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Health Insurance Deductibles..?
Old 08-29-2010, 02:05 PM   #1
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Health Insurance Deductibles..?

Am having to make a decsion about my health care deductible. I have a private individual policy because I no longer have access to a group policy. Currently have Anthem Blue Cross/Blue Shield Flexible Choice.
I am 55 and my premiums have increased an average of 23% a year which has forced me to change policies the last 4 years or so ..and increased deductibles.
My current deductible is $2,500 with 0%/100% coinsurance. Increasing my deductible to $5,000 brings my premium down about $100.00 a month. Do I dare? Looks like moving to a different policy that carries 30%/70% coinsurance is just as risky.
I was shocked when I moved from a $500.00 ..then to a $1500 and finally the last 2 years to a $2500 deductible and to think of a $5,000 deductible worries me.
For the $2,500 deductible I pay $435.00/month For the $5,000 deductible payment will be $324/month.
I'm tempted to leave it where it is....as any premium savings can be wiped out with 1 test or 1 set of blood work.
What are others doing where this is concerned? All thoughts appreciated.
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Old 08-29-2010, 02:11 PM   #2
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I/we carry as large a deductible as we can get - $5,000 for me, $7,500 for DW.

I figure we won't be doing much traveling or other discretionary spending if either of us is ill enough to max out the deductible, so we choose to self-insure to that point. OTOH, if your budget is such that you cannot afford the higher deductible for successive years and keep food on the table, that would change your decision criteria.
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Old 08-29-2010, 04:00 PM   #3
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Thanks REWahoo...I had not considered it that way....but good point. I can self insure to the point of the deductible...just didn't know if it was a smart thing to do. Certainly want the lowest premium possible if I do that...
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Old 08-29-2010, 04:06 PM   #4
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Originally Posted by REWahoo View Post
I/we carry as large a deductible as we can get - $5,000 for me, $7,500 for DW.

I figure we won't be doing much traveling or other discretionary spending if either of us is ill enough to max out the deductible, so we choose to self-insure to that point. OTOH, if your budget is such that you cannot afford the higher deductible for successive years and keep food on the table, that would change your decision criteria.
That is exactly the same thought process as mine. Also, think about the pay back period between 0 and the 5K - save 150/month in premiums = 2 3/4 years. After that time, you are ahead of the game.
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Old 08-29-2010, 04:12 PM   #5
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Originally Posted by sheehs1 View Post
I was shocked when I moved from a $500.00 ..then to a $1500 and finally the last 2 years to a $2500 deductible and to think of a $5,000 deductible worries me.
For the $2,500 deductible I pay $435.00/month For the $5,000 deductible payment will be $324/month.
I'm tempted to leave it where it is....as any premium savings can be wiped out with 1 test or 1 set of blood work.
What are others doing where this is concerned? All thoughts appreciated.
Look at the various plans as to drug coverage, # Dr visits covered and emergency room.

I'd be interested to know what you premium would be for my plan. My BC/BC Smartsense 5K deductible; generic drugs; 3 Dr. Visits @ $45 includes tests is 202/mo. I live in Ga. and am 55. Where you live does affect the cost.

EDIT
I forgot the part below - 70% - max out of pocket $7,500
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Old 08-29-2010, 05:42 PM   #6
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It really depends on what you spend on health care each year. For example,

You now have a deductible of $2500 and everything after that is paid 100% and your premium is X.

You could have a deductible of $5000 and everything after that is paid 100% and your premium is X - $1200 annually ($100 a month).

If your health care spending is usually $2000 a year then clearly the second option is best.

On the other hand, if your health care spending is usually $5000+ then the first option is best.

You "save" money by the lower premium in option two only if you don't actually spend the savings on premium on meeting the higher deductible.
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Old 08-29-2010, 06:31 PM   #7
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As Kat said, you need to balance what you normally spend with what you can save in premiums. Add to that, if you go for a high deductible policy that is an HSA, you can shift some of your mid-term cash to an HSA account and use it occasionally when you 'run over' your budgeted expense, or to pay premiums and expenses after age 65.

By 'run over,' I mean if you generally budget for $2,000 a year in medical expenses per person, and one year your run $4,000, you can draw from your HSA. There are tax filings to consider, but it also another alternative. You do not have to fund the HSA with the HSA bank that the health insurer uses.

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Old 08-29-2010, 07:24 PM   #8
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Dex...I'm in Virginia and the quote I received for SmartSense with dental is $250/mth, 30%/70% coinsurance, $6,000 max exposure, 3 co-pays a year and after that it is the negotiated rate with the doctor...which for family practice here is $70.00. I'd have to go thru underwriting again for anything other than increasing the deductible on my current policy or moving to HeathSmart which I understand is a poor policy with no built in coverage...with all services subject to deductible. Health Smart $5K deductible for me was going to be $253./mth. I understand SmartSense has better coverage that Health Smart....
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Old 08-29-2010, 07:32 PM   #9
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Thanks Kat and Rita...my health care costs are generally from $1,000 to $2,000 a year barring unforeseen circumstances.
Thanks for the comments. My sister thinks I'm crazy for considering the $5K deductible so wondered what you guys thought.
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Old 08-29-2010, 07:33 PM   #10
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Dex...I'm in Virginia and the quote I received for SmartSense with dental is $250/mth, 30%/70% coinsurance, $6,000 max exposure, 3 co-pays a year and after that it is the negotiated rate with the doctor...which for family practice here is $70.00. I'd have to go thru underwriting again for anything other than increasing the deductible on my current policy or moving to HeathSmart which I understand is a poor policy with no built in coverage...with all services subject to deductible. Health Smart $5K deductible for me was going to be $253./mth. I understand SmartSense has better coverage that Health Smart....
The $250/mo looks good to me - I don't have the dental which I think is about $15/mo if I wanted it.
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Old 08-29-2010, 10:34 PM   #11
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It seems to have boiled down to increasing the deductible on my current policy for a premium of $354 with no cap on copays and 0%/100% coinsurance or going thru underwriting and comparing the SmartSense and Premier plans. With the latter I could probably get the premium down to the $250 mark on either (my notes on the Premier are scanty).
Thanks everyone for your thoughts!
Sandra
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Old 08-29-2010, 11:14 PM   #12
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Originally Posted by sheehs1 View Post
It seems to have boiled down to increasing the deductible on my current policy for a premium of $354 with no cap on copays and 0%/100% coinsurance or going thru underwriting and comparing the SmartSense and Premier plans. With the latter I could probably get the premium down to the $250 mark on either (my notes on the Premier are scanty).
Thanks everyone for your thoughts!
Sandra

I'm a health agent in Virginia so maybe I can shed some light on it for you. The Premier is a better plan than SmartSense and almost directly comparable to Flexible Choice. The major differences between the Flexible Choice plan you have and Premier are:

-Co-pays are $10 higher ($30/40 instead of $20/30)
-Prescription limit raised to $7,500 (Flex Choice is $5k limit)
-No $500 per script cap on specialty drug co-pays on Premier. As an example, a $3k drug would cost you $1200, on Flex Choice the cost would be capped at $500
-Higher out of network deductible
-No $150 extra for x-ray/lab/immunizations on preventative care with Premier

Premier also has a $3500 deductible with 100% co-insurance available (in addition to $2500 and $5k) and is priced about 20% less than Flex Choice if you got the same underwriting risk level. Flex Choice premiums will likely increase rapidly in the future because the plan has been closed out for new sales starting this month - old plans have higher rate increases as healthy members move to new plans and leave the older, sicker block of business.

Smart Sense has deductibles of $750, $1500, $2500, $3500, $5k, $7500, and $10k. All require 30% co-insurance up to $3500 out of pocket on top of the deductible, except the $10k deductible which is 100%. Preventative care is subject to the deductible, whereas it is included before deductible on Premier and Flex Choice. If buying Smart Sense, be sure to buy the Enhanced Drug version, otherwise drugs that aren't on Anthem's formulary aren't covered.

Anthem's drug benefits are not as comprehensive as other companies (namely Humana and United Health One). Humana and United Health One will have higher premiums for the same type of co-pay plan than Anthem at your age (if you were in perfect health, underwriting could change that). Whereas Anthem charges a 40% co-payment regardless of the drug cost, Humana and UHO have fixed co-payments depending on the drug tier. As an example, Oxycontin 80MG would cost you 40% of the ~$750 retail cost with Anthem, which is $300. It is a Tier 2 drug with Humana which only requires a $35 co-pay. Copaxone would cost you 40% of the ~$3300 retail cost with Anthem, or $1300 co-pay. It is a tier 3 drug with Humana, which is a co-pay of $55 or 65 depending on plan. Humana and United also have no annual limit on prescriptions (United requires a rider for this), which is a huge benefit compared to Anthem. It is an even bigger benefit on HSA-compatible plans, where all prescriptions are paid 100% after deductible with no annual limit.

In a worst case scenario with Anthem, assuming all services in network, your Flex Choice plan could cost you the $2500 deductible plus up to another $10k out of pocket on prescriptions, plus any prescriptions exceeding the annual limit. Keep in mind that the type of prescriptions hitting those limits will likely be chronic and needed for life, so you would need to count on those expenses every year. An HSA plan can limit your total expenses to $2500 total for about the same price, possibly less, but you trade off the first dollar benefits like co-pays with the HSA plans. Hope that helps
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Old 08-29-2010, 11:46 PM   #13
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We are in our first few months of a plan with $2000 medical deductible and $550 prescription deductible on each of us. After always having a company paid low deductible plan it was a little scary. We looked at a few of our previous years expenses and decided that the premium savings was worth the higher risk involved. We also both talked to our doctors about lower priced prescriptions.

This has been an interesting learning experience. I am so much more aware of what things cost since I'm paying for it now. Makes you think and be proactive instead of just accepting what the doctor orders. So far I haven't disagreed with anything, I'm just much more aware and I ask a lot of questions.

Since we've never had a plan like this I put a year's worth of deductibles for prescriptions and our expected office visits in a separate checking account that I use to pay any medical bills so that medical expenses do not come out of the monthly budget.
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Old 08-30-2010, 08:39 AM   #14
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Thanks dgoldenz....that helps a lot. I had in my notes that Premier was the plan most similar to FlexChoice. And that Anthem was phasing out the Flex Choice policy.

My renewal month is September and I need to make a final decision within the next couple of days. It helped my premium costs that I could take my daughter off (got a job with benefits) ..but the premiums quoted were for just "me". Husband has his own thru work.
I am in relatively good health. Walk/run 2 to 3 miles 4 or 5 times a week..and lift some weights...so am active. Currently I don't take any prescription medications. I do go to an endocrinologist twice a year...for thyroid bloodwork...to "watch it" as I am subclinical Graves and have been "watching it" for over 3 years. But this was also part of my history when I went to Flexible Choice...so no surprises there for Anthem.

It's the unknown...that...bothers me. (I'm sure all of us) None of us can predict...when something may happen. And if "THAT SOMETHING" crosses years...well...then we are basically looking at having to satisfy 2 deductibles for less then a 2 year period of time.

Yes SueJ, it is a different animal when paying for it yourself. I had group until about 5 years ago so I know where you are coming from.
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Old 08-30-2010, 09:51 AM   #15
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Thanks dgoldenz....that helps a lot. I had in my notes that Premier was the plan most similar to FlexChoice. And that Anthem was phasing out the Flex Choice policy.

My renewal month is September and I need to make a final decision within the next couple of days. It helped my premium costs that I could take my daughter off (got a job with benefits) ..but the premiums quoted were for just "me". Husband has his own thru work.
I am in relatively good health. Walk/run 2 to 3 miles 4 or 5 times a week..and lift some weights...so am active. Currently I don't take any prescription medications. I do go to an endocrinologist twice a year...for thyroid bloodwork...to "watch it" as I am subclinical Graves and have been "watching it" for over 3 years. But this was also part of my history when I went to Flexible Choice...so no surprises there for Anthem.

It's the unknown...that...bothers me. (I'm sure all of us) None of us can predict...when something may happen. And if "THAT SOMETHING" crosses years...well...then we are basically looking at having to satisfy 2 deductibles for less then a 2 year period of time.

Yes SueJ, it is a different animal when paying for it yourself. I had group until about 5 years ago so I know where you are coming from.
Hyperthyroidism should be standard rates most likely assuming all else is normal. As a comparison, a 55 year old female at preferred rates with United for a $3,000 deductible HSA plan would be $296/month. A $2500 deductible would be $318/month. The plan pays 100% for all covered services after deductible (preventative care is paid before deductible).

Compare the $318/month with your current $435/month (same deductible) - you are paying an extra $1300/year for the opportunity to only pay $20 for an office visit and 40% of your prescription cost. Your potential out of pocket expense for this extra $1300/year is much higher. You get no additional tax advantages without the HSA compatibility.

Think about it this way - if you saved $1300/year and your maximum out of pocket expense is $2500, you are only on the hook for about $1200 compared to what you pay now. It would only take you two years of putting the difference in premium into an HSA to cover an entire year's deductible.

One of the biggest advantages of an HSA is that you can pay your Medicare premiums with anything left in the account when you hit age 65. Any interest earned on the HSA will never be taxed as long as it is eventually used for healthcare services.
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Old 08-31-2010, 10:17 PM   #16
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Thanks again dgoldenz..while I researched HSA's a couple of years ago I didn't do anything. Need to look at it again. In the meantime, I scambled yesterday since September 1st was the start of whatever plan I decided on....to get the paperwork completed and faxed to Anthem for the Premier plan with dental, $3,500 deductible with a premium payment of $323. While the quote for my current plan was $424 with just me....it was going to be 535 for my daughter and myself. So in a sense I feel I have saved $200 a month in premiums with this change (daughter off policy and a policy change) ..IF underwriting accepts it.
That said...I will continue to research some things and perhaps make additional changes.
I hear you on paying $1,300 for the "privilege" of having copays. The Anthem reps this year are reading a disclaimer...before giving quotes...that goes something like..."they cannot guarantee premiums due to some of Obamas mandates that will be in affect....after September 23rd " I believe is what they said (wrote it down but notes are stashed away). The 2 mandates that will be in affect almost immediately are (1) paying for all preventive services and (2) having no lifetime cap...
So...they then told me premiums will be adjusted upwards for plans such as the Health Smart and SmartSense plans..where there currently are no protected benefits. I questioned them...more than once...about increasing premiums mid contract year...but could not seem to get a definitive answer...
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Old 08-31-2010, 10:38 PM   #17
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Thanks again dgoldenz..while I researched HSA's a couple of years ago I didn't do anything. Need to look at it again. In the meantime, I scambled yesterday since September 1st was the start of whatever plan I decided on....to get the paperwork completed and faxed to Anthem for the Premier plan with dental, $3,500 deductible with a premium payment of $323. While the quote for my current plan was $424 with just me....it was going to be 535 for my daughter and myself. So in a sense I feel I have saved $200 a month in premiums with this change (daughter off policy and a policy change) ..IF underwriting accepts it.
That said...I will continue to research some things and perhaps make additional changes.
I hear you on paying $1,300 for the "privilege" of having copays. The Anthem reps this year are reading a disclaimer...before giving quotes...that goes something like..."they cannot guarantee premiums due to some of Obamas mandates that will be in affect....after September 23rd " I believe is what they said (wrote it down but notes are stashed away). The 2 mandates that will be in affect almost immediately are (1) paying for all preventive services and (2) having no lifetime cap...
So...they then told me premiums will be adjusted upwards for plans such as the Health Smart and SmartSense plans..where there currently are no protected benefits. I questioned them...more than once...about increasing premiums mid contract year...but could not seem to get a definitive answer...
That's because there is no definitive answer. Wouldn't it be nice to have some actual guidelines?

The preventative services benefit will probably raise the SmartSense premiums 10-15% as a guess, and the unlimited lifetime max maybe 1-2%, if that. The big kicker will be if they are required to offer unlimited annual prescription benefits as that would raise rates substantially. The prescription limit is one of the ways Anthem is able to keep premiums below the rest of the market. There is supposedly a 12-month rate guarantee, but no information on yet whether that guarantee only applies to the current benefits or if it can be changed based on mandated benefits that were not in force when the contract began. They would probably lose a lot of customers if they raised rates immediately on recently issued policies, but nobody knows. Also, they aren't selling Healthsmart plans anymore, FYI. Only Premier, SmartSense, and CoreShare are available for underwritten plans.
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