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Which insurance should I choose?
Old 02-10-2014, 08:26 PM   #1
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Which insurance should I choose?

I have the enviable problem of having to choose between health plans for my early retirement. I'm a healthy 52 year old male.

Option 1
Go with the ACA and probably get a monthly subsidy of $175/month. So I'll end up paying $200 to $250 for a silver plan with a $2000 deductible, $6350 out of pocket max and pretty steep copays like $1000 for inpatient hospital services.

Option 2
Continue with my previous employer's health plan, but pay the full $430/month premium. For that I have a $250 deductible and copays of $100 for tests and imaging etc and everything is covered 100% after that. FYI this is not COBRA, its a benefit my employer gives to people with at least 10 years of service.

The final thing is that when I reach 55, whatever I choose now, I will qualify for my previous employer's retiree health plan and go onto Option 2 but with a premium of $100/month.
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Old 02-11-2014, 07:25 AM   #2
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I'd suggest you need to take a look at your out of pocket spending and what the billing has been for services rendered for the past few years. If you have needed very little care and expect that to continue, A would be better. If you do require a higher level of care, B will be best.

Only you can decide. Your situation is a lot like an investment allocation choice. What is your risk profile in the case of health care?

One thing to consider also is what your expectations are for the cost of premiums in future years under Obamacare. If the sign up demographics trend older, costs will escalate and Plan B with your former company could be much better.
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Old 02-11-2014, 07:48 AM   #3
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The fortunate thing in your case is that you can get a "redo" at 55 if you opt out of the employer plan now (and it looks like a no-brainer based on what you've said here). Frankly, unless you usually have relatively high medical expenses, you might be better taking the first option and putting the premium difference (about $200 a month) into an HSA. (Is the first option HSA-eligible? It looks like it would be.)
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Old 02-11-2014, 08:44 AM   #4
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You first need to compare policies to ensure they both offer similar levels of coverage. Even if they are ACA compliant there can be important quantifiable differences. Pay particular attention to the policy exclusions.

I agree with Ziggy on the other points. Not losing the employer option makes the choice easier, and the possibility of an HSA may make the exchange policy more attractive.
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Old 02-11-2014, 09:04 AM   #5
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You first need to compare policies to ensure they both offer similar levels of coverage. Even if they are ACA compliant there can be important quantifiable differences. Pay particular attention to the policy exclusions.

I agree with Ziggy on the other points. Not losing the employer option makes the choice easier, and the possibility of an HSA may make the exchange policy more attractive.
Thanks for the replies. The two policies are very different. The ACA is a high deductible plan with steep copays whereas my ex-employer's plan (its actually the state of Massachusetts) is a "Cadillac" plan with a $250 deductible.

I don't consume much health care right now, but 3 years ago I had to have a small outpatient surgery related to bike riding which is my big hobby. That cost me $350 on my employer's plan and would probably have cost me $6350 on the ACA plan. In ER I will be on my bike almost every day and if I have an accident I'd be glad to have the MA state plan.
Also I am only looking at doing this for 2.5 years until age 55 when I can go on state retirement health care.

The other thing to consider is that on the ACA plan I will have to limit my IRA to ROTH rollovers to control my MAGI and qualify for the subsidy. Without the subsidy my ex-employer's plan and the ACA cost about the same.

The fate of the ACA doesn't really worry me because as long as Obama is President it won't be repealed and if it does disappear MA is sure to reintroduce it's original health care system.....which was the model for ACA, but far better organized and run.

Finally just a comment on the practicality of buying healthcare through the ACA and MA state health exchange. Man what a mess. There are just too many plans and providers to choose from. Once you have an idea of a plan it's almost impossible to understand exactly what's covered as there are so many co-pays. The cheapest ACA plans are not accepted by my current doctor as they have a very limited network. My state plan has a good network that includes my doctor, my local hospital and several of the big Boston hospitals.
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Old 02-11-2014, 09:16 AM   #6
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I usually like lower cost plans, but your Cadillac plan is actually pretty reasonably priced. It will only take one medical event, accident, in-patient surgery, cancer/cardiac scare, and you will have covered the difference in premiums for 10 or more years. I'd go with the employer plan. You also have less issues with the transition off an employer plan, then back onto an employer plan later.
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Old 02-11-2014, 09:24 AM   #7
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Are there any risks that the current, and future, benefits under your MA State plan could be reduced? Is this risk the same as with ACA?
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Old 02-11-2014, 09:39 AM   #8
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Are there any risks that the current, and future, benefits under your MA State plan could be reduced? Is this risk the same as with ACA?
That's a good question.

As the state plan comes from bargaining with the Unions I would imagine the benefits would be better protected than the ACA which will be subject to political whims and probably greater price inflation.

There is a bill under consideration that would eliminate my state retiree health benefits, but the reps and senators aren't enthusiastic about it because of it's retroactive nature and all the push back they are getting from state workers. If I stay on the state plan maybe it will give me some protection from any changes, I have no idea because the legislation is still in flux. Still if that does happen I'd go on the ACA program
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Old 02-11-2014, 10:03 AM   #9
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Even though there were a ton of plans to choose from, it became very clear which one was the best once I nailed down my estimates of future healthcare system useage. I had two levels of estimate, one was the expected level, and another for "if something bad happened". I ran the numbers for the normal run-rate (as if I knew exactly how many doctor visits, etc). I ran it again for blowing past the high deductable and OOP max. For me, the plans all became the same (except for the network of available service providers) in the exceeding the OOP max scenario. But I weighted that unlikely scenario accordingly (5%) and so concentrated on premium + expected cost of typical services (95%).

For me, the high deductable bronze won-out easily. The catestrophic would have been even better, but it looked like a pita to get the approvals.
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Old 02-11-2014, 10:41 AM   #10
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For me, the high deductable bronze won-out easily. The catestrophic would have been even better, but it looked like a pita to get the approvals.
If you don't mind me asking what is the deductible and monthly premium for your bronze plan and how much subsidy do you get?
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Old 02-11-2014, 10:54 AM   #11
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Thanks for the replies. The two policies are very different. The ACA is a high deductible plan with steep copays whereas my ex-employer's plan (its actually the state of Massachusetts) is a "Cadillac" plan with a $250 deductible.
I was not clear enough in my previous response. In addition to different levels of cost sharing, coverage itself may be different. What the policy pays for and what it doesn't cover. Among the policy differences I found were things like elective surgery, hospitalization under observation, being hospitalized on a Friday, and treatments for many specific conditions.

Post 85 in this thread has a very useful spreadsheet by Anamorph that you can use to help estimate total cost among the different cost sharing schemes. Bronze, Silver and Coinsurance/Copay
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Old 02-11-2014, 11:15 AM   #12
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If you don't mind me asking what is the deductible and monthly premium for your bronze plan and how much subsidy do you get?
Not at all. This is the plan Blue Cross Blue Shield Blue Value Bronze 5500 NC

The deductable and OOP max are both 5.5k. That makes the math in the model pretty simple!

The cost is $1225/mo in my county, and family of 4 with $58k income, the subsidy on valuepenguin is $1081, which is pretty close to what I got on the exchange site 'for real'.
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Old 02-11-2014, 11:58 AM   #13
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I was not clear enough in my previous response. In addition to different levels of cost sharing, coverage itself may be different. What the policy pays for and what it doesn't cover. Among the policy differences I found were things like elective surgery, hospitalization under observation, being hospitalized on a Friday, and treatments for many specific conditions.

Post 85 in this thread has a very useful spreadsheet by Anamorph that you can use to help estimate total cost among the different cost sharing schemes. Bronze, Silver and Coinsurance/Copay
Here are the two plans. The Unicare Community Chioce is the MA state plan I'm in that will cost $430/month. The coverages seem pretty good.

https://www.unicarestateplan.com/pdf...nGuide2013.pdf

Here is the least expensive MA bronze plan (NHP HMO Prime) that my doctor accepts. If I assume an MAGI of $35k I'd get a subsidy of $177 on the premium of $381 making the cost to me $204/month. If I don't do IRA to ROTH rollovers and declare $25k income in 2014 by living off more cash I could get my premium down to $71/month

Neighborhood NHP Prime HMO HSA 2000/4000 CY 50/75 MA
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Old 02-11-2014, 03:15 PM   #14
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If I had your options I would do the employer plan for 2 reasons.
If you do need anything more than routine health care neighborhood health has limited specialists ( and pcps but you know yours takes it)
MAhealth connector is a mess right now. I have been trying to sign up since October 1. I am signed up now but they have completely messed up my premium payments and the people who answer the phone can't help. At least wait until next year when it will be debugged ( I hope)
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Old 02-11-2014, 05:46 PM   #15
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If I had your options I would do the employer plan for 2 reasons.
If you do need anything more than routine health care neighborhood health has limited specialists ( and pcps but you know yours takes it)
MAhealth connector is a mess right now. I have been trying to sign up since October 1. I am signed up now but they have completely messed up my premium payments and the people who answer the phone can't help. At least wait until next year when it will be debugged ( I hope)
I agree about the MA connector mess. It was fine before the ACA, really easy to use, but the new site has issues.

I found it non-trivial to go from the MAConnector and actually identify my proposed plan on the insurance company website when looking for network providers. There are too many options with names that don't quite agree with the names on the MA Connector site. Still for NHP I think you search on Commonwealth Choice plans and they have good in network providers. My current PCP take all the NHP plans and hospitals include MGH and Beth Israel Deaconess for really specialized stuff. Having MGH on there makes me feel a bit better about the zero out of network coverage.

My state plan would give me hospitals like Mount Auburn and Beth Israel in network, and cover 80% of my costs out of network up to a max cost to me of $5k.....so basically I could go anywhere.
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Old 02-11-2014, 10:57 PM   #16
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Given you plan to do more physical activities such as bicycling, it seems you have more chance of needing emergency room or urgent care center type coverage. Plus given you are already on the plan, and will be once 2.5 years comes around, I would just stay on the employer plan for the higher monthly cost and less risk of major loss due to high deductible and co-pays of the ACA plan.
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Old 02-12-2014, 05:41 AM   #17
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Given you plan to do more physical activities such as bicycling, it seems you have more chance of needing emergency room or urgent care center type coverage. Plus given you are already on the plan, and will be once 2.5 years comes around, I would just stay on the employer plan for the higher monthly cost and less risk of major loss due to high deductible and co-pays of the ACA plan.
Also my outpatient surgery was to fix a condition caused by cycling and I do a lot of traveling so the better out of network and out of state coverage is also a factor.
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Old 02-12-2014, 10:40 AM   #18
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The deeper I dig into the fairly impenetrable "information" on the plans offered by the insurance companies the less and less I like them. To get any decent cost savings over my MA state plan.....even with a subsidy.....the plan has to be pretty restrictive. Obviously there are going to be co-pays and deductibles, but the zero out of network coverage is difficult to take and as the "nickel and diming" of the charges. This is not a criticism of the ACA as much as a criticism of the poor value for money of the insurance plans.

I can see many people with these high deductible policies avoiding going to the doctor because they don't want to, or can't, pay the deductible and charges. So really do these type of plans increase access to health care? How many small problems will grow into big costly problems if left because the patient doesn't want to pay the deductible?

So I think I'll go with the state plan and pay my $430/month, get access to any provider, have low fees so I won't put off seeing the doctor to save money and have no worries about changing my insurance.
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