so we’ll run the costs for multiple options in this post and understand whether the savings is worth the risk.

Copays

Copays are popular in many insurance plans for routine doctor visits. Some plans cover “preventative wellness visits” for free while others might charge a copay. The United Healthcare Copay Select Plan offers 3 $50 copays for “history and exam” visits. Thus, we could take each of our boys for their annual check-ups and pay just $50. The copay plans require 20% coinsurance and a $2,000 out-of-pocket coinsurance maximum. This plan is best for families who would need multiple wellness visits and are comfortable assuming the coinsurance. This is an option we’ll include in our analysis.

Comparing the Cost of the Plans we are Considering

Below are the plans we are considering, all have a $2M maximum benefit per person and 360-day duration (maximum allowed in state of Ohio):

Deductible
Coinsurance
Copays
Annual / Monthly Cost
$12,500
0%
None
$2,382 / $198
$5,000
0%
None
$3,545 / $295
$2,500
0%
None
$4,459 / $372
$12,500
40%, $10,000 out of pocket max
None
$1,648 / $137
$5,000
40%, $10,000 out of pocket max
None
$2,455 / $205
$2,500
40%, $10,000 out of pocket max
None
$3,085 / $257
$12,500
20%, $5,000 out of pocket max
3 Exam and History Only
$2,097 / $175
$5,000
20%, $5,000 out of pocket max
3 Exam and History Only
$3,122 / $260
$2,500
20%, $5,000 out of pocket max
3 Exam and History Only
$3,925 / $327

You can see there is a wide variety of plans available (we’ve only considered a small subset above). We evaluate the following when thinking through a deductible amount: (a) out of pocket cost we could afford in a worst-case scenario (and by “afford” we mean pay for and not have a panic attack) (b) likelihood that a severe illness or injury would occur given our history.

We haven’t made a choice for 2019 yet but we will share the short term plan(s) that made our final evaluation when we unveil our final decision!


NOTE: All of the annual costs listed above are based on making a single annual payment. The monthly costs are based on dividing that number by 12. There is a nice cost savings if you make a single annual payment as opposed to paying monthly. Thus, your monthly costs will be a bit higher if you don’t make the annual single payment as we’ve represented.