Hi, I started a new job on Aug 1, and due to some conflicting information, completely missed the 31-day window to enroll for health insurance. I know.
So, as a default, my employer has signed me up for their “Core” program. The website describes it variously as “high deductible,” “catastrophic,” and “fee-for-service.”
Can someone explain in short words what this means? Open enrollment is happening in November, so I can change to one of the other plans then. But do I want to? I’m healthy, and was up until recently covered by my husband’s insurance. My only ongoing medical expense is the Pill.
Any potential problems with this situation? I’ve lived in the US for 6 years, and am just horrified to have to jump through these hoops. (I’m Australian. Socialized medicine FTW.)
“High deductible”, “catastrophic” and “fee-for-service” are sometimes code for minimal insurance to cover you should you have a catastrophic illness or accident. Think of a horrific automobile accident or getting cancer. It wouldn’t cover routine medical issues, which you would have to pay for your own pocket.
If you are young, and in relatively good health, you can do okay with the current plan you have, but if you go to the doctor frequently, have a significant medical condition you are currently dealing with, or have procedures that you will need to get taken care of, this will soon become quite expensive for you.
A “deductible” is a dollar amount that you must pay out of pocket in a certain time frame before your insurance kicks in. E.g. if your deductible is $5000, you must pay the first $5000 worth of expenses before the insurance pays anything. “High deductible” means that that number is relatively high.
“Catastrophic” means that your insurance pays for “large” medical expenses, implying that it doesn’t pay for small ones. So $500000 to re-attach your leg after a car accident is covered, but normal check-up/cough and cold doctors visits aren’t.
“Fee for service” essentially means that the doctors give you or your insurance company an itemized bill, and they pay it, as opposed to payments based on outcomes or something like that.
High deductible, catastrophic health plans are something of a current fashion, based on the idea that ensuring expenses that you know you for certain are going to incur (like checkups and minor issues) is silly, and that insurance should only cover things that typically don’t happen, but are oppressively expensive to treat if they do, like losing a leg in a car accident.
Well, it’s kind of hard to say without looking at the plan documents. These should be available to you from the HR department. Take what advice is given here and verify it through your insurer before acting.
Generally speaking, “high deductible” plans mean you pay a low administrative fee each month, but your deductible is very high, likely upwards of $5000. This means that you pay all the costs of the healthcare you use and insurance doesn’t “kick in” until after you reach that deductible each year.
They are called catastrophic plans as small medical costs such as going to the Dr for a cold will be paid by you out of pocket (until the deductible is reached), but something big like a broken leg or major surgery would be covered after subtracting the remaining deductible costs. Some “preventative care” visits are covered 100% and I believe that birth control now is covered 100% as well.
The upsides are the already mentioned low monthly cost and they are usually linked to a Health Savings Account (HSA). You are allowed to put pre-tax money into an account that can only be used for medical expenses. This account rolls over year to year and is yours to keep as long as it is used for medical expenses. The benefit is while you are young and healthy you can put a few grand tax free each year into the HSA and hopefully not touch it. When you get older you could have a significant nest egg to use to cover later life health costs–even if you are under a different plan.
Each plan is different, so be sure you talk to someone in your company that can answer your questions. But in general know that if you go to the doc before your next selected plan kicks in, you are probably going to pay out of pocket.
I don’t have anything to add to what has already been accurately stated. You were default-enrolled into an insurance plan, with open enrollment in just a few weeks - this is good as you have time to evaluate the current plan against your current health insurance utilization.
A side note – check thus with your HR department. I believe that under the provisions of the ACA, your birth control pills and annual Well Woman visit are covered even under high-deductible plans. Be sure to double-check this before you see your doctor for your annual visit, and ensure that that your doctor is in-network.
Others have covered the definitions of the terms very well.
Not necessarily. High-deductible plans are often still the best value for the money because the monthly premiums can be quite low, some employers may kick in part or all of the deductible, and, if you go with an HSA (health savings account) to cover the deductible, you get a tax break for that.
My employer offers a traditional 80/20 plan and a high-deductible plan. I have a chronic disease that is very manageable, but quite expensive, so I will max out the deductible every year. I thought for sure the 80/20 would work out in my favor, but after crunching the numbers, the HD plan turned out to be cheaper.
An additional consideration in favor of HDHP/HSA arrangements is that when they are first offered employers generally kick in a portion of the deductible to make them more attractive. Over time, the younger, healthier employees generally migrate to the HDHP and the older, sicker ones end up on the PPO or HMO alternative(s). So the risk pool of the latter plans gets smaller and the cost per life goes up - so the employer’s cost and employee’s cost also go up.
So if your employer starts offering an HDHP/HSA you’ll usually want to get in on it right away.
Thanks, everyone. I found the deductible, it’s $3K.
I wonder how much a standard office visit costs out of pocket. I have no idea how to find that information.
I’m not signed up for a Health Flexible Spending Account, but maybe I should sign up in November.
This is terrible. You people that are inured to it (e.g., maxthevool, my American husband) maybe don’t realize it, but this is just an awful, awful system. I’m not saying the Aussie system is perfect, but it’s a hell of a lot better than this.
The insurer should have a list of authorized providers online who will charge you a “contract rate”, or a fee slightly lower than the self-pay rate. You can call the ones that are close to you and ask what they charge. It’s normally $80ish around here for a GP/PCP, but if you’re in certain urban areas it can be much higher.
Good luck. This info is impossible to find in my experience. Even if you do get someone to cough up a number, it almost certainly not what you’d end up paying. What you will pay is not what the doctor charges, but the “negotiated rate” of your insurance plan. Good luck getting that number as well.
What you want with a High Deductible plan is an HSA, health savings account. A “Health Flexible Spending Account” might be different. Your employer can help you with this.
I am inured to it because it’s my only choice, but I also know it’s an awful, awful system. Single-payer makes SO MUCH MORE SENSE but hell if we’ll ever get one in my lifetime.
Tell it, sister. I was raised under the Canadian system, and it’s just amazing the amount of thinking about it that goes on in the US system. For people who grew up in the American system, i find that it’s hard for them to even imagine what it is like to not have to worry about these things.