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Help me pick a health insurance plan

qhomie 126 76 March 19, 2016 at 01:10 PM in Finance (2)
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Relocated and started a new job a few months ago. Just received the insurance stuff from my employer and need to pick a plan. Unsure which plan to choose though.

36 years old, single, rarely go to the doctor. Make around 45-50K. Have a good size EF, a Roth, and just signed up for the company 401K. Once a year I might end up with the flu and need some antibiotics but overall healthy and not on any medications. Think I may need to see a dermatologist soon and have a mole or two removed. Other than that no real health issues other than being a bit skinny fat but I'm working on that.

Last company I worked for had crappy insurance and only offered high deductible plans. My last health plan I think had either a 2K deductible maybe 4K with an HSA for $64/week. Never took advantage of the HSA during my time with the company tho and the new company doesn't help fund the HSA at all. What do you think is the best way to go? Help!



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#2
Looking at those options, I personally would go for the low plan and depending on your overall budget throw some extra towards your HSA - you keep your HSA so even if you didn't take advantage of it yet you should still have it and the funds in it?
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#3
I don't have an HSA, never set one up . Also the low plan doesn't have an HSA. Just the mid plan.
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#4
If you don't think you will need the doctor other than the routine checkup / preventive care, then the mid plan can save around 3,500 in 2016 than the high plan (or 2,625 for the remaining of 2016) on the insurance premium.

I was 38 and had the HDHP HSA in 2015 with 1300 deductible that I thought I never need to spend and then in Nov. I had to go to the emergency room and go through ~6k worth of tests to make sure I had nothing to worry about. It's all about the risks so no one really knows.
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#5
For the extra $700/yr I would probably go with the middle tier. One trip to the ER on the low plan and you will end up paying more than you would have for the middle plan. As an aside, looking at these plans I have gained a renewed appreciation for the plan we have through my wife's employer.
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#6
Assuming that bi-weekly means once every 2 weeks (as opposed to twice per week) and you are single, I would be inclined to seriously consider the high plan depending on how many times you feel you will go to a doctor annually. About $1800 more a year over the middle plan which is going to be with pre-tax dollars (I assume) and it is a lot better plan. The other plans go to the deductible first in many cases, which means that for many things they are never going to pay out anything (since they have such high deductibles). Basically just for serious stuff\trips to the hospital. Doctors visits will end up costing you $80+ for just a regular visit (specialists will cost even more), you pay for all lab work (annual blood tests may be an exception), medication will go to the deductible first, which means you pay out of pocket in reality, etc.

If you feel you are healthy, are only going to see a doctor a couple of times a year and just want catastrophic type insurance, then the lower or mid plans are fine imo as long as you can afford to take the hit on the higher deductible should you get hospitalized. However, you really should also factor in how much out of pocket you will likely spend anyway with doctor visits, medication, annual exams, etc. at full price and factor in whether going with the lower plans or going for the higher end plan for more on a pre-tax basis makes the most sense in your situation.

My 2 cents.
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#7
I'd probably go with the Mid plan. Total premiums will be $1900 / yr, and your max OOP is $6350. So, the most you would ever spend on health care in a year (doctor's appointments, Rx, ER visits, everything) is $8250. More likely, if you're not going to the ER, you'll spend ~$2500 (annual physicals and associated blood work are covered 100% by law, but flu and moles may be a few hundred bucks OOP). All your premiums come out pre-tax, which reduces your tax burden. That plan also allows you to set up an HSA and contribute ~$3500 / yr, which is also pre-tax further reducing your tax burden. Dr visits for the flu and moles could be paid for from the HSA, leaving you with ~$3k left in the HSA at the end of the year - again, assuming no catastrophic illnesses.

One visit to the ER and you'll come close to hitting your OOP limit (or reach it) on any of those plans. The low and mid plans don't give you an HSA, however, which is a nice benefit. It's a shame you didn't take advantage of it at your previous job (especially if they were paying you $250 / month to have it!), because it is a nice tax advantage to pay for expenses you'd pay for anyway.

And BTW, save yourself a few bucks and don't take antibiotics for the flu - it's caused by a virus Wink
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Marshall: Have the rest of you guys figured out by now that mmathis is the smartest guy on SlickDeals?
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#8
I'd go with the middle option and begin contributing to the HSA.

I agree with mmathis and his reasoning. An HSA is a powerful thing. It allows you to have a savings account where money can go in tax-free, grow tax-free, and be spent on medically-related expenses tax-free.

Too, if you don't use the money, it can continue to grow through the years and, once you reach 65, be withdrawn at your then-current tax rate, just like a traditional IRA.

Or, you could allow all of that money to grow through the years tax-free, then spend it on anything you'd like in retirement tax-free. Look into what's colloquially called the "HSA Super Roth" for how to do this.

An HSA is great for someone like you who doesn't go to the doctor a lot. It can also be great for those on the other end of the spectrum, who go to the doctor a lot.
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#9
the hsa makes the mid tier option tempting. personally i'd go for the high tier option. i prefer budgeting for premiums rather than saving for possible big expenses.
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#10
Are you still covered right now by a non-HDHP plan? If so, you might want to see a dermatologist ASAP and make sure you don't have anything more serious going on with those moles (i.e., melanoma). Even if it's nothing more serious, you could get those moles removed now under that better plan.

If none of that applies then I'd recommend the HSA if you think you're pretty healthy. If you can afford it, max out your HSA contribution.

As previously mentioned, physicals are covered 100%. A doctor's visit for the flu should cost no more than $200 and most antibiotics are available as generics and/or are cheap to begin with. Install the GoodRx app on your phone and when you see a doctor tell them you're on an HDHP and that you're cost-conscious about prescriptions and will always prefer that they give you something that is available as a generic.

I'm going on 2 years now with my HDHP/HSA. My wife is the only one who has some costly medical needs, but we've got an amazing plan where we still have separate individual-level deductibles (and I think they're at the lowest government-allowed deductible level), so once she hits hers, everything is pretty much covered 100% for her.
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