Choosing the Right Health Care Plan – Summary
Shawn, a subscriber and frequent commenter here at Clever Dude, as well as a personal friend of the Clever Dude and Dudette will be posting occasional guest articles. You can read his introduction here.
By Shawn
This is the final post in the “Choosing the Right Health Care Plan” series.
Now that I’ve identified and analyzed my four health care options, it’s time for me to make a choice for the year. Just as a recap, here are the expected out-of-pocket expenses and maximums for the four plans.
| High Deductible Plan | Low Deductible Plan | No Deductible Plan | In Network Only Plan | |
| Expected Annual Expense | $6,774 – $7,574 | $5,460 – $6130 | $5,206 – $5,876 | $4,198 |
| Maximum Annual Expense | $10,421 | $10,190 | $7,608 | $11,864 |
Because the High Deductible plan has the highest expected expenses and a high maximum out-of pocket, I eliminated that plan first.
Next, there is very little variance in the expected expenses between the Low Deductible and No Deductible plan, but there is a big difference in the possible maximum spent. Because of this, I eliminated the Low Deductible plan as well.
This left me with two options, both of which were $0 deductible plans. Although the expected expenses are about 29% less with the In Network Only plan, the possible maximum expenses are 56% higher.
I’ve chosen the No Deductible plan every year in the past, however for this year, I decided to go with the In Network Only plan for a couple reasons.
- If I find that the plan is not working out, I can switch plans mid-year when the baby is born (this is an event that allows you to change your options outside of the open enrollment period).
- Since the plan has fixed co-pays rather than percentages, it will be easier to budget for those expenses since my wife will be leaving her job.
- Looking at our recent past, we’re both healthy adults with no major health problems. Because of this, I don’t think we would be in a situation where we would be paying the maximum out-of-pocket amounts. A serious injury is possible, but those are mostly covered by other types of insurance, such as auto insurance if we were to be in a car accident.
Thus, I’m willing to take the risk of paying a lot more out of pocket versus the reward of paying much less if my assumptions for the year prove true.
Based on my assumptions, do you agree with my choice, or would you have gone a different route?
I hope this series has helped you think more closely about the level of insurance you need for yourselves and families. Creating the right balance of risk versus reward is a process that can require a lot of thought and planning, but will usually result in more reward than risk.
If it were me, I’d choose the no deductible plan. I would not join an in network only plan unless I was forced to. Using these plans requires you to use only their in network providers and sometimes requires referrals. Not sure of the specifics of your particular plan.
As someone who had a child develop a serious medical illness…..I will tell you that sometimes the best provider for your child is
someone who is not “in your network”. Even though your company will let you switch plans at certain times, there will surely be some delay in setting up needed treatment during the switch.
I would look at worst case scenarios…..do you have a first class cancer treatment hospital on your list of in network providers?
What happens when you travel? How large a service area does your network cover?
Don’t mean to fill you with gloom and doom, and I know you are young and healthy…but life can change very fast.Good luck with whatever you decide.
Amy,
I did a lot of research on my in-network options. The reason I wasn’t too concerned is that all of the hospitals in this area are in-network (including Duke and UNC hospitals, some of the best in the nation). Also, the hospitals in the areas we would travel to in the next year are also in network.
I will most likely switch back to the No Deductible Plan for 2009, but for this coming year, the In-Network only plan better served our needs.