Comparison Shopping

Lower insurance premia would be great!  The theory is that by purchasing a policy with a high deductible, people can pay a lower premium.  This, in turn, lowers the cost of healthcare because having a higher deductible makes people be more careful about seeing the doctor; patients tend to make sure that tests & treatments are truly needed when the money is coming out of their own pocket.  The protection against catastrophic illness is still there, so things work out well.  High-deductible health plans are supposed to be good for everyone.  Too bad it doesn’t really work that way.

I knew that our new insurance plan would have a much higher deductible, and that the purpose of the switch was to save money.  What could be simpler?  Higher deductible, offset by paying a lower premium.  Silly me.  It turns out that in our company’s case, the premium will drop from approximately $800 to less than $300 for many people.  The difference, unfortunately, is that this only applies to people who will have single coverage.  Up to now, everyone has had family coverage.  The savings will come from converting all those family policies to singles.  Those who still need family coverage will actually see an increase in premium.  The bid predicted that the rate would be $1000.  It turns out that was an average/estimate; the real cost is a little over $1200.

This means that I’ll be paying extra money for less coverage.  Yes, for that extra $400 per month that we’ll be paying, my annual deductible will skyrocket.  Higher deductible = lower premium ???  Not here!  Our premium already costs more than my groceries, and the price is going up.

It’s been quite an experience talking to other people who are trying to figure out what to do.  Some of the methods people have been using to choose a new insurance plan:

  • Pin the plans to the wall, tie a blindfold over the eyes, and throw darts at the paper.  Whichever plan is hit by the most darts wins.
  • Tell the plan administrator to sign them up for which ever plan is least expensive.
  • Flip a coin.  Heads means they select the plan with the best prescription coverage for migraine meds, tails means to select the plan offering free colonoscopies.

I’ve been taking a less haphazard approach.  What kind of coverage is offered?  How much is paid for office visits?  How much will be covered if my doctor stops accepting insurance?  What’s the prescription formulary look like?  Can I keep my pharmacist?

There are bright spots.  One good feature of the new plan is that I’ll be able to continue getting my Enbrel locally.  I’ve been extremely stressed about the switch to mail-order, and am relieved to know that I’ll get to stick with my pharmacy.

Also, there will be much better PT/OT coverage than our current plan.  My current plan only pays for 15 sessions per year; the new policy will cover up to $5,000 annually.  I hope to never need that much PT, but I know I’d have been in for two more issues this year if it had been covered by insurance.  I’m almost desperate enough to pay cash, but our car’s engine just had issues of its own and that was a huge chunk of money we weren’t planning to spend.

Here are some of the things I’ve compared in deciding which of the two plans we’ll select.  Not that you care about my plan, but maybe the thought-process will be helpful to someone else who’s evaluating other plans:

What are the details of the prescription benefits?  Coverage for generics is going to be similar for most policies.  When we look at tier 2 or tier 3 drugs, though, there can be a huge difference.  The biologics don’t come in generic, so the benefit for these drugs is important to me.  I’m okay paying a $70 copay if the other option is to pay 50% of the cost of a $2200 drug!  I appreciate being able to go online and see the insurer’s formulary so I know where I stand on the drugs I’m currently being prescribed.

What is the deductible?  How much money will I owe out-of-pocket before insurance starts paying for things?  My choices are (cough, gasp!) $1000 or $1500. 

How much will insurance reimburse me if I go out-of-network?  While coverage of professional fees for in-network providers is 80%, out-of network providers cost more.  One plan reimburses at 50%, the other at 70%.  Seventy percent coverage means it wouldn’t be cost-prohibitive to go out-of-network.

Does it matter where you go for tests?  It’s often convenient to use the lab & x-ray facilities that the doctor prefers, but I might stop doing that.  Labs & x-rays done at a hospital, both inpatient and outpatient, will only be covered at 70%.  Free-standing facilities usually charge less than hospitals, and they’ll be covered at 80%.

How much will be covered if I’m admitted to the hospital?  I’ve always thought that 80% is standard, but one of the plans being offered only covers hospital stays at 70%.

For what reasons is the deductible waived?  Both policies I’m looking at waive the deductible for visits to the doctor’s office.  The policy with a $1000 deductible will waive that deductible on the first $300 of labs & x-rays.  If you have more labs & x-rays than that, however, those fees are applied to the deductible before insurance will pay.  The other policy has a higher deductible, but it’s waived for lab & x-rays.

I did the math.  This past year, my lab & x-ray fees through September were $1800 (no EOB yet on the October lab draw, and I’m to have more blood work done again next week).  The plan with a $1K deductible would have paid for the first $300 worth of labs, then I’d have owed the next $1000.  After that, insurance would pay 80% and I’d owe the remaining 20%.  In real numbers, that means this insurance policy would have paid $700 and I’d have paid $1100.  The policy with a $1500 deductible would have waived the deductible for these expenses and paid 80% of all lab costs; I’d only have owed $360.  $1100 or $360?  The decision seems pretty clear.

It’s not.  Factor in an MRI and the picture changes.  With the first plan, my deductible would have already been met with lab fees, so the MRI would be covered at 80% (I’d owe $316).  The second plan would have paid for all the labs and not applied anything toward the deductible, so I’d owe the first $1500 of the MRI plus 20% of the remaining amount.  Suddenly the comparison is $1416 versus $1876.  That $360 that looked so good before doesn’t look so great now.

If you just have lots of labs & x-rays the second plan might be nice, but if you have enough other expenses that cause you to meet your deductible (PT, MRI, EMG, orthotics, infusions), then paying for your own labs and getting to the deductible sooner might be the way to go.

With a $200 deductible, I was willing to have most tests my doctors suggested, wherever they sent me.  It didn’t take long until my deductible was met, and then I only had to pay 20% of the remaining cost.  Now things are different.  $1500 is a lot of money.  I will no longer be getting tests done at the hospital’s outpatient imaging clinic – a mile up the road their fees are lower and my insurance will pay a greater percentage of the cost.  It’s worth driving.  I’ll be less willing to have pricey tests done, or at least postpone them to stack as many expenses as possible in a single year.

There’s a great discussion of high deductible health plans here.  People tend to delay seeking care when they know it’s going to be costly.  I didn’t really understand that until I read the details of our new insurance.  As I bid farewell to the best coverage I’ve ever had, I see more clearly how higher deductibles could be an incentive for people to forgo or delay care.

Check the details.  Read the fine print.  Compare insurance plans to see who really offers the best deal.

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6 thoughts on “Comparison Shopping

  1. Hi! I am trying to understand all the upcoming changes…so, I appreciate the sharing of your struggles. I have been reading about the repealing of Obamacare…yet, I have trouble deciphering the hyped public relations of the parties over the reality and votes needed.

    Would repealing of Obamacare help, or is that another fantasy? An expert was discussing competition and crossing state lines, etc. as an answer to the insurance problem. Then the new regulation that will be in place soon that says maybe 80% of our money goes to actual insurance, not profits?

    No rainbows on the horizon? Any hope?

  2. Incredible post, Socks. Researching all of this must have taken you hours and hours of poring over health insurance company materials and websites–a mind-numbing task few of us have the stomach and tenacity or, indeed, the intellect for. Thanks for clarifying the health insurance labyrinth for us.

    All that said, I’m really sorry that you’ve had to abandon coverage that you were happy with and be forced to accept coverage that will cost you far, far more every year without really improving it appreciably. That’s more than a shame, it’s “legal” robbery. My daughter has health coverage through her employer–she makes very little in terms of salary, and since the coverage has such a high deductible (and $35 co-pays) she is extremely reluctant to go to the doctor. She can barely afford it, and that’s with money already coming out of her paycheck every month. Yes, like you,she’s mostly covered if she gets extremely ill or injured, but what’s left over after her coverage gives out would be impossible for her to pay. And if she loses her job, she’ll have no coverage at all.

    It’s for this reason that I’m such a supporter of the Affordable Care Act. In America, most ordinary, hard-working people simply can’t afford private health insurance, even when it’s provided through their employers (who pay for part of it). I’m all for free markets, but this is a terrible personal burden–and a constant, nagging fear–for all of us.

  3. I’m so sorry you have to deal with this kind of headache. Even though the system is far from perfect, there are some things I really appreciate about Canadian health care. Not having to make these decisions is number one.

  4. Having to make decisions like that must be awful. I’ve been fortunate enough to not have to worry about a lot of those things, like X-Rays and MRIs (if the doc thinks its warranted, then off you go, few questions asked). As for the drugs, even if you’re not covered by private insurance, you can apply to several government programs to get funding for the biologics (of course, you have to had met other criteria, like trying a 3 month course of MTX and then 3 months of the MTX/Arava comb, but still, if you’re not paying for it, I’d say that’s still a pretty good arrangement).

    Good luck with figuring this stuff out! Hope everything works out!

  5. @Alice: My response to your comments turned out to be nearly as long as the original post, and I keep thinking of more things to add. I’ll have to get back to it.

    @Wren: Your daughter’s situation is hard, and many people are in the same situation. We have different views on PPACA ;) I’ll give some of the reasons one of these days.

    @Penelope: Sometime I’d like to do a comparison of other country’s systems. The cost, ease of obtaining care, physician choice, hoops required…

    @Not House: Here, x-rays are no-questions-asked. The approach to MRIs depends on the insurer. Biologics require pre-approval – less expensive treatments tried first – but I’ve never heard of anyone knowing what the exact criteria is.

    Thank you for reading & commenting!

  6. WS, Great post and great example of how to consider various insurance options. Another piece that may combine, eventually, with the High Deductible HSA is Direct Primary Care (Subscription Care). Qliance in Seattle is a good example. For a fixed monthly fee from your HSA, your basic primary care needs are met (see their definitions and fees to get a clearer picture) and you don’t max out your high deductible on primary care.

    http://www.qliance.com/
    Good luck with your decision. Onward. Dr S

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