Help me understand this - health insurance

hoffse · August 2014

Hi MM,

H just got the basic overview for his health insurance which will start Sept. 1. He has a choice between a PPO and a consumer driven health plan (CDHP). Maybe I'm crazy but I don't know if the PPO really makes sense at all... can you help me understand this?

PPO deductible: $500 individual/$1,500 family

PPO out of pocket max: $5,850 individual/$11,200 family

Preventative care: 100% (no copay/deductible)

Doctor visit/consultation: 100% after $35 copay

Lab work: 100% (no copay/deductible)

Impatient hospital: $500 copay, $300/day copay for days 2-6, then 100%

Outpatient hospital: $300 copay

PPO premiums: $232 individual/$755 family per month

************

CDHP deductible: $1,500 individual/$3,000 family

CDHP out of pocket max: $3,000 individual/$6,000 family

Preventative care: 100% (no copay/deductible)

Doctor visit/consultation: 100% after $35 copay

Lab work: 80% subject to calendar year deductible

Hospital (impatient & outpatient): 80% subject to calendar year deductible

CDHP premiums: $135 individual/$520 family per month

**Plus the firm pays for the first $500 of expenses for individuals and $1,000 of expenses for family

So it seems to us that the CDHP makes the most sense because the OOP max is about half of what the PPO is... and the premiums are also several thousand less per year. Right now we plan to stay on separate plans, but once we start TTC we will switch to his insurance because it's cheaper and more comprehensive than mine is.

I'm not sure if this plays into it or not, but I'm currently contributing to an HSA. I anticipate having enough in that account to cover the OOP max (family) for the CDHP before we start TTC. But I won't have enough saved up to cover the OOP max for the PPO. I can't increase contributions to my HSA - I'm maxing them out each year right now.

So.... CDHP is the obvious choice, yes? Or is there something I'm missing?

TIA!

cupcait927 · August 2014

I normally just lurk but yes, the CDHP is by far the best choice in this scenario and for your future goals. My only concern is when does his plan year resets - is it calendar year or plan year? If it's calendar year, then he'll be going through open enrollment later this year and the plan design could change (even drastically). So while the CDHP may be a good choice now, you may need to reevaluate once he sees the plans for the new year. However, it sounds like you already max out your HSA and as long as his firm still contributes to the deductible, you should be fine even if the deductible increases for the new year, knowing that you may end up TTC.

ETA - I work for an insurance broker so this is right up my ally

hoffse · August 2014

cupcait927 said:

I normally just lurk but yes, the CDHP is by far the best choice in this scenario and for your future goals. My only concern is when does his plan year resets - is it calendar year or plan year? If it's calendar year, then he'll be going through open enrollment later this year and the plan design could change (even drastically). So while the CDHP may be a good choice now, you may need to reevaluate once he sees the plans for the new year. However, it sounds like you already max out your HSA and as long as his firm still contributes to the deductible, you should be fine even if the deductible increases for the new year, knowing that you may end up TTC.
ETA - I work for an insurance broker so this is right up my ally

Thank you!

I've been sitting here and staring at it through my entire lunch break trying to figure out if I'm missing something, because it seems like the PPO really isn't that great. I suppose there's a scenario where we might pay more for the CDHP plan in a given year because of the health expenses we happen to have that year... but I like to plan for worst-case scenarios, and the CDHP is obviously much better for worst-case scenarios.

I'm not sure when the plan year resets, but they refer to everything as "2014 plan/premiums/benefits." So it probably resets at the end of this year. I'll make a note of that and have him ask during orientation. We'll also make a note of it to look ahead for next year if the plan happens to re-set.

Thanks for your feedback!

vlagrl29 · August 2014

I feel I know a lot about insurance since I've had to do tons of research on it since we buy our own. I agree that CDHP seems so much better than the PPO. The max OOP is much less which is great.

hoffse · August 2014

AprilH81 said:

Does the CDHP plan include all of the doctors/facilities you would most likely use?

Does it treat pregnancy as one event or a series of doctor's visits and hospital stays (really makes a difference if the pregnancy spans two policy years and most do)

I'll have H check on this during orientation, but yes it covers the doctors/facilities we are likely to use. I'm pretty sure it treats pregnancy as a single event as well, given some of the examples they provided. But I'll make sure he checks. I can see how that would be an expensive thing!

brij2006 · August 2014

Go to that insurance companies' website and put in the PPO plans and CDHP plans and make sure there are many doctors and local hospitals that are available under those plans. Sometimes a CDHP plan can be a bit more limited with who is or isn't in their preferred network.

In comparing the two, the PPO plan is better for small things. IE: Dr's visits, blood work, routine items. As to where the CDHP plan you have a higher chance of paying more out of your pocket for those types of things. Especially since you have to meet a $1,500 deductible instead of $500.

However, one surgery or major testing and you're going to easily meet the max OOP of the CDHP plan (childbirth will pretty much meet that max). It all really depends on what you want out of the policy, but if your preferred Dr and closest hospital/ER are in the CDHP network, then I would do that one.

formerlyGDaisy09 · August 2014

I'd agree that the CDHP is the better plan. I think most hospitals have switched to billing an uncomplicated pregnancy as a single event, so it may not matter how the insurance plan bills it....watchout for ultra-sounds, as standard of care only includes 1-2 ultrasounds in healthy/uncomplicated pregnancies...which means insurance may not pay for more unless there's documented medical necessity. Most pregnancy visits fall into "wellness/preventative" visits anyways.

most places are switching away from PPO plans (they're the "new" HMO) most have actually been shown to encourage over-use of the health care system anyways, so they'll soon become a thing of the past...replaced by CDHPs, HSA-driven plans, and probably new plans generated by ACOs.

jessica490 · August 2014

H and I are under my company insurance of the CDHP and we love it. All basic care is covered (physicals,OBGYN apts). Our company give us a starting fund of $1200 before we even go into paying out of pocket. Last year we went over because we each went to some specialty apts so we ended up paying towards the end of the year ,but so far this year we have about $350 left in there and should be good until the end of the year.

hoffse · August 2014

@Brij - thanks! That was a good idea to check the websites. I just checked, and all of the doctors we currently use take that insurance. Both of the big hospital in towns as well as the children's hospital also takes that insurance.

I think we'll go ahead and have H enroll in that, and we'll find out about how they bill pregnancy once he has a group/policy #.

short+sassy · August 2014

As far as the plan year changing, I had that exact thing happen at my current job. I started the last week in November 2012 and it was funny because open enrollment for 2013 was going on at the same time. I ended up signing up for my "new hire" insurance for 2012...which was only going to be one more month...to the "higher monthly premium, but more service" choice. But then signed up for the "open enrollment 2013" insurance for the other option, ie "no monthly premium, HSA, but everything is out of pocket until you hit the deductible".

Then ran around like crazy that first December to get as many doctor visits/prescriptions in as I could, lol.

Help me understand this - health insurance

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