My Health Insurance, Let Me Show You It

I've been meaning to post about health insurance for some time now. You may remember my frustration back in the fall, as I (a Finance & HR professional, fer chrissakes!) tried to suss out exactly what Michael's employers were offering us for 2008, and how much it was going to cost us, and how I failed miserably. Would it surprise you that it's taken me three months of living with this fakakta plan to understand what it actually does? And, would it surprise you that I'm keeping verrrrrrrrrrrry detailed records of all of the expenses and reimbursements and deductibles and nonsense?

Would it surprise you that I'm eager to share all of this crapola with the pretty internets?

Here's the dope: my employer covers my health insurance in full at company expense, and if I add any dependents, I pay their entire freight. Michael's Big Corporate Employer offers an array of plans from which to choose, with varying levels of employee premium responsibility. His company pays a portion of the premiums for dependents, so we have always enrolled the kids in his company's plan. Used to be they'd offer at least one straight-up, no-deductible HMO amongst the menu. No longer. After beating our heads against the dining room table repeatedly careful consideration, we chose an Aetna plan which includes a $2,000 deductible, wherein Michael's employer funds a Healthcare Reimbursement Account (HRA) on our behalf up to $1,000. In other words, our net deductible (for Michael and the kids) will be $1,000. I have a straight-up PPO plan through my lovely employer, so I'm only on the hook for (hefty) co-pays. (I choose the group insurance for our staff, so I have only myself to blame.)

So what's this all costing? I don't have a firm figure for what Michael's employer is paying for him and the kids, but given my knowledge of the benefits market, I think $600/month is a good guess. Plus, of course, his employer is paying $1,000 into our HRA. We pay an additional $120/month (pre-tax, through payroll deductions). My employer pays $212 for my PPO from Health Assurance.

TOTAL ANNUAL PREMIUM & DEDUCTIBLE COSTS:
$10,744 (employers/estimated); $2,440 (us)

So far, in our little dual-career, upper-middle-class family of professionals, we're paying 18.5% of our family's health insurance costs for the year.

But the fun's just starting....

Until we reach our $2,000 deductible for Michael and the kids, we are paying full retail out-of-pocket for everything. Doctor's visit? $133. Asthma meds for 3 months (for ONE of the four asthmatics in the house)? $500. We have already chewed up the entire $1,000 HRA and are plunging head-first into the second $1,000 of the deductible. And it's only March.

But here's the tricky part. After we reach the top of the second $1,000 of the deductible, we stop paying full retail and start paying co-pays. I figure we'll reach this point around June at the rate we're going. And the truly flummoxing issue is that, in addition to the HRA, we have a Flexible Spending Account (FSA) with Michael's Big Corporate Employer, which allows us to designate an amount of money to be withheld from Michael's check each month (tax-free, of course), to be used for reimbursement of medical, prescription, OTC medical expenses for the whole family.

If you think I lost sleep trying to decide how high to fund the FSA, you'd be right.

We finally just stuck a pin in it and funded it at $3,500 -- higher than in past years, due to the $1,000 of deductible we are going to have incurred. The FSA is use-it-or-lose-it, so if we have any kind of balance left at year-end, on quiet nights you will be able to hear me weeping softly into my tequila. But honestly, I think we're pretty safe at $3,500, as the drug co-pays on Michael and kids are outlandish.

So what I think I'll do is post periodic updates. You'll hear about it when we top out the deductible, and you'll hear about how much money we're paying in co-pays. So far we're out of pocket a whopping $1,500 (including the $1,000 that gets reimbursed) for the year (including dental and vision). I'll be VERY curious to analyze our year-end numbers, comparing premium + out of pocket expenses against full retail costs for all of the services we use, but I'm not sure I'll have access to enough info to do that. I suspect that I'd find that the insurance company is making money on us.

The bottom line is: if it takes a reasonably smart Ivy-League graduate who does benefits as a (part of her) profession this much time, effort and angst to really understand this brave new insurance world, what hope is there for the not-as-educated, not-as-motivated among us? I fear that the insurance companies secretly hope that we're all going to become so annoyed and frustrated by them that we're going to stop paying attention to what our benefits are -- and then they'll really have us by the short and curlies.

Do you know how much you are paying of your health insurance burden?