It’s all in the NUMBers – Insurance 101

Have you ever tried to figure out your health insurance benefits?

What a confounding experience. I spent a little time today reviewing my coverage. As much as I’d like to claim it’s because I’m that organized, but really it’s just because my part time employer recently made benefits available to us. So, why not take a look at my coverage and options.

Health Insurance is not my bailiwick, but a person with reasonable education should be able to figure out her own insurance costs and benefits. Yes?

If you treat the total payout for this policy as full use of resources and the total cost as monthly premium + copays, you get a decent reflection for apples-to-apple comparison with other policies. It ain’t perfect, but it works. Since this policy caps the payout annually, it’s easy to calculate as the Maximum Benefit – assume full use of maximum benefit. The Cost is set in stone through bi-weekly withdrawals – so that too is blissfully easy to calculate.

Here’s how the numbers break down:

So . . . how’s that option 2 looking? Just because a plan is offered, does not mean it makes sense. This is an actual apples-to-apples for these two plans, same provider, same stuff. Remarkable. Keep in mind, once I hit the Total Benefit mark, the plan is 100% out of pocket for me, so this is only an in-between type plan to cover those of us who elect to have a high deductible plan.

Aetna, thanks but no thanks.

Even though the NPV of plan 1 is positive on a cash basis, adjusted for hassle factor, it rolls negative pretty quickly. I look at it this way, I’ll need to spend 2-3 hours a year (at least) dealing with the paperwork, submitting receipts, and assorted shenanigans. Is my time worth more than the $182/3 hours, or roughly $60 an hour? Without a doubt.

As a healthy person, I can get away with less . . . that’s part of the reason I make certain choices . . . to keep my health care costs down. When business was down for a bit I did just fine, not optimally, but just fine, on a cash-to-provider plan. The plan consisted of me paying my provider directly for services rendered. Annual cost for medical and dental was under $500. But the threat of idiots running red lights and slamming into me and my family is enough to keep me renewing the high deductible plan for “just in case” situations. So, I’m still on that cash-to-provider plan and have a safety net if needed.

Turns out doctors really appreciate the no nonsense approach too. Two out of three of my annual providers now no longer file insurance forms for clients. You pay cash at the door. Why should a doctor spend his or her time shuffling through insurance mandates? Which would you rather have a doctor who has time and attention for you or a doctor who file insurance forms?

Image courtesy of 401(K) 2012