Tuesday, August 31, 2010

Let's talk health insurance...

I'm eligible to enroll in health insurance on September 3rd, which is Friday. However, I have two very different options of insurance, both with pros and cons. I was lucky enough to snag a job with insurance after 30 days, and I'll have health, dental, and vision (in addition to whole life and short term disability, but these are paid for by the company). The vision and dental are the same on every plan, but with health...health is a different story.

I have the option of deciding between an HSA and a PPO plan.

HSA stands for Health Savings Account. The plan costs about $300 less a year than a PPO, but there are disadvantages too. First of all, the deductible is $1500 - for just me. When Sean gets added on in January, the deductible will jump to $3000. That's a lot of money that we would need to have saved up for an emergency. The insurance wouldn't cover any doctors appointments, prescriptions, nothing - until that deductible is met. However, we'd also have an HSA account. My employer would contribute $500 ($1000 with Sean added) to the HSA, and I could contribute up to $2550 a year to the account. It's pre-tax, and rolls over year-to-year while gaining interest.

With a PPO, the annual deductible is only $300 ($700 with Sean), and all standard care is covered with a $25 copay. Emergency care bumps the copay to $100, but 80% is covered after that. This is the standard insurance that everyone else thinks of. PPOs have an FSA, which is pre-tax account similar to an HSA account, but the funds don't roll over year to year - this is optional though.

Both of the plans have the same out-of-pocket maximum too ($3000), so that's not much of an issue either.

I'd love to save the money each year and take the HSA plan, but if either of us were to get into a major accident or come down with an illness that requires hospitalization, we'd have to have $3000 ready to go - we're not at a point that we can save that much up. We'd be covered if we got through the first year - but what if don't? Isn't the whole point of health insurance to eliminate the what ifs? If Sean was working, it'd be different - we could easily have those funds. We technically do have those funds with Sean's loans, but those are earmarked for other purposes.

We're considering all of our options here. We don't want to get into heaps of medical debt while having insurance. I think we're going to go with the PPO, at least until we can build some savings and get settled in life. We shall see.

Any thoughts? What works best for you?


Jessica said...

I would go with the PPO with the FSA. If it turns out you don't like it, save up the $3000 and switch to the HSA next year during open enrollment. IDK if you guys HAVE savings, but I know that Jerome and I don't so the $25 copays would be easier than if (God forbid) something were to happen and all of a sudden we needed $3000 to take care of us, you know?

Amanda said...

I think that's what we're leaning towards too. We have savings, but frankly, I'd much rather spend it towards the wedding and honeymoon. And by "savings" I really mean "money from Sean's loans". Ugh.