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Assuming 24 paychecks (paid 2 times/month). The enhanced plan will cost you $16/year more if you max out your deductible. If you get paid more often, that number goes up. If you don't doctor much, the enhanced plan becomes even more expensive because of the premiums difference.
For a family plan you can put $6550 into an HSA this year (your funds and your company funds combined). That is TAX FREE money, so if you set up your contributions to max that out you have reduced your taxable income by $6550. That is a nice savings!! That money rolls over year after year so if you don't use it, you save it.
I can't see any reason to take the enhanced plan at all. Yes, your bills will be higher if you go to the doctor but you just use your HSA funds to cover those--or add to the HSA if you need. No big deal.
Without knowing your frequency of pay, it is difficult to give you numbers. But I figured using a paycheck every other week (26). In this scenario Plan B (the more expensive one) winds up costing you between $300 to $635 more per year, depending on how much you used it. I figured if you used $4,000 of it and if you used $7,000. Now if NO ONE goes to the doctor at all for the year, then of course your savings would be approx. $2,184 more for the cheaper plan (assuming there were 26 paychecks)
Without knowing your frequency of pay, it is difficult to give you numbers. But I figured using a paycheck every other week (26). In this scenario Plan B (the more expensive one) winds up costing you between $300 to $635 more per year, depending on how much you used it. I figured if you used $4,000 of it and if you used $7,000. Now if NO ONE goes to the doctor at all for the year, then of course your savings would be approx. $2,184 more for the cheaper plan (assuming there were 26 paychecks)
Yes 26 pay periods.
Let's say we use the doctor often and may have some big expenses. I still have to pay much more in my paycheck deductions and still have a maximum OOP of $7000 before the plan pays 100%. Can anyone help me figure out how the Enhanced plan would benefit me if we did have a lot of bills? I understand how the standard benefits someone fairly healthy. But I don't see the difference b/w the Standard or Enhanced if you are going to meet the $7000 max OOP anyway. This is what is confusing me.
Let's say we use the doctor often and may have some big expenses. I still have to pay much more in my paycheck deductions and still have a maximum OOP of $7000 before the plan pays 100%. Can anyone help me figure out how the Enhanced plan would benefit me if we did have a lot of bills?
If you maxed out your out of pocket expenses, the Enhanced plan will still cost you more because of the premium difference. In no way would the Enhanced plan benefit you. Keep in mind, companies do structure policies in a way that makes one plan more attractive than another. My guess is your company is going to be doing away with their "enhanced" plan in a year or two based on the numbers you provided here. They are trying to get people to move to the other plan by keeping the costs lower.
Too many people just don't like "big bills" though. They see the differences in out of pocket costs and think they can't afford the "cheap" plan, but never do the math on the total out of pocket costs. You have the exact same out of pocket max with both plans, how you get there is slightly different is all.
And I take back what I said in my first post..the enhanced plan will cost you $2184 more in premium differences--I was looking at deductible costs, not OOP max. I can't come up with any instance where the enhanced plan is a better deal.
And I take back what I said in my first post..the enhanced plan will cost you $2184 more in premium differences--I was looking at deductible costs, not OOP max. I can't come up with any instance where the enhanced plan is a better deal.
That was exactly what was confusing me. I ran all the numbers and it doesn't seem that the enhanced plan has any benefit other than for people who don't save and need someone to save for bills for them (higher monthly premiums and lower deductible as well as lower coinsurance when you hit your $2500 up to $7000), as well as have smaller bills when they do go.
Check to see that both plans use the same networks of doctors, if both are HMOS, PPO or EPO, whether one allows self-referrals or requires physician referrals, whether one has a "travel" policy.
In a similar situation, I went with the higher policy because my cornea specialist was on one plan but not the other (out-of-network vs in-network is a huge cost difference), the more expensive plan is a PPO rather than an EPO so I had a wider network to choose from and I could self-refer for things like the cornea specialist and the dermatologist. Plus the more expensive plan has a travel policy that will cover a wider range of services out-of-area as in-network.
In other words, be sure that the plans are really functionally identical other than the differences you list here.
Check to see that both plans use the same networks of doctors, if both are HMOS, PPO or EPO, whether one allows self-referrals or requires physician referrals, whether one has a "travel" policy.
In a similar situation, I went with the higher policy because my cornea specialist was on one plan but not the other (out-of-network vs in-network is a huge cost difference), the more expensive plan is a PPO rather than an EPO so I had a wider network to choose from and I could self-refer for things like the cornea specialist and the dermatologist. Plus the more expensive plan has a travel policy that will cover a wider range of services out-of-area as in-network.
In other words, be sure that the plans are really functionally identical other than the differences you list here.
It's unlikely that an HSA plan is built on an HMO model but those are good points to consider.
That was exactly what was confusing me. I ran all the numbers and it doesn't seem that the enhanced plan has any benefit other than for people who don't save and need someone to save for bills for them (higher monthly premiums and lower deductible as well as lower coinsurance when you hit your $2500 up to $7000), as well as have smaller bills when they do go.
There isn't a lot of cost difference in either plan once you hit around $4,000 in costs. The only big advantage cost wise with the cheaper plan is if you didn't use very much of it (say $500 for the year), then your savings would be greater. If that turns out not to be the case, then you are correct. You could view the higher premiums as a sort of forced savings (which for some people might be a good idea) , but that forced savings would still cost you a few extra hundred a year.
These policies (though they are not supposed to discriminate) are still written to charge more for people who are sick and have some form of chronic condition or need meds. These people can not chose the lower cost high deductible plan to save money unless they are financially solid with good savings. Lower income people with little or no savings are forced to pick the more expensive plans and pay more, because they really need the coverage, and could not afford to pay out high deductibles without maxing out their credit cards at 24% interest.
So in essence, though they can no longer refuse coverage to people who are sick, they still can charge more to cover them.
Last edited by modhatter; 02-02-2014 at 03:35 PM..
There isn't a lot of cost difference in either plan once you hit around $4,000 in costs. The only big advantage cost wise with the cheaper plan is if you didn't use very much of it (say $500 for the year), then your savings would be greater. If that turns out not to be the case, then you are correct. You could view the higher premiums as a sort of forced savings (which for some people might be a good idea) , but that forced savings would still cost you a few extra hundred a year.
These policies (though they are not supposed to discriminate) are still written to charge more for people who are sick and have some form of chronic condition or need meds. These people can not chose the lower cost high deductible plan to save money unless they are financially solid with good savings. Lower income people with little or no savings are forced to pick the more expensive plans and pay more, because they really need the coverage, and could not afford to pay out high deductibles without maxing out their credit cards at 24% interest.
So in essence, though they can no longer refuse coverage to people who are sick, they still can charge more to cover them.
Look at the policies again...the lower cost plan IS the less expensive plan. The overall out of pocket costs for both plans are the same, how you get to that max is different but if you max out the plan, you pay $7000 out of pocket no matter which plan you are on. If you take the lower cost option, you have $2000+ extra dollars in your pocket to start too because your premiums are lower. The lower cost plan (lower premium plan) ends up being $2184 LESS for someone that is sick or a high user of medical insurance.
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