To pay, or not to pay? That is the Question…

To pay, or not to pay… I’ll admit it, I’ve never been great with math. Except for subtracting from my bank account, as my CPA likes to remind me.

But I am pretty fair at addition. And when I took keyboard and mouse to five local school districts’ open enrollment info, I found that my previous assertions about health insurance still hold true.

Less equals more. A lot more.

Because it turns out that no matter what, by some strange, as-yet undiscovered law of mathematics, the common denominator in every case is that it makes the most economic sense to buy the lowest-priced, highest deductible plans.

From single employees to a whole family, and every permutation in between, thousands of dollars can be saved by choosing the lowest-priced plans.

“But what if I get sick and need my health insurance?” you may ask. Well, let me just say that that’s where you can really save some money.

And as my buddy Glenn Beck says – don’t take my word for it! I’ve included links to each school districts’ employee benefits pages so you can plug in the numbers for yourself.

To compare these health insurance plans, I’ll use a simple yet powerful tool I call Dr. Wacasey’s Equation – just remember P + O = W and follow along.

And now without further ado, let’s start with the administrative district of my alma mater Haltom High School. Ladies and gentlemen, I give you the Birdville ISD:

BISD 2014

As I’ve said before I know, it’s a lot. Here’s a quick review of some important terms:

The first variable you need to pay particular attention to is the Premium (P), or how much you have to pay to purchase your health insurance (not health care).

Next take the Out of Pocket Maximum (O), which is the amount you would have to spend on co-insurance, co-pays, etc. above and beyond the deductible.

Add the P and the O together and you get What You Might Spend (W) on health insurance AND health care, if you get really really sick in a given year.

By comparing the W values, you can easily see which health insurance plan would be best.

Just look at the W’s as you go from the Bronze to Silver to Gold plan in each of the categories listed for Birdville ISD.

 

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Remember, in the health insurance game less – is more.

Next up, benefits for the Grapevine/Colleyville ISD, where my kids go to school:

GCISD 2014

 

Comparing the W’s for educators, administrators, and other employees of this district still follows the pattern; Silver and Gold don’t beat Bronze.

Because the difference between the Bronze and the Gold for Employees is $2,410, for an Employee + Family it’s $6,156, and for a poor Employee + Spouse it’s $8,244!

Take a look at benefits for Hurst-Euless-Bedford ISD employees:

HEBISD 2014

Again, buying the more expensive, so-called “better” plans with a lower deductible just doesn’t make any sense.

I mean, look how those buying the Silver and Gold plans actually get punished with higher Out of Pocket Maximums in most of the plans – from $9,200 to $12,000! And this is supposed to be more comprehensive health insurance coverage?!?

In fact, look at the Employee + Spouse plan. You’d definitely spend $5,244 more in premiums just to potentially save $2,000 off the deductible.

I don’t know about you, but to me this just doesn’t add up.

 

Just look at the last chart for the HEB ISD. Comparing the high deductible, Active Care 1-HD plan with the low deductible Active Care 2 plan that has “better coverage,” you can see that an employee would spend $7,550 vs $9,960, an employee and their spouse would spend $16,700 vs $24,744, and an employee with a family would be on the hook for $4,936 ($25,176 – $20,240) more for the “better” plan.

 

With the next school district, it gets even more interesting. Unfortunately ya gotta be an employee to log into the actual site, but here’s the benefits page thanks to a friend who works for the Keller ISD:

Keller ISD 2014

I’m fascinated by the fact that the Out of Pocket Maximums are the same across the board for each plan option. What this means is that there is NO BENEFIT to paying a higher premium. None. Zilch. Bupkis.

What this also means is that there is NO BENEFIT to having a lower deductible policy.

Don’t believe me? Look, an Employee + Family could pay $8,383 under the Major Medical plan, or they could pay $12,998 for the High Option plan that supposedly provides better coverage  – because of the lower deductible. That’s a difference of $4,615 in premiums that family would have to pay for the year.

But suppose this family gets in a car accident, and reaches the out of pocket maximum as stipulated by the policy. If you subtract the Major Medical W value of $21,083 from the High Option W value of $25,698, then voilà! You get the exact same number of $4,615.

So what?

So this: if

buy the Major Medical, high deductible plan, you will put yourself at risk to maybe spend $4,615 in potential health care expenses. But if you buy the high Option, lower deductible plan, then you’re guaranteed to spend the same amount – $4,615 – in premiums!

Last but not least, I wanted to throw in a district from another county. So here’s the skinny for folks who work in the Plano ISD .

Plano ISD 2014

 

The most interesting thing I’d like to point out applies to every one of the plans offered by all of these school districts.

If you do the math you’ll find – in every case – that any time an employee chooses any plan above the higher deductible, Active Care 1-HD policy, then that employee loses money. Lots of money – thousands of dollars a year, in fact.

So…it’s time to rethink how you shop for health insurance, since shifting risk to a health insurer means spending more – much more – than you would by assuming that risk yourself.

Remember, It’s not the COSTS of health care that are outrageous…it’s the CHARGES.

Physician. Health Insurance Agent. Author. Health care humorist. Medical satirist. Disruptor. At your service. My name is Kevin Wacasey, and I’ve been practicing medicine since 1994. When I graduated from medical school, I took an oath to do no harm to my patients. To me, that includes financial harm. But since health insurance took over health care over 40 years ago, health care prices have skyrocketed. And despite what we’re told by the media every day, it isn’t the costs of health care that are outrageous; it’s the charges. So if you’ve ever wondered why we spend so much on health insurance and health care, then come along and join me as I explore the crazy world of Healthcareonomics. Health care doesn’t have to be expensive. Let me show you how. For speaking opportunities and to pass along your questions/comments, please email me at drw@healthcareonomics.com.

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