New Insurance

I felt like giving a follow-up to my post on insurance from October. Insurance through my job will be starting soon (as the waiting periods expire) and I feel that I have a much better deal than I had before. At my last job I was paying $350 per month in premiums after whatever the company was putting in and I was able to save about $50 per month for Flexible Spending. I could get a very comparable plan with my new job but thanks to some comments from a trusted friend I found a high deductible plan that costs me less than $150 per month in premiums. For the same chunk of my paycheck as the previous plan I can save $250 per month towards a health savings account. This sounds like not much difference until you realize that I have no copays – only the deductible – and at the end of the year I keep whatever is left in the health savings account where I used to lose anything of the pittance that was in Flexible Spending if I didn’t use it.

All those things I could figure out after learning about High Deductible Health Plans (HDHP) and Health Savings Accounts. What has really surprised me in these last few months where I have had temporary insurance (which operates much like an HDHP) is seeing what regular insurance really offers. With that $350 per month insurance I would have to pay $20 per visit to see a doctor which would not count toward my deductible. Having gone to the doctors a couple of times where I had to pay for it towards my deductible I learned that it costs around $80 for a routine visit.

If I had 10 visits a year (with four kids that seems like a reasonably low estimate) I would have paid $4200 in premiums and have $400 left in flexible spending for an emergency late in the year. With an HDHP I would have paid $1800 in premiums plus $800 for those 10 office visits which means I have $2200 left in my Health Savings Account and I have paid $800 towards my deductible. An emergency under these two plans shows the real difference. If I have an emergency at the end of the year on the old plan I have to pay $1000 plus 20% of the remaining cost. On the HDHP I have to pay $1300 plus 20% of the rest. A $5800 emergency would wipe out the $2200 that I had saved with the HDHP but it would cost me $1560 more that I had in Flexible Spending on the old plan. I paid $2400 more in premiums for $1500 less benefits. I’m glad I learned about these plans now rather than 10 years from now.

About David

David is the father of 8 extremely organized children (4 girls / 4 boys) who is constantly seeking answers to tough questions related to parenting, education and politics while moonlighting for 40 hours each week as a technology professional. He also enjoys cooking, gardening, and sports.
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