Health insurance, and $3252
It's open enrollment time at my husband's work, and this year they've rolled out a bunch of new health insurance options. I was very excited at first because an HMO option was available instead of a PPO. In my experience, we always end up paying more out of pocket with a PPO. However, when I saw the price of the HMO, my excitement waned. It's $363 a month, which is $4356 a year.
Happily, there was another option. It's called a "High Deductible PPO Plan", and it only costs $92 per month for a family. This will save us $271 a month, or $3252 a year in health insurance premiums. However, as the plan's name says, we have a fairly high deductible to meet. It's $1500 a person, or $3000 per family, and after the deductible is met, the plan pays 90% of everything.
Under this plan, we'll have to pay 100% of our medical costs up to $3000, except for preventative visits(well-child visits and annual gyn checkups are free). Hopefully we won't go to the doctor often enough to rack up $3000 in spending, but even if we do, we will still be a little bit ahead with this plan.
And, if we are blessed enough to be able to avoid the doctor a lot, we could be as much as $3252 ahead by the end of the year. It's quite possible...we've been very healthy so far this year, and so our total medical spending has been $14.72(we've had a PPO plan and have only been to the doctor for preventative care).
After some thought, we decided to sign up for the high-deductible plan, and we're going to put the $271(the amount this plan saves us per month) in the bank each month. That way if we do end up needing to go to the doctor we'll have the money to pay for the bills, and if we don't end up needing the money, then at the end of a year we'll just have a nice $3252 in the bank, collecting interest.
This is a pretty low-risk plan, based on how healthy we tend to be. Even if something catastrophic happens to us healthwise, the most we have to pay out of pocket in a plan year is $6000(and our $3000 deductible counts towards that total). So, the best case scenario is that we'll be $3252 ahead and the worst case scenario is that we'll end up $2748 behind. We have nearly that amount in our emergency fund at the moment, so we'd come through even a worse-case scenario in decent financial shape.
I hate choosing health insurance! I wish there was some way that everyone had the same for the same price. It's just crazy. I think your plan is great!
Wow. I just posted about mine... getting coverage for the first time through work (health and vision only, not dental)... it's costing me only $1.81 every 2 weeks.
While I complain often about our high taxes in Canada, I really, really, really need to be grateful about our healthcare system!
For your situation that is a good switch. You are savvy enough about spending and saving
that the money will get put away and not spent. It will be a good way to save throughout the years if you keep putting the money away, and you'll also
end up with $$$ to pay the deductibles and out of pocket
costs. Insurance companies irk me... we have a PPO and have had the same insurance (BC/BS) for 28 yrs. Hubby had never been sick, never filed a claim. All his preventative and thorough physicals were done for free by the employer. Now, after retirement, he had has some health issues, and Blue Cross has denied medications prescribed by the doctor. (they required preauth). So, all thjose years of us paying the premiums, and we have to fight to get any claims covered. If we had done many years ago what you are starting to do, we'd
have a good size nest egg for all the savings! You are doing a wonderful job of managing your finances !
You should look into opening an HSA. If you have a high deductable account you can put $ in here tax free to use for health care expenses. You save $ on taxes and you can keep rolling it over year to year. They only catch is that you have to use it for health care but it's a big enough savings that you should probably put some of your $271 in there.
Canadian Saver...yeah, I may have to pay $91 a month for the healthcare, but I'm sure I pay way, way less in taxes than you do. I think I probably come out ahead this way. For a single person like yourself, the healthcare cost is a lot less...but we have to have the family coverage.
Gail, thanks for the vote of confidence! Hopefully this will work out like I think it will.
Adrienne, we do have an HSA, and we put money in their for our vision and dental expenses. Since it's quite possible that we'll have another $14 year with our regular medical expenses, I'm loathe to put money in an HSA for that, because we might end up not needing it. So, that's why we're going for the option of putting the money into a high-interest savings account. That will save us money, and if we don't end up needing it, we won't forfeit it.
Re: the HSA...with ours we can submit receipts for bandages, Tylenol,etc. At the end of the year we go thru our receipts if we still have $ left in the account so that it does not go to waste. Once we had enough left over that we got our daughter a new pair of glasses...I HATE to lose $! 🙂
Kristen - I think you're confusing a HSA (health savings account) with an FSA (flexible spending account). You can't already have an HSA because you can only open them with a high deductible plan. The HSA is not a "use it or loose it" plan. You can keep compounding the $ your whole life. So if in 10 years your kid breaks an arm you have the $ to pay for it. Some people actually use them as another tax free retirement plan.
(spent far too much time researching an fighting health insurance stuff....)
Ohhh, I see. THAT sounds like something we could use. Can you only open them through your employer? I don't think I saw the option for one in the paperwork.
I think you can either do it through your employer or contact the insurance company directly and they should be able to tell you how to set it up. Good luck.
I can't get insurance, even a high deductible policy to use with an HSA. So, in lieu of this, I am putting away the money I WOULD be spending on insurance and the money I would be putting in an HSA into one of my ING accounts. If I DO have to get some sort of medical help, I will have the money to spend. If I don't need it, I have the money building over time. Hopefully one of these days I will be able to get insurance, but in the mean time I am feel like I am ahead of the game.
Just came across this post while browsing old entries - relatively new reader of the blog. Your response to Canadian Saver re: taxes and healthcare really disappointed me. I'll think twice about taking any money saving advice from you as that comment was pretty narrow minded.
Actually, I was responding to Canadian Saver's comment about how she pays really high taxes...she's the one who pointed that out, not me. 🙂