Private Insurance

It has been a long time since I have written anything of substance, so why not break the hiatus and write about a very exciting subject – health insurance. Maybe this is a bit personal, but I am not going to reveal how much my family earns, nor how much of our income as a percentage is spent on health care, nor how much my employer’s group plan cost. It is my hope that someone out there might find this helpful, and encourage some who are discouraged with high rates at work to take a look at the open market.

Let’s start with a little back story. For my first job out of college, I worked for an awesome company that still had a DOT COM mentality. Part of that was incredible health coverage. My family had something like a $2,500 out of pocket maximum, and I think the highest we ever paid was something like $350 a month for our premium. We had a flexible spending account (FSA), good drug copays, and no co-insurance. Our first two children were born under this plan, and our second had an ER visit a few weeks after her birth. Both of these years, our out-of-pocket was $2,500.

Fast forward a few years, I started working a new company, equally awesome but for different reasons. One downside I saw in the interview process was the insurance – it was a pretty big jump for less coverage than what I was used to. It wasn’t until my former employer gave me COBRA information that I realized why our insurance was so good – that $350 a month or so that we were paying was less than 20% of the total premium. The new employer’s rates and coverage were a lot more in-line with most companies offer.

Fast forward a few more years, and the rates have gone up every year. That’s not my employer’s fault. Even my prior employer we felt the trend of ever-increasing health premiums. It most likely is a combination of government and health industry issues, but I am not here to make a political point (I am married to a nurse though, so I do hear about a lot of the waste and inefficiencies at hospitals). It was finally time for us to research private or open-market insurance.

At the beginning of 2013, we had 2 options through my employer – a PPO plan, or a HSA-compatible plan. We elected to go with the HSA plan with a $7,500 deductible, with a 20% co-insruance up to $11,000 maximum out-of-pocket. This means that we were 100% responsible for any costs up to $7,500 (after any insurance negotiated rates with the providers), and then we paid 20% for anything over $7,500 up to $11,000. I will not list how much we paid for that plan. It was, however, a common Blue Cross, Blue Shield of TN plan (I don't recall the exact code), and after researching plans direct from Blue Cross, the rate was within 10% of what we would pay for that particular plan directly from BCBST.

We decided to stay with BCBST, though there were other options, such as Farmers and Farm Bureau. Our goal was to reduce our deductible,  while paying the same or less. The big difference we saw was a matter of choice – instead of being limited to 2 plans from our employer, we  could choose a plan out of the 100 or so offered by BCBST that best fit our family’s needs and ability to handle risk. These plans had varying deductibles, out-of-pocket maximums, and co-insurance amounts. Some have dental, vision, and even limited term life insurance.

In this regard, shopping for insurance is like having private retirement. With an employer-sponsored 401k you are limited to 10-20 mutual funds; with a private plan through an IRA, you have access to thousands of funds.

We ended up with a plan “J3P”. For a family, it has a maximum out of pocket of $5,000 per year, with no coinsurance – once you hit $5,000, the insurance company covers the rest. This plan is on the “P” network, which after we had started the application, we realized we could save almost $100 per month by switching to the “S” network, since all of our usual providers were on both. Our initial quote was under $700 per month, but due to some adjustments, the monthly premium came out to $773.

The breakdown of the premium (P network):

  • Me: $90.80 for me,$181.60 after adjustments. My adjustments are based on weight as well as a diagnosis from 4 years ago. I think their representation of that is incorrect, I just need to find documentation proving that the diagnosis was not as conclusive as Blue Cross seems to think it was (I am not sure how they figured it out – I had some tests, but I didn’t report it to them since the results were not conclusive). Until I can clean it up, I am paying $90.80 extra per month.
  • Wife: $140.56, $189.76 after adjustment. Her premium includes maternity coverage, which is just shy of $100 / month
  • 4 year old: $60.89
  • 2.5 year old and 5 month old: $103.68 each. The rates are different for 0-2, 2-18, and 18+. Unfortunately, due to “fatigue of having 3 children under 5”, I put the wrong year down on the application for my 2.5 year old, so BCBST thinks she is only 1.5. I need to send them documentation proving she is actually 2.5.

Hopefully this information is helpful to someone out there. Shopping for insurance can take time, but in the end, you might be able to save some money and get better coverage than through your employer.

Leave a Reply