Health Insurance – School Insurance an Affordable Option

We just entered the Open Enrollment period for my wife’s work, so we have to choose what health insurance options we want for 2006. This is actually pretty good timing since I am now also eligible for health insurance for as a student at my University.

Since I left my job in July, I’ve been added onto my wife’s health plan for an additional $200 pre-tax a month, a pretty good deal. Next year, it’s only going to be $160/month. I don’t have any current health conditions, but I feel it’s very important to stay covered at all times. The insurance plan is a pretty decent PPO, especially if you stay in-network (I don’t really have any preference towards any specific doctor). In-network, the plan has a $200 annual deductible per person, and an annual out-of-pocket maximum (including the deductible) of $1,200 per person. There is a $2,000,000 lifetime maximum benefit.

My University offers health insurance at $500 a semester, or about $84 a month post-tax, since it offers continuous coverage year-long. The annual deductible is $150/year. You basically have to go the Student Health Center for everything, and then they refer you out. However, there is a lifetime maximum of $50,000 “per Covered Injury or Sickness”.

Overall, the other benefits look pretty similar – 80%/60% coverage for In/Out of network. The difference in maximum benefits concerns me. I don’t know how far $50k goes these days in a hospital, but I don’t think I want to find out. Since my wife’s plan is pre-tax, we’d be paying about $120/month post-tax vs. $84 with the school plan. I’m most likely going to stay with my wife’s plan. I just feel safer with my wife’s plan, and also it’s nice to know that way we would be staying at the same hospital if we were somehow injured together.

But, I’m still glad the University offers such an option – it’s very affordable at less than $100 per month, especially if you do have pre-existing medical conditions since it doesn’t require a physical to qualify or anything. There is a six-month waiting period if you haven’t had insurance for the past six months.

Mental note: I also wanted to look into those high-deductible HSA plans, as I am still relatively young and healthy, and could build up some money in a HSA to grow tax-free. Are these only offered by employers or independent providers too?

Comments

  1. Please wither post about your digging into the HSA as we have the same decision to make. They seem pretty good to me.

  2. Please WRITE (sorry for the typo)

  3. Yes definitely stay insured at all times (more on that at the bottom).

    I was unemployed a few years back and cobra’ed my existing benefits, which cost me almost $200 per month. If I was going to do it again — I would probably do a high deductible catastrophic care coverage instead. I am healthy too — and didn’t really the copay/low deductible coverage. And since I ended up doing some contracting, I was on cobra a lot longer than I thought I was going to be. Going the full coverage route ended up costing me an additional $150 per month that I could have saved.

    Now, for the reason to stay covered. . . .

    The insurance companies negotiate special deals (like 50% off) with the hospitals. So if you are not covered and have to go to the hostpital — you end up paying a fortune for even simple proceedures. If a person has no assets, well — they may not be able to get blood out of a turnip. But if the person has savings, retirement, etc — then they will come get it. There was an article in the Wall Street Journal on this a few years ago that stuck in my craw.

    Good luck in school.

    Cheers,

    Jake

  4. A little insight into how far $50k goes… Not far… :)

    My wife went into the hospital for a hysterechtomy on Aug 5th. The surgeon put a hole in her small intesting which caused an infection. She spend 27 days in the hospital including an additional surgery (to repair the hole) a few days in intensive care (there was some concern whether she was going to make it or not)

    She’s fine now (still gets tired easy), went back to work this week in fact. I’ve yet to see all of the bills but the total is North of $120k. We definately hit out out of pocket max of $2500 (BCBS through her work)

    I also agree with the previous poster. BCBS payed a *lot* less than the $120k sticker price. Not having insurance would have killed us financially.

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