Saturday, April 23, 2011

Health Insurance Comparison... why its important to do the work... and the math

This Post has been included in this weeks edition of the Total Money Blog Carnival is over at Stupid Cents. Go Visit and take a look! This is the first time I've been included in a blog carnival, so go on and take a looksie!!!

My fiancé and I sat down a few days ago and went through our options for Health Insurance. We can keep him on his parents plan until December 31st, but then we will need to have him added onto my work plan, (AKA: take a huge pay cut)... or have him find his own policy.

We called up Aetna, my fiancés current health insurance provider, and went through the options. She listed off one plan that just didn't work for us monthly in comparison to Kaiser... but she did give us another option that seemed cheaper initially... The other plan came with a base monthly rate of $115 a month for a high deductible plan ($2500)… but then when we were going over my fiancé’s current medications, she told me that rate would increase 25-50% PER maintenance drug that my fiancé takes (making our premium $143.75- $172.50 a month for taking one maintenance drug… )But he’s on 2 maintenance drugs so well need to do that twice—so the premium would be around $230.00...

Doctor visits are a co-pay of $50.00 a visit and he'd be limited to 3 visits a year (after that its a $75 Urgent Care Fee) … My fiancé would need to go at least 2 times a year just to get his prescriptions re-evaluated. My work plan has a $15 co pay, making it a difference of $70.00 annually, or $7.00 a month putting the monthly costs at $237.  

His daily asthma pills are around $2.00 a pill and are not generic, nor is there a generic available for them and on this plan we’d have to pay for those out of pocket. At $2 a pill on the high end, we’d pay out $720 a year. My work plan has these medications for $25 for a 3 month’s supply, so the added cost would be $620.00 a year or  $51.67 a month.   So we are at $288.67 a month.

Generic medications on the Aetna plan are a monthly $20 charge, while my work plan gives $10 generic for 3 months supply. My fiancé has 2 generic medications for an annual difference of $400, or 33.34 a month. So now we are at $322.01 for the bare bones plan— with a $2,500 deductible (then 30% coinsurance until another $5k is spent) and limited doctor visits. 

With this plan, I’d also have to still get my fiancé on a vision and dental plan through my work. The vision Plan is $36.00 a month, the expanded dental is an additional $14.72 to include him on it.   These two expenditures make my paychecks go from $1,271.54 to $1,252.04, making my monthly income $2,504.08 no matter what option we take (Aetna or Kaiser). When I subtract the medical costs of bare bones Aetna plan, we are at $2,182.07 to live off for the month.

By adding my fiancé onto the insurance plan at work, I get an increase in benefit money. It goes from $825.00 a month to $912.00:
  • Kaiser (2 people) $955.90 
  • Dental (2 people) $33.25
We come up SHORT $77.15  a month so instead of getting money added to my paycheck each month, well need to have $38.58 deducted from each of my paychecks. I looked into adding a VISION plan, but Kaiser includes a free vision Exam at no co-pay and we can get frames and lenses at Costco for less than $360.00 the vision plan would have cost us... especially considering that I don't wear glasses and to get him a vision plan, i'd have to pay for a plan I wouldn't need.  

In order to calculate how much of a difference NOT having the café cash added into my paycheck changes things, I’m going to run the numbers keeping my current stats (Single status, claim 1 federally, claim 0 on state.) My paychecks would be $1,252.04 with the increased dental on there already from the previous Aetna Example,  but with the rest of these changes, I’ll be only getting $1,115.46 every two weeks. Annual out of pocket expenses for my fiancé would only be $210.00 or $17.50 a month in doctor visits and prescriptions combined. If we take that from what our monthly take home pay would be with my work insurance plan ($2,230.92) we essentially get to live off of $2,213.42 a month… That's $31.35 MORE a month to use for groceries, gas, etc than if we picked the Aetna plan... and we'd be in better shape if there was actually a medical emergency because we have better coverage.

See, what might seem like a sticker shock at first, is actually the better deal for us longevity wise. He'll finish the year on Aetna on his parents plan (because monthly isn't only $82 since its a family plan)... and then in January 2012 he will move to the happy world of Kaiser...

Now when I do get married, I will change my filing status and we will therefore have more money to “live off of” each month because I'll still be cashing out some benefits for the remainder of the year so  my paychecks will actually increase... but we will be putting that money towards Roth IRA catch up contributions so it won't be part of our "living expenses." that way the sticker shock a few months down the line won't be so intense.

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