Since it is open enrollment period, it is once again time for me and my family to review our decisions about our healthcare insurance. These days, there are quite a few nuances to healthcare insurance with things like copays, coinsurance, in/out of network, HMO vs PPO plans, preventative care coverage, HSA/FSA accounts... However, no matter how I look at it, it seems like they're all terrible deals.
The goal of the health insurance decision is probably the same for everyone: Get a reasonable amount and quality of healthcare services for the lowest total cost. Every time I review the details of the healthcare plans available to me, I arrive at the conclusion that the way to accomplish this goal is:
- Give up entirely on having any sort of meaningful coverage or benefit from any of the plans
- Just pick the plan with the lowest premiums (ideally I would just decline insurance entirely but the government charges a sizable fee for that)
- Expect to cover all healthcare expenses out of pocket and act accordingly (saving on the premiums helps here)
I feel like this can't possibly be right, because it's so counter-intuitive and illogical. I get that the government is inefficient sometimes, but surely I'm missing something here. For the sake of example, me and my husband are both about 30 years old, have average jobs with average quality of employer-sponsored plans, don't have children and not planning to, in reasonable good health. We don't have any major disabilities or chronic illnesses, but like most people, we have occasional minor health expenses which probably would add up to ~3k per year had we been uninsured. We exercise regularly and try to live reasonably safe lifestyles (not riding motorcycles or the like). We don't have millions in savings, but we have a few 10s of thousands - it would probably pay for a medium-size expense if it came to that, although we would rather conserve the savings.
The plans with high coverage have huge premiums, often adding up to around 10k per year. I would consider these a "pay a lot up front but then never worry about healthcare expenses again" type deal, except it fails in that regard because:
- Still have a deductible of about 1k or so, so the first 1k is not even covered
- Still have a copay of 10-20%, so it's not like I would at least get to not worry about how much the doctor visit will cost
- There are mandatory minimums of $10-20 for medicine and doctor visits for almost everything
- The selection of doctors is okay, but not that great, and you often end up deciding between a so-so in network doctor and a great out of network doctor (who you have to pay full price to because they're not covered despite the enormous premium)
With this approach, we are guaranteed to spend at least 11k or so every year if we have no unexpected health problems. The expense is also not even capped at 11k if we do have problems. So it seems like "pay a lot more in the best case, maybe pay even more in the worst case" option.
There are some more moderately priced plans which end up costing around 6k annually. These are basically the same as the high-coverage ones, but with the negatives being slightly larger (eg. ~30% copays instead of 10-20%).
The only cost-competitive option tends to be an HMO, which still ends up costing 4k or so, but at least provides actual comprehensive coverage with few or minor fees on top of the premium. Of course the catch is that you're stuck with the HMOs own doctors, which in practice seem to be quite bad and sometimes downright antagonistic (eg. denying your medical conditions so the network can get out of paying for the treatment).
The only reasonable option seems to be cutting our losses with the lowest-premium HDHP plan, add the money saved on premiums to our "rainy day fund", carefully price-shop and negotiate when going to the doctor (at least we're not restricted in shopping around, since they're all out of coverage), just accept that we won't be able to go to the doctor unless it's really necessary, and do our best to "not get sick". Is this really the system working as intended for healthy, young people like us, or am I missing something?
Note that this is based on our experiences with several employers over the years, both me and my husband working in different companies, across different states. Consistently, our options seem like what I described above or strictly worse.