Dr. Wacasey’s Equation
NOW WE KNOW THAT DEDUCTIBLES ARE USELESS when it comes to gauging the ultimate value of a health insurance plan. Except as I’ve proven, to the health insurance companies who find them useful, indeed.
So it pays to know when to go for the Gold, and when not to. Big time. And the best way to do that – although I may be a bit biased – is to use Dr. Wacasey’s Equation:
P + O = W
Where P is the annual Premium you’ll pay to have health insurance, O is the Out-of-pocket maximum on your plan, and W represents What you could end up spending on health insurance, and health care, with any particular policy.
The Equation cuts through all the marketing hype about copays, deductibles, percentages, and other tricks that health insurers use to confuse the heck out of you.
Instead, you can quickly find how much you might spend with different plans by using only two terms: the Premium, and the Out-of-pocket maximum. Both are set by the insurer and are easily found in each policy’s details.
P is how much it will cost you to have health insurance. You can also think of it as how much it will cost you to stay well – that is, if you don’t have any health care expenses throughout the year. Again, think of this as being your best case scenario.
On the other hand, the O variable is how much you’ll have to spend on health care if you get really, really sick (or as I like to say, if you get hit by a train). You can also think of this amount as being your worst case scenario.
To phrase this another way, to compare different health insurance plans, take each plan’s best case scenario (P), add the worst case scenario (O), and you’ll see What you could be on the hook for (W), if you get hit by a train.
When you start comparing the W’s, it all becomes very, very clear.
Please keep in mind, though, that my Equation is just a starting point, to get you headed in the right direction. It can show you how not to fall for any of the marketing gimmicks that the health insurers have historically – and very effectively – used to sell their policies.
But this Equation is by no means exhaustive, nor does it tell the entire story about what those crafty, health insurance corporate lawyers may have included in the fine print sitting before you there, on your dining room table.
If you’ll remember, prescription coverage needs to be taken into consideration when choosing a plan.
Out-of-network benefits are something you should pay particular attention to as well. See, health insurers have started to use so-called “narrow networks,” where they limit the number of doctors and other providers available for you to see. Then, they often couple this with an exclusion – your health insurance plan doesn’t provide any out-of-network benefits.
This setup is a win-win for the insurer: if you’re sick and can’t find an available appointment with an in-network provider for the next six weeks, you’ll either suck it up and forego getting seen, or you’ll go see someone out-of-network who can get you in quicker.
Either way, the insurer wins, since they don’t have to pay for a doctor’s visit, if you don’t go to one of their doctors. And they don’t have to give you credit toward your deductible, for anything you spend seeing an out-of-network provider.
But this setup is a potential nightmare for those insured by it. And if you are, and you go to a doctor, radiology center, or hospital that isn’t in the health insurer’s network, then partner, you’re on your own. No matter how little, or how much, the bills may ultimately be.
Make a misstep, and break your hip when you’re on a ski vacation? Well, if you need an operation and two weeks of rehab before you’re ready to travel back home, then you’d better find an in-network hospital, and doctors. And quick.
Because if you go out-of-network, you could find out that your care while there isn’t covered at all, and now you owe some pretty fat checks for – what health insurance is supposed to cover in the first place.
It’s like…paying thousands of dollars a year to not have any health insurance at all.
This is why the HMO (Health Maintenance Organization) concept should be banished, and it’s one of the few areas where I think some strong legislation is in order. Because the idea of a health insurer restricting your consumer choice – not to mention restricting the trade of health care providers – is un-American, and should. be. outlawed.
Made illegal. In all 50 states and U.S. territories. So vote your conscience.
Getting back to choosing the best plan, the “out-of-network” concept is also important as to how it applies to the Out-of-pocket maximum. Many plans make a distinction between the in-network, Out-of-pocket maximum, and the out-of-network, Out-of-pocket maximum.
See what I mean about all the confusing legalese?
In fact, it is crucial to understand here, that the limits imposed by the Affordable Care Act on the Out-of-pocket maximum amounts ($6,850 per individuals and $13,700 per families for 2016), only apply to the in-network, Out-of-pocket maximum.
Go out-of-network, and all bets are off.
Allow me to illustrate: let’s say you have an HMO plan, and a network of providers. Although you may have an O listed in your policy of $6,850, that will only apply to services you receive from in-network providers. Go out-of-network, and you could end up owing millions.
Having said all that, please don’t just rely on Dr. Wacasey’s Equation to pick a plan. It’s a great place to begin your exploration, and it can certainly help you streamline your decisions. But in this evolving game, we all could benefit from taking the time to study the important details in each health insurance plan we’re considering.
There. Now that I’ve done with all the legal disclaiming, I’d like to give one more word of advice. When using Dr. Wacasey’s Equation, it’s important to find out how much the Premium will be for the entire year. Health insurance companies split this amount up into separate, smaller payments, so you’re not hit with a large bill all at once.
And by having you pay in installments, they also get to hide the fact that it is actually going to cost you $9,000 (or however much the Premium is), just to be insured.
Here’s an easy way to calculate your annual Premium. If you pay your health insurance Premium:
- Monthly, then multiply that amount x 12
- Two times a month, then multiply that amount x 24
- Every other week, then multiply that amount x 26, or
- Weekly, then multiply that amount x 52
And that number is what you will use, as the P value in each comparison.
To demonstrate what Dr. Wacasey’s Equation can do, I thought I would use it to analyze some real life examples of plans. On September 1, 2016, I logged on to the healthcare.gov website, and I gathered insurance plan quotes from the companies that service my ZIP code.
Now I am not married, and I didn’t include my real children for these hypothetical examples. I did use a standardized set of information to fill out all of the quote illustrations, though:
- I had to have a qualifying event to even be able to apply for coverage before Open Enrollment begins on November 1. So I checked the I recently lost or am losing coverage selection, and for the date of the event, I entered August 31, 2016. (OK, I fibbed, but hey! So do they…)
- For myself, I used my actual age (47), my gender (male), and my ZIP code (76034).
- I did not check the “Tobacco User,” or “College Student” categories in any instance.
- For plan illustrations that included my hypothetical spouse, I fibbed again and used the same age as mine (47).
- For plan illustrations that included my hypothetical children, I chose one Male, and one Female with the same age (sweet 16).
- I put my household income as $100,000, so in no cases did I qualify for a taxpayer-funded subsidy to help pay my Premium. 🙁
- In no cases did I complete the application, or accept any health insurance.
- In no cases did I actually complete the application, or accept any health insurance.🙁
I’ve included a screenshot from the healthcare.gov website of each set of three plans in each example, then followed that with a spreadsheet containing a detailed comparison, using Dr. Wacasey’s Equation.
I did not cherry pick plans to make some kind of a point, and I’ve included all of the companies who offer health insurance in my area. Interestingly, as far as plans go I didn’t find any Platinum offerings to choose from on healthcare.gov, so I just stuck with “going for the Gold.”
So away we go. I’ve listed these plans alphabetically, and starting off the batting order, is Aetna.
Aetna holds the dubious distinction of having one of the most interesting names I’ve ever seen in the English language: Mr. Eliphalet A. Bulkeley. A prominent banker, lawyer, and judge, Mr. Bulkeley’s other claim to fame was being appointed the first head of the Aetna Life Insurance company, way back in 1853.
That entity eventually became the one that we now know, and Eliphalet’s tradition of success continues – Aetna has grown to become one of the Big Four in American health insurance.
Over the past five years, Aetna has done extremely well; the company’s stock has gone from $39 a share in 2011 to over $116 a share as of 2016. Aetna had over $47 billion in revenue during 2013, and as of this year holds over $53 billion in assets.
Mark Bertolini is the CEO, and he does quite well, too, since he made a cool $27.9 million in 2015. It’s no wonder, either, since his company was the one that insured those Texas teachers last year.
I’ll start by showing you three different examples for Aetna: Individual plans, Individual + Spouse plans, and Individual + Family plans.
Here’s a snapshot of the Individual plans from Aetna that I picked:
As we go from the Bronze to the Gold, the Premiums go up, the deductibles go down, and the Out-of-pocket maximums are, well, sort of all over the place.
Even with just these few streamlined options, though, it’s still hard to see which plan is the most financially sound. So let’s use Dr. Wacasey’s Equation to find out:
Take a close look at the table, and concentrate on the Bronze and Gold plans. The deductible drops drastically, by a little more than $5,000 (from $6,450 to $1,400), while the Premium only goes up by $2,196 ($6,144 – $3,948). The Out-of-pocket maximum goes down, too, from $6,450 to $5,000.
Compared to the TRS examples, this seems like a genuine bargain. Could it be that going for the Gold is the best deal, in this case?
Again, that’s why you need to run the numbers through Dr. Wacasey’s Equation.
Because comparing the W value of the Bronze, to the W value of the Gold shows that if you get hit by a train, you will end up spending $746 more (or $11,144 – $10,398) by going for the Gold.
By the way, see how the W value for the Silver plan is the highest of all three? Take note of that, and let’s see if a pattern develops as we go along…
Here are the Aetna plans that I compared for myself, and my (hypothetical) spouse:
Look how the deductible drops as you go up on the precious metal scale. From a scary $13,700, all the way down to $2,800 – an almost $10,000 difference. Certainly enough to make any self-respecting couple think twice about “risking” so much money on a Bronze plan.
But remember, all that’s Gold, does not glitter:
Neither does the Silver, it seems. See how in both the first case and then again in this one, the Silver plans have the highest W value of all three?
I don’t think this is a mistake. In fact, I believe this is intentional on the part of the health insurers, because they know that human nature will make many folks say “The large is too large, but the small is too small.”
But there’s safety in the middle.
It’s a part of that whole confusing you game that they play – so you’ll just throw your hands in the air, pull your hair out, and ask your cat what she thinks before you commit to any decision. If you pick the Silver, the health insurance company gets to up-sell you a little by dangling that deductible, yet still cuts the dope – by leaving you at risk, with a high Out-of-pocket exposure.
Finally, here are the three Aetna plans I compared to insure myself and my (hypothetical) family:
Notice again the relationship between the Premium and the deductible. One goes up, and the other goes down – way down in fact, as you move from Bronze to Gold. Talk about incentive…wow. I can’t emphasize how much this is just a marketing gimmick, though.
Because again, the value of Dr. Wacasey’s Equation is in showing you the real picture, and if you compare the W values, well, there’s the naked truth staring right back at you:
In this particular case, going for the Gold, or especially the Silver, would still cost you more than the Bronze, if you get hit by a train.
Now let’s analyze some Blue Cross/Blue Shield plans.
BLUE CROSS/BLUE SHIELD
The Blues, as they are affectionately known, were some of the first to truly offer what we now consider to be health insurance, way back in the early 20th century.
And although today the Blues insure over 100 million Americans, they aren’t included in the Big Four because BC/BS isn’t one company. Instead, it’s an association comprised of 36 different, independent health insurers throughout the U.S. Sort of like a franchise model, if you will.
The largest of these “smaller” health insurers is Anthem, which is in the Big Four of health insurers, but I didn’t include it because Anthem doesn’t sell plans down here in Texas.
Blue Cross/Blue Shield Texas happens to be my insurer, so I hope they don’t drop me after I say what I’m about to say – about them.
It’s nothing personal, though, Blue. It’s strictly business.
The first thing I want to point out is the attempt to up-sell you on the Silver with the promise of two extra “$0 Copay PCP Visits.” Seriously? Does this kind of marketing really work? Well, it must, or else they wouldn’t be enticing you with such a cheesy offer.
But come on. I mean, can it get any more obvious, folks? This is your health, people, and you don’t need some health insurance company negotiating “freebie” doctor visits for you. Because if you buy that upgraded Silver plan, you’ll end up spending thousands, just to save hundreds…
We’ll come back to that in a moment. As we compare the Bronze and Gold, though, you see a pretty big jump in the Premiums – from $355 to $578 a month.
However, the $3,350 difference in the Out-of-pocket maximums between the two plans ($6,850 – $3,500), is a pretty steep drop. Could this be an example where going for the Gold is, well, good?
It all depends, on that difference in Premiums. Does the end justify the means? With Dr. Wacasey’s Equation, it’s super simple to see for yourself:
In this case going for the Gold will cost you an extra $2,676 (or $6,936 – $4,260), for the year. Which is actually less than the $3,350 difference in the Out-of-pocket maximums.
And look at the W values for this calculation – amazingly the Gold would have you end up spending less money than the Bronze, if a train were to clobber you.
So, do we have a winner? Is this the one that proves my Equation wrong, since the Gold saves you so much money over the Bronze?
Well, it depends on how you look at spending your hard-earned money. If you go for the Gold, then you could indeed save $674 ($11,110 – $10,436), in a worst case scenario.
But you’d have to pay an extra $2,676 in Premiums, to do it.
Let me break this all down, Vegas style. Would you ever, in your life, consider putting $2,676 down on a poker hand that only had $674 in the pot? If you won it, that is?
Well, like I told y’all once before I ain’t no gamblin’ man. And I wouldn’t take that bet.
Nor would I go for the Silver in this case, either. Not even with the fantastic offer of the two additional free visits to your PCP. Because if you get hit by a train, you’ll end up spending the most of any of the plans, at $12,382.
Oh, and to get those two extra free PCP visits with no copay? That will only cost you $1,272 more ($5,532 – $4,260) in Premiums, compared to the Bronze.
That’s uh…over $635 per trip to the doctor. And anyone who would pay that has more dollars, than sense.
My congrats to Blue Cross/Blue Shield, though, for being genius.
Batting next in the lineup is Cigna.
Cigna is one of the Big Four of health insurers, and even has its own network of – Cigna-owned – medical clinics in Arizona, with the interesting slogan “We Can Help You Be At Your Best.” Talk about keeping it all in house, though….health insurance companies, owning a bunch of doctors?
Their business seems to be doing great, too. Over the past five years, Cigna stock has risen from around $44 to over $127 a share, as of my writing. Their CEO David Cordani isn’t doing too shabby, either – last year he pulled in over $27 million in compensation.
Cigna probably does so well because they are expert miners, and have priced their Gold at a premium, indeed:
At $602 a month just to insure myself, this is the shiniest Gold I saw in my whole analysis. But it might be worth it, since with that plan I would only have a $1,000 deductible.
Wait a minute, though. Am I being tricked again? There’s only one way to find out:
Well, I’ll be. It seems that the Silver pattern doesn’t hold here, after all, as it doesn’t have the highest W amount. Instead, at $13,224 the Gold does, which is more proof that going for the Gold can be a losing proposition.
Because doing that would cost you more to stay well, and more if you ever got train smacked.
There’s another reason why going for the Gold rarely makes much sense, though. Remember what healthcare.gov said about the metallic levels?
“The plan category you choose affects the total amount you’ll likely spend for essential health benefits during the year. The percentages the plans will spend, on average, are 60% (Bronze), 70% (Silver), 80% (Gold), and 90% (Platinum).”
Oh, really? So if I buy the Bronze plan, then Cigna – according to Obama Jewelers, Inc – should shoulder around 60% of my health care costs. But if I go for the Gold plan, then Cigna is supposed to swallow 80%. Right?
Let’s find out. Comparing the O value of the Bronze, to that of the Gold, it sure doesn’t look like that’s the case. In fact, it seems that the Obama administration-approved website is telling a bold-faced lie.
Sort of. See, the Obamacare architects qualify their statement about savings, by saying that with a Gold plan you’ll likely spend less, on average, for essential health benefits than you would with the Bronze.
And I’m sure there are situations in which that’s true. Sometimes. Maybe.
But not in this case.
The Cigna Bronze plan has an Out-of-pocket maximum of $6,500, while the Gold plan would make you pay…$6,000.
That’s a difference of only 500 bucks, which is way less than the 20% reduction (think 80% costs covered by the Gold vs. only 60% covered by the Bronze) that is promoted (but not promised) by our federal government.
My point here is that it is a lie to say that you’ll save any kind of percentage, though, just by going from Bronze to Silver to Gold, since any potential savings on health care get eaten up by how much extra it costs to buy the upgraded health insurance.
The Affordable Care Act…making Care not so Affordable.
Founded in 2012, Oscar is a recent arrival to the health insurance game. With beer kegs in its corporate office kitchen, and a company philosophy of “We want to introduce people to the idea of great health insurance,” Oscar has branded itself as being innovative when it comes to managing health care.
And it is, to some extent. Oscar does not ally itself with employers and instead, only sells policies to individuals. The way health insurance should be sold. And I give a hats off to them for trying to wiggle their way between the employer-sponsored health insurance model.
Unfortunately for Oscar, however, there is strength in numbers. While its sales model may be innovative, not being able to sell policies to hundreds (or thousands) of employees at a time may also turn out to be the ultimate source of this company’s doom.
Oscar may be the newest kid on the block in North Texas, but it’s had a short lifespan; the company recently announced it would withdraw from the Dallas/Fort Worth and New Jersey markets at the end of 2016.
Still, since they showed up on healthcare.gov, I thought I would include the Oscar plans just for grins. Plus, I wanted to see if what they offer is really that innovative, after all:
Comparing the Gold to the Bronze, the deductible looks very enticing at $1,000. And the Out-of-pocket maximum drops by $2,850. Could this be too good to be true? Will going for Oscar’s Gold turn out to be a winner?
Comparing the W’s, it might just be. The Gold may save you $912 ($10,996 – $10,084) in case you get hit by a train, but it’ll cost you $1,968 more in Premiums ($6,084 – $4,116) to achieve that.
Clearly, you wouldn’t want to go for Oscar’s Gold, but what about that Silver? Of all three, it has the lowest W. Is that worth pocketing?
The Silver plan would save you a total of $792 (or $10,996 – $10,204), if you got bushwhacked on some train tracks. But again, to buy the Silver plan would only cost you $588 ($4,704 – $4,116) more than the Bronze would.
So it looks like, we have a winner! Our first (and only) example in this entire chapter where upgrading from the Bronze plan may save you money.
Let’s break it down:
The Silver plan for Oscar would cost more to purchase, but if you take the difference in the W values ($792) and subtract the difference in the Premiums ($588) you’ll see that you could end up saving a little more money ($204 to be exact!) over the Bronze!
And that, is where the excitement ends. Because, although this is a definite pattern breaker for my Equation, I still wouldn’t do it. Here’s why:
The amount I could save by upgrading just isn’t worth the initial investment.
I mean, I’m not interested in placing a $588 bet in extra Premiums, if all I’m going to walk away from the table with is $792. If I win, that is.
Sorry, Oscar. Nice try, but you’ll have to be a little more innovative than that to get my extra money. Which I would still put on the Bronze in this particular case.
Our next batter is Scott & White.
SCOTT & WHITE HEALTH PLAN
Scott & White is a Texas thing. Founded in 1897 by Drs. Arthur Scott and Raleigh White as the Temple Sanitarium, the hospital has now far outgrown its small-town, Temple, Texas origins.
In 2013, the Scott & White hospital system merged with the Baylor hospital system in Dallas (yes, the very same hospital where Blue Cross got its start, when Texas teachers paid a $6 annual Premium back in 1929). And today, Scott & White has two divisions:
Baylor/Scott & White Health Care is a non-profit entity consisting of 12 hospitals, more than 140 clinics, and one of the largest medical practices in the country.
The Scott & White Health Plan is an insurance company that currently covers over 200,000 participants, who can choose from either PPO or HMO models. Not surprisingly, the HMO network consists of a cast of providers that are owned by…you got it! Baylor/Scott & White Health Care.
Once again, as we go from the Bronze to the Gold, the same pattern seems to be getting a bit repetitious. Premiums go up, deductibles go down, and the Out-of-pocket maximums are, well, sort of all over the place. Let’s see what can happen if you buy into a bit of Central Texas Gold:
More of the same, yawn. The W for the Silver is the highest, so I wouldn’t go there for sure. But maybe this isn’t just more, of the same. What about that W for the Gold?
Again, you could save $594 over the Bronze plan ($11,662 – $11,068) in the unlikely event you got hit by a train, which seems like a pretty good deal. It would cost you $2,256 extra in Premiums ($7,068 – $4,812) to get that possibility in the first place, though.
So being a Texan myself, I’ll just stick with the Bronze in this roundup. Thank ‘ee.
Finally, tonight’s last at-bat, UnitedHealthcare.
UnitedHealthcare (UHC), a part of UnitedHealth Group, rounds out the last of the Big Four health insurers.
Although a relative newcomer itself, having only been founded in 1977, UHC has certainly come on strong. From the beginning it was involved in the managed care game, and has been so good at it that UHC now holds the top spot amongst health insurers, with $157 billion in revenue last year.
That’s a lot of Gold. Some of which made it into UnitedHealth Group’s CEO Stephen J Hemsley’s pockets, considering he’s brought home hundreds of millions of dollars in compensation since he joined the company in 2006.
Its stock has performed spectacularly as well, tripling in five years from $45 in 2011 to $135 a share today.
Small wonder, since this company uses the same, tried and true marketing tactics as all the others:
Well, lookee there – our first, $0 deductible. Ahhh, the good old days. You just can’t find this kind of great health insurance anymore, without spending an arm and a leg to get it.
But in this case, you don’t have to. I mean, it’s only $122 more a month in Premiums, to go all the way – from the bottom Bronze to the top of the podium, the Gold.
Here’s where calculating your annual Premium cost comes in so handy. The difference in the monthly payments may not seem to be much, but paying the extra amount won’t get you any savings in the end. Once again, all that’s Gold doesn’t glitter, once you shine a spotlight on it.
Comparing these UnitedHealthcare Compass “Balanced” plans, that $0 deductible gets thoroughly unbalanced too, by the maxed out, Out-of-pocket maximum which, at $6,850, is $350 higher than the Bronze.
And when the highest P is combined with the highest O, we see that the Gold plan has the highest W value of all three, too, at $12,382.
Tisk, tisk. I guess, so much for deductibles. Again. Sheer genius.
That’s pretty much it as far as comparing plans within the different companies for my area, as of September 1, 2016. So now I’d like to compare a few plan illustrations between different companies, just to show you that these players may all be sawing on their own fiddles, but they’re cranking out the same old song.
Oh, and in case you’re not already convinced, I also want to prove one final point: When it comes to health insurance, less can be more.
We’ll start with my imaginary wife and me:
Comparing PPOs to HMOs may seem like a little bit of apples and oranges, but to me, it is simply amazing that a married couple would even contemplate spending 1,300 bucks – a month, no less – just to have health insurance. And for an HMO plan even, where they would be severely restricted in who they could see, where they could go, and what could be done for them.
Oh well, at least this Golden plan gives that warm, comfortable feeling of knowing you won’t have a deductible:
But for $15,708 in Premiums, you’d think that Scott & White could at least throw in a few freebie, $0 PCP Visits.
Even with the Bronze plan, though, paying $7,896 in Premiums for the year the news starts out bad enough for my wife and me. And it only gets worse with the prettier metal levels, because we could spend $28,508 on health insurance and health care if we both got ran over by a train, with the Gold plan.
So, given all that I know which plan I’d choose.
How about you?
Finally, I’ll compare plans for myself and my fictional, two-kid family:
Oh man, could the news get much worse? Look at those Premiums. If I want to go for the Gold, it’s gonna cost as much as my mortgage. And I can’t even lock it up at night and sleep in it.
In fact, I can’t even wrap my head around how warped our health insurance and health care systems are, when anyone would consider that spending almost two grand a month – on something as ethereal as health insurance – could even remotely, possibly be justified.
No wonder Americans gripe about a $20 copay…
I guess the news can get much, much worse. Think about it: if I go for this Gold plan, and disaster should strike, then I could be on the hook for $34,880.
That is more than most cars cost. More than my parents’ first house. And more than half of what the average, American family now brings home every year.
Even more amazing than the amount of these numbers, though, is the amount of people who will go for this Gold – if they can afford to, that is – just to chase down that $0 deductible.
Wake up, America.
So there you have it. My quick and simple way of comparing health insurance, to find the best deal. And if reading this chapter, and seeing the data objectively isn’t a wake-up call that you’re being had, then I don’t know what is.
I challenge you to try Dr. Wacasey’s Equation to see if what you’re considering in health insurance, really is the best plan. Over and over, again and again, I’ve shown that while Bronze may not always be the best, likewise Gold almost never is, either.
In May of 2015, my clinic was asked to come and provide blood testing for the employees at a local businesses’ health fair. While there, I spoke to the head of Human Resources, who after hearing me describe the Equation agreed to show me the plans their workers had chosen from, during the previous open enrollment period.
The business had 98 employees; 47 of whom were insured by the company, which paid 100% of the employees’ Premiums. Of the 47, all but one – the Chief Financial Officer – had gone for the Gold plan. No one had taken the Silver level, and Mr. CFO had opted for the crappy Bronze.
He must have known something no one else in that company did, though. Because after I’d spent about three minutes on taking the P’s, adding the O’s, and finding the W’s for all three plans they had just considered the previous fall, I found something that shocked the HR chief.
Comparing the Bronze to the Gold plans, I showed her that each one of those 46 people (herself included) had cost the company $2,400 more in Premiums that year to go for the Gold, instead of the Bronze. That meant that her company was shelling out $110,400, so that they could keep their employees happy.
And what did those employees get, in return for all that extra money? Nothing.
Because none of them were taking any outrageously expensive drugs, so they didn’t need to upgrade. And yet, if any of those other 46 employees were riding in a car with Mr. Smarty Pants CFO, and they both got hit by a train and went to the hospital?
Well, you can probably guess what I’m about to say.
The employee covered in Gold would end up spending $987 more on the W than Mr. CFO, who had opted for the horrible, high deductible, Bronze policy.
So no matter who buys your health insurance – be it you, your employer, or Santa Claus, it pays to really know what you’re getting into.
Once again, you can pay thousands of dollars a year to have a health plan you’ll likely never get to use, or you can pay thousands more to have the promise of something that really, isn’t there.
It’s up to you.
But what about those outrageous costs – I mean, charges – of health care? With a $1,000, $5,000, or even $12,000 deductible on your health insurance next year, what can you do to guard yourself against those?
Well, it’s not nearly as bad as you think. But first, we need to bust a few more myths, so you can have an understanding of what you’re really up against.