As a homemaker you manage your home, and I believe this includes the budgeting and researching for what is needed, such as health insurance. I wanted to help by showing you how I evaluate which plan overall would not only save the most, but in my opinion, be well worth the "risk."
Let's take 4 plans offered by a large employer. You have the highest plan known as the PPO generally, which has the highest premium but lowest deductible and offers copays along with coinsurance. Next, is the step-down plan, which costs a bit less in premiums but the deductible is higher. Then, there is usually a third plan that is the lowest premium but highest deductible. However, since Obamacare, a lot of employers have started offering high-deductible plans, which is the 4th one I'm going to share. This plan has a very low premium but a very high deductible.
- PPO Plan - $9,300/yr premium, $775/month; $2,000 deductible with copays ($30 doctor visit, etc.) and 20% coinsurance. Yearly family maximum is $12,500.
- Plan #2 - $6,200/yr premium, $517/month; $4,000 deductible with 20% coinsurance. Yearly family maximum is $7,000.
- Plan #3 - $4600/yr premium, $383/month; $6,000 deductible with 30% coinsurance. Yearly maximum is $9,000
- HDD Plan - $3,000/yr premium, $250/month; $10,000 deductible with 40% coinsurance. Yearly family maximum is $12,500.
Let's consider a medical emergency happens of $10,000 total for the year for this family. Here is what they will pay with each plan. I include the premiums in the total cost but that is exactly HOW you should calculate your costs - what is it really costing you all year?
- PPO Plan: $9,300 premium + $3,600 ($2,000 deductible + $1,600 (20% of $8,000)) = $12,900
- Plan #2: $6,200 premium + $6,200 ($4,000 deductible + $1,200 (20% of $6,000)) = $11,400
- Plan #3: $4,600 premium + $7,200 ($6,000 deductible + $1,200 (30% of 4,000)) = $11,800
- HDD Plan: $3,000 premium + $10K ($10,000 deductible +$0 (Nothing covered)) = $13,000
You can see the cheapest plan for a $10K emergency is Plan #2. But we aren't done evaluating yet! Most employers will give you money for medical bills in your HSA and it varies depending upon what plan you go with. The HDD plan gets the MOST money from your employer of any other plan as you will see here:
- PPO Plan: $12,900 yearly cost - NO employer HSA donation = $12,900
- Plan #2: $11,400 yearly cost - $400 Employer HSA donation = $11,000
- Plan #3: $11,800 yearly cost - $600 Employer HSA donation = $11,200
- HDD Plan: $13,000 yearly cost - $1,000 Employer HSA donation = $12,000
Those are your true numbers to compare! If you expect a $10,000 emergency, then go with the cheapest (Plan #2), however if you don't know what you will spend or if you will spend any at all, go with the HDD Plan as it is by far worth the risk. It won't cost too much more than the other plans in the event of $10,000 medical emergency and it will save you thousands of dollars if you don't end up having any medical costs because you are paying a low premium!!
Here is another comparison - take the yearly premium plus the family maximum for each to see worst-case scenarios:
- PPO Plan - $9,300 premium + $12,500 maximum = $21,800
- Plan #2 - $6,200 premium + $7,000 maximum - $400 HSA donation = $12,800
- Plan #3 - $4,600 premium + $9,000 maximum - $600 HSA donation = $13,000
- HDD Plan - $3,000 premium + $12,500 maximum - $1,000 HSA donation = $14,500
Clearly, the PPO plan is a joke and takes most of your money, yet it is the most commonly chosen plan - go figure! Plan #2, is your best worst-case scenario plan if you know surgery or something is coming up.
I hope that helped you all understand how health insurance works. I've found that a lot of homemakers don't even research this or leave it up to their husbands, who have a struggle to even find time to research things like this! Help him out and do it and save your family money and make sure you are with the right plan for your situation.