Cheaper Insurance

Q. My wife’s employer has notified us of a change in our health plan. It seems the carrier’s contract with a major hospital chain has expired and we have 2 weeks to either accept the old plan but WITHOUT access to that hospital or their doctors, or find new coverage. We are paying $500 per month for family coverage which I think is outrageous. I think we can do better.

A. So basically you think you can get more coverage for less money. I hate to burst your bubble . . .

Your wife’s employer is paying about 65% of the premium. When you opt out of the coverage you will have to pay 100% of the premium. Even if you can find comparable coverage, and you can, the premium you will pay will be almost double what you are paying now.

The situation you describe, where a provider contract has been allowed to expire, is nothing new. This particular carrier went through the same thing about 2 years ago. Eventually the two came to an agreement but about 60 days had passed.

You can still use the non-par providers but you will pay more out of pocket when you do so. No one is telling you that you cannot continue to see your family doctor or use the hospital down the street.

The plan you have now doesn’t get much use. You are paying about $6,000 per year and, by your own admission, using less than $500 per year in medical services.

You could opt for a plan that pays all medical bills in excess of $10,000 per person for about $250 per month and cutting your annual outlay (in a typical year) to about $3500.

You can take on even more risk by increasing the deductible to $25,000 and dropping the premium to $170 per month making your expected annual outlay around $2500.

Either way you save money in a typical year, enough to ride out a “bad” year once every 3 years at the $10,000 deductible or once every 6 years at the $25,000 deductible level.

Or you can keep paying $6,000 per year and make the carriers rich.

Your choice.

This entry was posted on July 4, 2006 at 5:42 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response or trackback from your own site.

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