I started a new job about two months ago and I’ve been too
busy working like a beaver to write new posts. But enough
with the excuses.
The new job offers a HSA health insurance plan but my gut
feeling told me my wife and I would be better off with
another plan. Unfortunately, I was shocked to learn that
it’s so darn hard to compare health plans.
The two main problems are:
- Each plan is different enough so that direct comparison
is tough. - Even when plans are similar, it’s difficult to compare a
list of rules and prices with another list of rules and
prices.
Then I had the “Aha!” moment. What if I turned each health
plan into a single dollar amount?
Being a nerd, I whipped up some Java code that makes
comparison shopping easier. The main idea is that instead of
comparing premiums, deductibles, coinsurance, etc., you
compare a single dollar amount. You tell the library how
many times you expect to go the doctor, the ER, etc. and it
gives the estimated yearly cost (for a given premium,
deductible, coinsurance). Repeat this for different
scenarios, and voila, you know have a more concrete idea of
how much you can expect to pay.
The code is currently unusable unless you’re a programmer.
The next “Aha!” idea is to write a simple-to-use web
interface to use the health insurance library. I’ll my
progress on GitHub as soon as I get a chance.
The Results
After running the code on a few major health plans
(Blue-Cross, United, Humana), here’s what I found:
- To compare health plans, think yearly, not
monthly. - “Value” plans are poorly named. They’re for people who
spend so much in doctors that they need a “value” plan,
not for people who are broke. - Co-payment plans are good for people who are relatively
healthy. (No major surgeries, no hospital stays, less
than a dozen doctor visits.) - HSA plans are good for people with high health costs
and/or families of three or more. - No matter how you slice it, health insurance is
expensive. Be prepared to put at least $3K away each year
plus your deductible.
So I ended up going with a co-payment plan. When my wife and
I decide to have kids, we’re switching to an HSA plan.
