Next month is open enrollment for our family. I dread this season. My husband works for the state government, which gives us a broad range of choices—six this year.
This is the first time we’ve had to consider the whole family on one plan—and to shop around for the best deal—the last time we’d added our newest daughter and I on the plan as secondary insurance—just in case of layoffs at my company. It turned out to be a good move, as it became our primary insurance within a month.
So, how do you compare plans?
Our options range from $373 a month to $71 a month for our family of four—but how does one choose the best plan for their family? How do you compare tiered versus flat-fee prescription coverage? What about formulary/non-formulary medications? How do you compare deductibles, annual maximums and other items?
These questions and growing dissatisfaction with our current company’s bizarre fee structure has had me probing this problem for answers—and the best deal.
Here’s what I’ve discovered:
1. You must consider your needs. While my family is in generally good health, both of our daughters have chronic manageable health conditions that require extremely expensive medications. For us, a $2,000 annual maximum is no problem—provided we know we’re not going to be spending $10,000 on medications in a year. That is to say, we’re all in good health when we’re on our medications. If we expected an inpatient hospital stay or a kidney transplant to be part of the process, we may choose a different plan.
2. You must consider your providers. Who do you want to be seeing? I called our doctor’s office to see which plans are accepted. I also called the social work department at our local Children’s Hospital to see what they recommend in terms of coverage based on our kids’ conditions. The hospital informed me that because we make less than $106,000 annually—they won’t bill us for anything beyond our insurance company’s share of the bill. We just have to provide quarterly income verification. I wish I knew this about $2,000 ago.
3. Consider your health, both physical and financial. Can your savings account take the hit of you in the hospital for a week? Can you cover 25% of an inpatient stay, or should you look at a plan with a co-pay of $200 for an inpatient stay? Take annual maximums and deductibles into account. On our plan, an annual deductible of $4,000 per family is really not that bad, considering we only pay $123 a month.
4. Consider your prescription uses. I called our pharmacist and asked for more info about our co-pays. One of my daughter’s medications ranges from $5 a dose to $5.80 a dose. Our current insurance just has us pay 30%, not a fixed amount—so our co-pay varies with the cost of the drug. She suggested I ask the prescription plan about specifics on the medication. Our youngest will require extraordinarily expensive medications soon, so I called the prescription plan to inquire. They provided me with an online calculator that shows the current price (just like a commodity) of each drug so I could calculate my price. (Usually about $44 a month). They then said that if our doctor would fill three months at a time, we could get 3 months for a total of $50. (A savings of $328 a year!). I could calculate the medications that our littlest daughter will be on later and see that, as feared, they’ll be expensive.
5. Don’t forget to consider all of your options together. Remember the little daughter with the crazy-expensive meds to come? She doesn’t need them yet, but she will, and a 30% co-pay could be devastating, but remember option 2? Our little one’s medications are covered through the hospital’s pharmacy (our regular pharmacy won’t even carry the meds)—and any part not covered by insurance is covered by the hospital.
In the end, it turned out that the insurance company we have is actually the best deal for our family. Ultimately, I’m disappointed (and embarrassed) that I didn’t learn to navigate this plan a little better when we first signed up last year—it would have saved us almost $5,000. If you don’t understand your health insurance, trust me—it’s worth the time to sit down and figure it out. It took me about a half day and a half-dozen phone calls, but was well worth the effort.
{ 4 comments… read them below or add one }
What many people do not realize is that group health insurance is usually almost twice as expensive as an individual health insurance plan with similar benefits. Many people mistakenly think that group health is cheaper just because they do not take into account the portion of the premiums that their employer is paying on their behalf. If an employer pays for some of the premiums for the employee but not for the spouse or kids then it is often a great strategy to shop for a much cheaper individual health insurance plan as opposed to just joining the same plan as the employee and paying more than necessary.
I almost got into a car accident with this teenager and crazy father. Not good. It reminded me that you MUST get a Umbrella Insurance Policy!
You never know what will happen until you get sued b/c of an accident.
Spend the $300 a year and get a $1mil umbrella!
Good point on an umbrella policy–I’ve never looked into that for our family (not having assets to speak of… now that we have some, it’s worth protecting!)
Hi Jessica – Even without assets, it’s worth protecting your future stream of earnings, b/c that can be taken too!
$100-300 a year for a $1million umbrella is a no brainer!