Monday, May 4, 2015

Choosing the Right Healthcare Plan--Let This Tool Do the Thinking For You

My friend Beth (who also wrote a post about making money as a stay-at-home-mom) has offered to share another brilliant idea with our awesome MHM readers. She, like many of us, was once struggling with health care enrollment season. What kind of coverage did she need? And which plan should she choose? No one can predict what the future holds, but even if you know about how much health care coverage you need, it's hard to tell which plan is the best value for you. Luckily for us, Beth is no ordinary woman--she's a spreadsheet pro. She created a tool for pricing out plans with the same coverage (for comparing apples to apples) and also included some advice about what questions to ask when researching different plans with different coverage (for comparing apples to oranges). I know I'll be coming back to this post whenever I'm choosing a health plan, so feel free to pin this post for later.       - Lisa



How it works:

You enter information into the pink boxes ONLY. The rest of the spreadsheet will populate from the information you enter there. Notice the spreadsheet has two tabs: (1) a blank tab and (2) an "example" tab with hypothetical inputs so you can get an idea of how to use the tool.

Once you've entered the information in the pink boxes, the result is a variety of possible medical cost scenarios in a year, from very low cost (a handful of doctor's visits in a year) to higher costs (like the need for some X-rays or something) to much higher, like pregnancy or surgery. You can play around with these assumptions if you want to. 

This spreadsheet is useful for comparing plans that differ SOLELY in terms of costs (monthly premiums, copayments, deductibles, etc.). If plans differ in terms of conditions covered then this won't help you choose between them, but the good news is that plans now seem to be required to cover pretty much the same stuff. People should have a good idea of what they personally need covered so before they buy a plan I would advise everyone make sure to get a detailed plan summary and look for the type of care they need and see what it covers.

The beauty of this thing is that when you're comparing plans that are substantially equal except in terms of cost, you can just plug in the pink box numbers and boom, you know which health plan is actually cheapest. I spent several hours making the spreadsheet earlier this year but my decision process took like 5 minutes.

Also, in my experience, the middle of the road plan is usually the best value. That's the one with the middle premiums and the middle deductibles. It seems to end up being cheaper overall because the low premium plans have higher deductibles (and the amount you save on premiums doesn't often make up for the higher deductible unless you know that you're going to go to the doctor just like once or twice a year) and the high premium plans with the low deductibles are usually so much more a year in premium payments that the lower deductible doesn't do you as much good as you think it might. But it's always good to run all the numbers to be sure.



The spreadsheet is only useful for comparing the cost of plans that are similar in regards to services covered. To determine if plans are comparable, you also need to:

(1) Request details of what the plan covers and what it does not cover. The company may not give you all of this information up-front, but when you read more details you may see that a plan that claims to have a $30 copay for a regular doctor's visit actually has a higher copay for certain other services. Or you may see that the emergency room copay is different or that there is a separate deductible for maternity. Or that the plan covers chiropractic services at the regular $30 copay but limits you to 12 visits a year. Each family should already have some idea of what services are going to be relevant to them, but some things to think about would be the coverage for emergency room, maternity, autism or other child development services, mental health, chiropractic, and prescription services. 

(2) If you take certain prescription drugs regularly (or anticipate needing to take certain drugs in the future, such as if you get pregnant), ask whether the plan covers those specific drugs. It doesn't do much good to buy a plan where prescriptions only cost you $10 if none of the drugs you take are included.

(3) If you are attached to the doctors you currently see, call their offices and ask if they accept an insurance plan you are thinking about buying. When I did that last December I found out that none of our regular doctors were going to accept any of the Marketplace ("Obamacare") plans.

Good luck!

Any questions? Post them in the comments!

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