Health Insurance
In response to der Maxson Blog on related topic:
On Jan 1, I got new health insurance through work. Here’s a comparison of the previous plan (which is still offered to employees if they’re scared to switch) and the current plan:
Old plan:
100% of the monthly deductable is paid by the company (including spousal and dependent coverage)
Prescriptionss are 10/20/30/40 based on generic/non-generic and formulary/non-form
$10 copays for all dr visits
Free ambulance rides
15% deductable for all other expenses up to some maximum per year ( I think it was up to $3000 out of pocket ).
New plan:
100% of monthly deductable is paid for by the company
They contribute $166.66 to a health care savings account for me each month (untaxed)
I also contribute that amount each month out of my own pay (untaxed as well).
This means I end up getting $4000 into a savings account each year, non-taxed. It only costs me $1500 lost income to do this, because we’re in the 25% tax bracket.
We pay actual insurance costs for anything medical. A trip to the Doctor now costs 44 bucks instead of 10 (normally would be 70, but we get the insurance negotiated rate).
After $4000 in qualified (ie, going to the doctor, surgery, etc) medical expenses for the year, all my medical needs are paid for 100%.
We can also use $$ in the savings account to pay for anything health related - band aids, for example. Before I wasn’t able to get a tax deduction on band aids. Now I am.
The question is: which plan is better.
Let me tell you that without at doubt the second plan is better. Much better. Like REALLY much better. And I think in general it would be better for many Americans, particularly younger ones in relatively good health. With the old plan, I had great coverage, but the benefit of the money of the premium was paid directly to the insurance company. Now, I face somewhat higher prices at the expense of keeping some of the money for myself (for medical expenses, anyway).
Here’s the catch, though: If there was a crisis and we had a medical emergency, I may have to pay the hospital up to $4000. If I didn’t have enough money in my savings account to cover it, I would have to pay the difference out of pocket.
Contrast that to the earlier plan, where the total out of pocket cost would be significantly less.
I hope this HSA thing continues gaining momentum and congress gives even more incentives to use it.
May 3rd, 2006 at 11:33 am
I am all for HSA plans. The only problem I had once was when the ex had a (probably unnecessary) trip to the ER that ended up with a $1500 bill. Because her plan was HSA, that entire amount had to come put of pocket.
As a side note, that happened the week before my new job’s coverage started in which they would have paid 100% of the costs…
But overall, I still agree that the HSA is a great plan (*cough*CreatedByRepublicans*cough*)
May 3rd, 2006 at 11:38 am
Agreed.
It makes you think about going to the doctor for trivial things, too. Previously, a Dr trip was 10 buck - no big deal. Now that it’s close to 50, I rethink whether I really want to go or not.
I can only assume this makes the insurance company mo betta happier as well.
May 3rd, 2006 at 2:35 pm
I was a bit skeptical at first but it’s turned out to be much better than expected. We shouldn’t come close to spending $4000 this year so we’ll have left over money that can be used in the future.
Plus our HSA earns interest (it’s an earmarked 5/3 account); bonus! We also have a debit card which makes it very easy to use to pay the doctor or buy those band-aids.
May 3rd, 2006 at 4:07 pm
i have an HSA asswheel. i get the same amount put in my account by the insurance, and my premium is ~$95/2 weeks, so it’s like i’m getting most of my premium back, where before, if i didn’t use my insurance, the premiums just went to their profits. i put an additionaly $40/month in, and i got that figure from guestimating what we spent on shit like cold meds, bandaids, prescrips and copays. i’m in my secnod year of HSA, and have like $2300 in the account. my yearly max out of pocket is like $3500, so if we have a biggie happen this year, then i might be out of pocket like a grand, which i likely would be anyway with prescrips, copays, etc.
i give HSAs a bang!
May 3rd, 2006 at 6:24 pm
HSA’s are the best thing ever. One of the things not noted above… the money is yours and can follow you from job to job. So you manage to put a couple thousand/year into it for a few years, you could be in good shape for a long time.
I’ve also found that around DC you get some nice breaks. After my last trip to the dentist, they knocked 30% off my bill for handling it via my HSA… which means no paper work/additional effort for them.
That may be a bad thing for the lady who’s fulltime job it is to file/argue with insurance companies…
May 4th, 2006 at 4:19 pm
HSA’s are great ass long as they roll over from year to year. The one offered through my current employer does not. TRACH!
May 5th, 2006 at 6:50 am
then it’s not an hsa it’s an fsa; there’s a big difference.
May 5th, 2006 at 8:46 am
FSA’s are the biggest scam ever. A few years back, the company I was with had an insurance provider that would deny 70+% of their claims the first time around. Most would be accepted afterwards, but they found that less than half the people would re-submit.
After my company started challenging them, they called it “cost savings”.
May 5th, 2006 at 8:31 pm
There’s alot bigger scams out there than fsa’s.
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