Healthcare Education and Q&A Thread

[Schneed10]

Originally Posted by firstdown

Sneed we currently have an HMO or maybe its called a PPO and the rates have jumped to over $700 per month for a family of three. Me and my wife both have a Life/Health ins lic. but we do not sell any health ins. I have been bugging my wife for the past 2 years to switch over to a health savings plan and after taking a course (she had to take something for continued education requirments) she took a course on HSP and has now agreed to switch. We all have appointments to have everything checked out before we switch over so we will know we are all in good health. Besides having a higher ded. is there anything we should look for in a HSP that we may or may not want? I'd also like your opinion on these plans. My figures show we will save almost $400 a month which we can put into the savings sides which I no are tax defered if used for med. bills. I read something that we may want to work out something with our doctor on billing so we don't pay top dollar for every visit and get billed closer to what they bill ins. co's.

Health saving plans, and other plans with higher deductibles, give you the nice benefit of charging you much less on a weekly/biweekly premium basis than a PPO or HMO program. The catch of course is you have the higher deductible.

Generally, the healthier you are the more a HSP (or any plan with a deductible) will financially benefit you. The sicker you are, the more a HSP will hurt you.

The nice thing with the HSP is any money you don't use on healthcare that year gets socked away to personal savings for you.

I have a PPO plan through my employer which contains a higher deductible & higher copays than traditional PPO/HMO plans. It costs me $61 per paycheck to cover my family, compared to $169 per paycheck under the traditional PPO plan. On my plan, inpatient hospital admissions come with a $2000 copay. That's separate from my deductible, which is $500 per person and $1500 for the family. So if I get admitted to the hospital, first I drop $2000 out of pocket and then up to $500 to cover the admission.

26 paychecks times $61 = $1586 per year for my plan.

26 paychecks times $169 = $4394 per year for the traditional PPO.

The difference between those plans is $2808 deducted from the paycheck on an annual basis. So if one person gets admitted to the hospital, plus we have the typical complement of doctor's visits, they would both work out to about the same total cost after paycheck deductions & out of pocket costs.

Where we'd get crushed is if the whole family got in a car accident or something, and I had to drop the $2000 copay for each family member. So there's more risk there, but I'm an odds guy, and I play the odds that I think are in my favor.

So, key things to look for in your HSP plan:

- Are the hospitals and doctors you anticipate using "in network". If they're not in the plan's network, it could make the plan a bad deal.

- Understand what the annual out of pocket max is for your family. You want to know what is the max you could pay in the disaster scenario I mentioned where the whole family gets in a car accident.

- Going into it, know that you have a cash management issue to deal with. Whatever your deductible is, you need to make sure you have that amount of cash laying around in order to cover deductibles and copays. In my situation, I need to have at least $3000 laying around at all times in order to cover out of pocket costs for a hospital admission & typical doctor visits.

A lot of people forget this, and end up unable to pay out of pocket costs because they failed to manage their weekly budget and wound up in debt.