Help in making insurance decision?

[ohyes]

If you have time, please help me think through this. Arkansas public teacher insurance is changing options. Upon retirement, our rates will be (family rate, with a 21 year old son still on plan):

Gold $1159.82/month: no deductible, $25 for pcp, $35 for specialist, prescriptions are on $10, 30, and 60 tiers, emergency room is $100, $0 for diagnostic services in-patient

Silver 1,105.20/month - not considering this one because the savings aren't that great

Bronze $352.42/month: $1500 deductible per person and $3000 per family, 20% for pcp and specialist visits, 20% for all prescriptions, 20% for emergency room visits, in-patient services, outpatient services and diagnostic services (when done in hospital)

Both have 0 for physical exams/preventative care. Vision and hearing screenings are $35 co-pay for both

I am so tempted to go with the new bronze plan. It seems the premium savings would pay for the deductibles in 4.5 months or so.

******
Any insurance gurus see a huge reason we should stick with gold?....if you read through all this.

I don't retire till July 1, 2012....but these will be the rates then. October2011 is the enrollment period, tho i think i can switch when i retire since that would be a life-change.

This is serious and i hope to get some feedback, now.

DH and i are both healthy and on no meds. I do have arthritis in my knees (one knee replacement down and another looming several years down the road)--but right now, all is well.

Thanks so much because i know this is asking a lot and few of you will feel like looking at all those numbers, lol
ohyes

 

[Moemg]

After you hit the $3,000 deductible with bronze is everything covered ?

 

[ohyes]

No, from what is in front of me, it appears we would still pay 20% of office visits, prescriptions and hospital services.

 

[Mulligan]

No, from what is in front of me, it appears we would still pay 20% of office visits, prescriptions and hospital services.

Before you choose anything I would read this bronze plan closely and call the appropriate person with direct information if you arent 100% certain. Make sure you know exactly and specifically what they cover and get the answers from the right source. I trusted our local school person who was in charge of our insurance on knowing when my insurance was up when I retired. Long story short, I went without health insurance a whole month and didn't know it because I went by what they told me. Didnt even know about it until it was past, luckily no harm.

 

[bbbamI]

So there is no max out-of-pocket amount for the year?

If so, that would concern me. The reason I mention this is because some illnesses can be very expensive to treat. Just the radiation therapy for my DH this year was approx $145k.

I'm not trying to frighten you or anyone else...but stuff happens.

 

[brewer12345]

I would inquire if there is a max out of pocket for each option.

 

[Alan]

I agree with the comments about finding out what, if any, is the max out of pocket per year. We have similar coverage to your bronze plan (we don't an option similar to your gold plan). Our plan has a max out of pocket of $3,000 which we would hit on a year with major surgery.

If you do go with the bronze plan, I would put the difference into a savings account each year to pay those decuctibles and oop expenses. I would also check that you can choose which plan each year, then if you do have a surgery that can be delayed you can always switch coverage.

 

[ohyes]

Thanks for the great advice, already. bbbam, experiences like yours must stay in the front of my mind when choosing insurance. (I hope your husband is doing better these days).

More info on the bronze plan:
The individual coinsurance limit per year is $2500 (Gold Plan: $1500)
The family coinsurance limit per year is $5000 (Gold Plan: $3000)

*This plan (bronze) is also eligible for a Health Savings Account. There are no co-pays with the Bronze Plan, but prescriptions and medical services apply to the deductible and can be purchased using funds in the HSA.


----so, we would put the money saved on premiums into the HSA. It looks like I should backtrack a bit on read about HSA's, never having had one. Surely, you can withdraw funds if you think you have more than you need in there at some point? Or, would you never have more than you might need?

The more I learn, the more questions pop up. Thanks so much for helping us. I will keep a list of those you guys mentioned plus my new ones (that those questions generated) and call somebody in the Little Rock office.

 

[REWahoo]

----so, we would put the money saved on premiums into the HSA. It looks like I should backtrack a bit on read about HSA's, never having had one. Surely, you can withdraw funds if you think you have more than you need in there at some point? Or, would you never have more than you might need?

You can withdraw funds tax free from your HSA account for "qualified medical expenses" as defined by the IRS. You can withdraw more, but you'll pay tax and a penalty for doing so.

Here's some info on HSA's : How Health Savings Accounts Work

 

[travelover]

..........----so, we would put the money saved on premiums into the HSA. It looks like I should backtrack a bit on read about HSA's, never having had one. Surely, you can withdraw funds if you think you have more than you need in there at some point? Or, would you never have more than you might need?..........

Not sure of your plan, but I can choose my own HSA provider. This flexibility allows me to add as much money to the HSA as I want (within the IRS allowed limits). So, for instance, if I incur a $500 expense, I pay the bill, then move $500 into the HSA, then reimburse myself from that account. At the end of the year, I tally totals and deduct from my taxable income.

 

[chinaco]

+1 on the max out of pocket issue.

You are looking at it from the perspective of what you might gain with the major focus on lower premium cost.

Look at it from the perspective of what you might lose (the risk side).

For example: If there is no cap on out of pocket... and someone in your family suffered a really costly medical problem that cost $1M.... what would you stand to lose?

This is another no cap situation. Also consider what the net cumulative effect would be over a longer period. For example: you go with the bronze, and experience total costs that are only marginally better, and switch back to the costlier plan... all you did was accept the risk of the major cost event with no gain. Likewise, if your total out of pocket is more, and you switch back, you spent more and accepted the risk of a major cost event.

You should consider age and family history also.


Unfortunately these types of situations are rarely simple... it could turn into ongoing marginal cost savings or be a binary event resulting in loss (depending on the out of pocket cap issue of course).

 

[Aiming_4_55]

+1 on determining max out of pocket per plan per year
+1 can you switch plans each year during open enrollment?

I would suggest investigating what the premium is for a policy for just your son as an individual and the premium for you and DH. Compare the price difference. It may or may not make a difference.

Also, since you know you will probably have a knee replacement in a few years, what is that projected cost on the 2 plans?

 

[MichaelB]

HSA plans have a maximum out of pocket that is limited by regulations, so if you are sure the bronze plan is HSA the max OOP is $12100 for 2012 and indexed for inflation. From the US Treasury website here

High deductible health plan. For calendar year 2012, a “high deductible health
plan” is defined under § 223(c)(2)(A) as a health plan with an annual deductible that is not less than $1,200 (no change from calendar year 2011) for self-only coverage or$2,400 (no change from calendar year 2011) for family coverage, and the annual out-of pocket expenses (deductibles, co-payments, and other amounts, but not premiums) donot exceed $6,050 for self-only coverage or $12,100 for family coverage.

If you do opt for an HSA plan the contribution is $6150, which is an above the line tax deduction.

 

[dgoldenz]

I would go with the bronze plan, no question. $800/mo difference in premium = $9600/year. You would never come out ahead with the gold or silver plans in any scenario.

 

[Midpack]

I'm no HC expert by any means but insurance companies are pretty smart, I suspect the cost in the end is about the same for both parties. The insurance company is not going to "give" you anything, they're a business.

Gold: $1160/mo x 12 = $13,920/yr + other co-pay, ER, Rx, etc.
Bronze (worst case): $352/mo x 12 + $5,000 annual limit + $1,000 (your 20% on the $5,000) = $10,224/yr + other 20% vs co-pay, higher ER, higher Rx, etc.

If you're in good health, you should come out way ahead on the bronze plan, and still have catastrophic care. If you're in poor health (and I'm not asking you), it may not make much difference - pay me now, or pay me later.

Best of luck...

 

[kaneohe]

$10,224/yr + other[/B] 20% vs co-pay, higher ER, higher Rx, etc.

If you're in good health, you should come out way ahead on the bronze plan, and still have catastrophic care. If you're in poor health (and I'm not asking you), it may not make much difference - pay me now, or pay me later.

Perhaps I'm missing something but shouldn't the bronze worst case be:
just the premium cost + the 5K max out of pocket (is that really max coninsurance as stated or max out of pocket? If really coninsurance, then you might also have to add deductible ).

Generally I agree w/ Midpack's approach. Pick a best case, worst case,
perhaps a most likely case and model all 3 with the plans you are interested in to see the differences. Your end decision is then a personal one depending on whether you value the most likely scenarios or the worst case. Since this is insurance, I would be biased toward worst case.

 

[TromboneAl]

I recommend doing a spreadsheet that shows what your cost will be given various predicted expenses. I'm guessing bronze will come out ahead in most situations.

 

[dgoldenz]

Bronze will come out ahead in every situation over the course of a year if the OOP max is $5k...there is no situation where the other plans would have a lower total cost.

 

[eytonxav]

No expert here, but given your overall good health, I would say budget for the gold, opt for the bronze and put away some of the savings.

 

[kaneohe]

Bronze will come out ahead in every situation over the course of a year if the OOP max is $5k...there is no situation where the other plans would have a lower total cost.

I think I agree w/ you but doesn't it seem strange that they would offer this situation where one option is always the worst? Perhaps OP has not been told all the relevant parameters? Or have you seen this type of situation before?

 

[Moemg]

Is Bronze an HMO ?

 

[ziggy29]

Thanks for the great advice, already. bbbam, experiences like yours must stay in the front of my mind when choosing insurance. (I hope your husband is doing better these days).

More info on the bronze plan:
The individual coinsurance limit per year is $2500 (Gold Plan: $1500)
The family coinsurance limit per year is $5000 (Gold Plan: $3000)

*This plan (bronze) is also eligible for a Health Savings Account. There are no co-pays with the Bronze Plan, but prescriptions and medical services apply to the deductible and can be purchased using funds in the HSA.


----so, we would put the money saved on premiums into the HSA. It looks like I should backtrack a bit on read about HSA's, never having had one. Surely, you can withdraw funds if you think you have more than you need in there at some point? Or, would you never have more than you might need?

What am I missing? Based on your original post, you save $800 a month ($9600 a year) on the Bronze plan, with a worst case out of pocket of $5000 a year? Seems that worst case you are $4600 a year ahead with the high deductible plan, plus you'd get the extra tax deferral of an HSA. Seems like a no-brainer unless I'm missing something here.

 

[Purron]

Found this link with some info on the plans:

Health Insurance – Arkansas Retired Teachers Association

 

[dgoldenz]

Found this link with some info on the plans:

Health Insurance – Arkansas Retired Teachers Association

The link doesn't clearly state whether the $5k co-insurance is in addition to the deductible or if the deductible is included in that amount. Even if the total max OOP was $8k, the bronze plan still wins every year. Bronze will also likely have much lower rate increases going forward since the starting premium is that much less to begin with.

I think I agree w/ you but doesn't it seem strange that they would offer this situation where one option is always the worst? Perhaps OP has not been told all the relevant parameters? Or have you seen this type of situation before?

Happens all the time. They are probably subsidizing the bronze plan as a retiree benefit and not subsidizing the gold/silver at all. This forces the retiree to choose coverage with less exposure for the insurance company or self-insured group.

 

[Purron]

The link doesn't clearly state whether the $5k co-insurance is in addition to the deductible or if the deductible is included in that amount. Even if the total max OOP was $8k, the bronze plan still wins every year. Bronze will also likely have much lower rate increases going forward since the starting premium is that much less to begin with.



Happens all the time. They are probably subsidizing the bronze plan as a retiree benefit and not subsidizing the gold/silver at all. This forces the retiree to choose coverage with less exposure for the insurance company or self-insured group.

Yeah, that's what I thought too. Not clear at all. Still wonder why the "bronze" plan seems to be such a clear winner. IMHO, insurance is never about good choices for the insured and is always about what's best for the insurance company. That's what makes me nervous. OP - please be very skeptical and very careful before making a choice. Dig deep and ask questions.