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.