Health Ins...Low deductible or high?

Garden_MommaMarch 17, 2005

We have been searching for health ins and am totally confused as to which low or high deductible that would give the best health benefits at an affordable price. It looks like the same benefits at different levels...Can anyone help me to understand? We have gone to a regular Ins company where we get our car ins but suspect that what they offered was a litte high and I've haven't heard of the Ins Co.. My husbands' employer suggested that we may get a better deal if we tried to find one on our own as he himself has bad health and so insurance prices pass on through to the employees as well. I'm not even sure if that is ok...???Any advice or information would be greatly appreciated... Thank you much!!!

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cowboyind

There are a lot of different issues you need to look at here, especially if your husband has poor health and needs frequent medical care.

First of all, it's hard to buy health insurance on your own that's cheaper than what you can get through an employer's group health plan. If your hushand has pre-existing conditions or health conditions for which he is currently under treatment, buying insurance for yourself could be essentially impossible. So be careful before you exit the employer's health plan, because it may be hard to get back in, and you could be left without any coverage at all.

Generally speaking, people who purchase health insurance for themselves on the open market (as opposed to being in a group health plan at work) are going to buy some type of major medical plan with a high deductible. This is just about all you can afford if you're paying the whole cost of it yourself.

If you do decide to look at plans that you can buy yourself, be very careful to look them over very carefully. For instance, they may have very specific limitations on pre-existing conditions. For instance, if a person takes blood pressure medication, they may refuse to cover the cost of that for the life of your policy. There may also be fairly low limits for "maximum lifetime benefits," meaning that if treatment for a serious illness ever runs in to the hundreds of thousands of dollars (as it easily can), you could at some point exhaust your coverage, and would essentially no longer have insurance. Also, if you or your husband spend a lot on prescription medications, that's something you need to consider carefully. How are these covered under the plan you're looking at? As you know, the costs of some of these drugs can run to thousands of dollars a year, and many "major medical" plans that are basically geared for catastrophic illnesses won't cover them.

My suspicion is thst you are going to find that you'd be better sticking with your hushand's employer's group plan. Possibly there are some options there (such as a HMO or preferred-provider plan) that might save you some money, but going out and trying to buy health insurance on your own is usually only a viable option for someone who's in very good health and really does not anticipate needing a lot of medical treatment.

    Bookmark   March 18, 2005 at 12:32AM
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steve_o

cowboyind is right in that whatever your husband's employer offers will likely be less expensive than insurance you can secure on your own. But one other avenue to look at might be to see if insurance is offered through other groups to which you belong (or could belong), like a credit union, co-operative of some kind, alumni association, interest group for self-employed individuals, etc. No guarantees on that one, but when you can associate yourself with a group, especially in your situation, your costs likely will be lower.

And, for any insurance, the more willing you are to handle the "little stuff" with a high deductible, the less expensive the premiums should be.

    Bookmark   March 18, 2005 at 9:57AM
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MommySF

Cowboyind is basically right, unless your husband works for a very small business. My parents own their own company they have a group, but it only has 3 people. They buy their health insurance through an association, but it is still about $400/month for each of them. If you and your husband, and any kids are healthy, then you can probably beat that. If you live in an area with HMO's try that. We are in the metro DC area, so we have Kaiser through my husband's employer, but they also sell reasonable individual policies. You just have to use Kaiser facilities. All the major insurance providers have some sort of HMO option, depending on what geographical area you are in.

If, however, anyone in your family has any health problems, is severly overweight, or smokes you are going to have a problem buying individual insurance, but it never hurts to research all your options.

Good luck with your search.

    Bookmark   March 19, 2005 at 6:57AM
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Garden_Momma

Hi All, thank you for your replies. I did forget to mention that DH employer offered to pay 70, we 30. Will that make much difference? It sounds like a high deductible might be the way to go . We are both in fair to good health. I was looking at Blue Shield/Anthem. Don't really know much about others as the employers (currently and before) had this company and I was trying to get close to the same type of coverage. That's what I meant about 'is this ok with employer paying also (not through work)...Thank You

    Bookmark   March 21, 2005 at 9:41AM
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donna_loomis

I am in agreement with the others about sticking with your employer's insurance, if possible. And unless his offer is on paper don't count on it being permanent. I'm sure everyone has their nightmare stories. I went from an employer who paid for everything, but gave me a very low wage, to an employer who pays me very well, but offers no health insurance. I thought we could take care of it ourselves and still come out ahead. Of course, the unforeseen happened and DH was diagnosed with cancer in the interim. He happens to own his own small (very small) business and one day a fax arrived from a broker for the same insurance we had before and they promised no health questions asked. So we were able to purchase health insurance again - at a very high price in my opinion, but I still feel we are lucky to get it. For my husband (53), myself (49), and one employee (25) I pay over $700 a month, with a $25 copay for visits and prescriptions. To be honest, in retrospect, I would have stayed with the low paying employer and have it be someone else's headache.

Tlhere are lots of plans that are less expensive, but the deductibles would bankrupt me.

Basically, I just want you to be very careful and do plenty of research before you make the change.

    Bookmark   March 24, 2005 at 9:44AM
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cowboyind

Garden_Momma, I wonder what the tax consequences would be of the employer kicking in 70 percent of the price of the health insurance plan you buy on your own. Would that money paid by the employer be taxable to you? I know that health insurance benefits themselves are not taxable, but since the cash is being paid to you and not to an insurance company directly, I'd want to consult with a tax expert about that.

Maybe one way to do it would be for the employer to purchase the health insurance on you and your husband's behalf, and then you would pay the employer the 30 percent, rather than having them pay you the 70 percent. Also, you could ask the employer to reduce your husband's income by an amount equal to the 30 percent contribution, you could then also shelter that from taxation. (This is different from having the employer take the 30 percent out as a deduction, because if it is taken out that way, the 30 percent comes out of after-tax dollars rather than pre-tax dollars.)

    Bookmark   March 30, 2005 at 11:47PM
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Garden_Momma

Donna, Those were one of my concerns about getting it down in writing from employer. In reality we acually would be responsble for making sure insurance co. gets their money.

And the other concern is what cowboyind mention about being taxable to us since employer wouldn't be paying directly to insurance co. I will check into that as well as finding about the other alternatives cowboyind mentioned.

Thanks guys, for helping to see a little more clearly.

G_M

    Bookmark   April 1, 2005 at 7:54AM
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