An easy way to quickly compare costs on PPO (deductible) styles of health insurance plans
The main considerations are normally Doctor Visits, Prescription, and Hospital, and sometimes Maternity and Chiropractic.
Everyone has different concerns, these are the usual hot points.
You should definitely read coverage details of any plan you are interested in before you start comparing plans.
You should only compare two plans that are both acceptable for your needs, and now you want to know which one makes more sense financially.
Having presented thousands of comparisons about Health Insurance I have found a simple way to compare High Deductible plans that cost less, to Low Deductible Plans that cost a lot more. It is basically this:
Add up the annual cost of the High Deductible plan, say $100 per month times 12 = $1200 per year.
Add up the annual cost of the Low Deductible plan, say $300 per month times 12 = $3600 per year.
Subtract the smaller: $3600 minus $1200 = $2400, that is the yearly savings if you choose a High Deductible Plan.
Now, you don’t use the deductible to compare, but a feature of PPOs called “Maximum out of Pocket” or “Stop Loss”. The “Maximum out of Pocket” is your worst case scenario, like if everyone is sick in your family at once, or everyone is injured in the same accident, and you all meet your deductible, and co insurance up to the “Maximum out of Pocket”, say $10,000 for a family.
At that rate, saving $2400 per year, you would have to go about 4 years without an accident/illness to save the money you would need in a worst case scenario.
In my own case, family of 5, Los Angeles rates, a Low Deductible Plan is over $1000 per month, a high deductible plan is less than $300, we save over $8000 per year, and have been saving for over 12 years (we have an HSA, with a $3400 deductible, $10,000 max out for the family).
Many newer High Deductible plans like TONIK, from Anthem Blue Cross ,include Preventative, Dental and Vision benefits, which are more likely to be used than major medical. We all need a teeth cleaning, we don’t all need a transplant, so those plans make sense to many people, and are extremely popular.
My comparison system still works, you simply add the cost of buying separate Dental and Vision to the cost of the plan without them, that really makes the newer plan including those benefits desirable, if you would use those extra benefits.
It’s a simple rule really, and can be applied to other benefits, like Glasses on a Vision plan:
Vision coverage is $3 per person per month, with Lenses and Glasses covered it’s $10.
You have 10 in your group, so that is $100 per month, $1200 per year.
Only two wear glasses, everyone else just needs the exam.
You only need exams for most, so that’s $3 per month times 10, $30 = $360 per year.
You simply buy new glasses every two years for the two who wear them, and save $840 per year.
Once again, the focus here is on financial aspects of insurance, not the benefits, which must be weighed separately, and could be called “Getting a good deal”. This method can tell you if you are “Getting a good deal” financially, comparing benefits is another story. Which I intend to write soon!
Jeffrey Peterson is a Health Insurance Agent for California, Nevada and Utah.
His current best selling plan is TONIK
He helps his son Brian with a Ghostly hobby site Scareo, Ghost Pictures, Stories and Video.
