Facing Reality

A lot of people have Health Insurance on the brain right now. With the Exchanges now open for the Affordable Care Act, and Congress fighting about budgets, how can you not? The media is talking about it. Bloggers are talking about it. Families are talking about it. And, in the mist of all of this healthcare talk, I got my annual renewal for health insurance through work.

When I first became eligible for benefits at work, my company only offered one plan. It was free to all employees, and included free coverage for spouses and children. How awesome is that? About 6 months later, our parent company decided to merge our benefit plan with theirs. Now we had 2 options: One plan was free, while the other had a small weekly premium ($7/individual, $19/family). At the time, it seemed like a no-brainer. The free plan had a relatively low annual deductible ($750), manageable copays ($35-45), and, due to the Affordable Care Act, would cover birth control and preventative care for free. The upgraded plan was “grandfathered”, and was therefore not affected by the Affordable Care Act (i.e., no free pills and exams).

At 34 years old, I consider myself to be fairly healthy. Aside from my wisdom teeth, I’ve never had surgery. I had mono as a kid, but otherwise have never had a serious illness. Heck, there were years in my adult life that I hadn’t gone to the doctor at all! So why would I pay a weekly premium, just to pay for my annual exams and birth control? I didn’t think twice as I signed up for the basic plan.

Over the past year, the basic plan has been great. Heck, it’s been the best health plan I’ve ever had! I realize how lucky I am, as the plans offered through my job are much better than what the vast majority of people have access to. But lately I’ve been thinking; Is the free plan really the most cost-effective plan for me? If I’m considering all of the options available to me, is sticking with the free plan really going to save me the most money?

With the Healthcare Exchanges now open, and many companies entering into their open-enrollment period, millions of people are considering their health insurance options right now. If you’re comparing plans, you really need to look at everything that each plan offers. Some plans may have affordable premiums, but high deductibles. One plan may have lower premiums, but have a higher co-insurance rate (the % of coverage that you pay for, versus the insurance company). It’s important to compare the plans side by side, and then consider your own needs when it comes to healthcare.

So, here are the options available to me:

A comparison between my company's two health insurance plans
A comparison between my company’s two health insurance plans

If all I was typically needing each year was an annual exam and birth control, Plan A (the free plan), would definitely save me the most money. Heck, it wouldn’t cost me a thing! And it would still be affordable coverage should something go wrong, like a serious illness or injury.

But this past year, I actually would have saved more money by being on Plan B. Sure, I would have had the $364 annual premium (or $7 per week). But that would be before taxes, so it would actually only have cost me closer to $270. Between hurting my ankle, getting a bug in my ear, contending with what seemed like a never-ending slew of infections, and having “abnormal results” at my annual exam, I could have saved literally thousands of dollars this year on the deductible, co-insurance, and copays. That would have more that made up for the extra cost of the premiums.

But I’m a healthy girl, right? It was just a bad year! Sure, a bad year could happen any year, but that didn’t make it my norm! Most years I would come out ahead on the free plan!

And then, reality struck. Sure, I’m healthy. I’ve never been seriously ill or injured. But was this year really a one-off? What about 2012, and that ultra-sound I had to get for abdominal pain? Or 2011, when I had a lump that required a mammogram, ultra-sound, and ultimately was biopsied? Or 2010, when the cyst on top of my head ruptured? Or when I broke 3 bones in my foot, from excessive walking? When I really got to thinking about it, I’d spent close to a thousand dollars each year, if not more, on various medical expenses. Was I really as healthy as I thought?

The reality is, I’m genetically prone to cysts, and lumps, and abnormal growths. My bones and muscles obviously aren’t as strong and flexible as they should be. And, at 35 (almost), my health has nowhere to go but down. Every year I should expect my healthcare spending to go up. And what if I were to have a child? The information packet helpfully breaks down the average cost associated with each plan for a normal pregnancy/delivery: $2,220 for Plan A (free plan), as opposed to $1,400 for Plan B.

It turns out, my no-brainer decision for free health insurance really wasn’t as simple as I thought. I had to bridge my mental disconnect between what I thought of my life (I’m healthy!) and the reality. As backwards as it may seem, spending a little more is likely to save me a lot!

– Cindy W.

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