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. 

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