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Help in making insurance decision?
Old 08-30-2011, 09:18 PM   #1
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Help in making insurance decision?

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
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Old 08-30-2011, 09:24 PM   #2
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After you hit the $3,000 deductible with bronze is everything covered ?
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Old 08-30-2011, 09:33 PM   #3
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No, from what is in front of me, it appears we would still pay 20% of office visits, prescriptions and hospital services.
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Old 08-30-2011, 10:03 PM   #4
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Originally Posted by ohyes
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.
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Old 08-30-2011, 10:31 PM   #5
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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.
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Old 08-30-2011, 10:36 PM   #6
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I would inquire if there is a max out of pocket for each option.
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Old 08-31-2011, 02:08 AM   #7
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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.
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Old 08-31-2011, 06:58 AM   #8
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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.
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Old 08-31-2011, 07:09 AM   #9
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Originally Posted by ohyes View Post
----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
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Old 08-31-2011, 07:18 AM   #10
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Originally Posted by ohyes View Post
..........----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.
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Old 08-31-2011, 07:25 AM   #11
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+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).
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Old 08-31-2011, 07:32 AM   #12
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+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?
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Old 08-31-2011, 07:51 AM   #13
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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

Quote:
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.

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Old 08-31-2011, 08:48 AM   #14
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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.
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Old 08-31-2011, 08:57 AM   #15
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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...
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Old 08-31-2011, 09:33 AM   #16
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Originally Posted by Midpack;1107008
Bronze (worst case): $352/mo x 12 + $5,000 annual limit + $1,000 (your 20% on the $5,000) = [B
$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.
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Old 08-31-2011, 11:57 AM   #17
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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.
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Old 08-31-2011, 12:02 PM   #18
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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.
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Old 08-31-2011, 12:15 PM   #19
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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.
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Old 08-31-2011, 01:34 PM   #20
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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?
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