Could you help me do the math on this, please?

21 years ago

My two health insurance options at the moment are with the same company. One costs about $225 per month (this is just for me) and has a $1000 deductible. The other policy costs about $285 and has a $500 deductible. The only other difference is that the second policy offers a prescription drug benefit.

I'm thinking if you leave the drug benefit out of the equation, the less expensive option is the better one. With the more expensive policy costing over $600 a year more, I'd spend the extra $500 no matter what healh care I required. With the cheaper policy, it's possible that I'd end up spending less month, providing I didn't need a lot of medical care.

But I suppose I shouldn't ignore the prescription drug benefit. I don't take any medications now, but I'm 61 and can't count on never needing them. I'll have to check it out to learn exactly what it covers.

On the rest of, is my thinking on the right track? Thanks for your help!

Susan

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Comments (7)

joyfulguy
21 years ago
Is your deductible per claim, per annum, or what are the parameters which trigger that potential expense for you?

Good wishes for good health - and wise use of money.

Nobody else cares as much about your money as you - unless it's to figure out schemes to transfer it from your pocket to theirs.

ole joyful
steve_o
21 years ago
I can tell you that it isn't hard to ring up $60 a month on prescription drugs -- even one prescription; nevermind several which may be needed to treat a particular condition (or the results of other medications). The other wild card here is affordability: is the additional $60/month worth gambling for? How much of a hardship is paying the $60/month now versus possibly being in it for a couple hundred a month a few years from now?
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Not sure I agree. Unfortunately we're really missing some critical information such as if or when it compounds or are you just talking simple interest? That'll make a difference. Don't know start and end dates and don't know due dates and other terms or if there's any other charges involved - presumably not. Also the way it sounds there's no payments made, so from the simplest standpoint it could accumulate as follows: Loan originates on 9/22/9 with monthly payments. 9/22/9: 10% divided by 12 months = 0.83333333333333% per month. First payment would be due the following month and interest would accrue then, not in September. 10/22/9: 453.58 x 0.83333333333333% = 3.78 (plus prior balance = 457.36) 11/22/9: 457.36 x 0.83333333333333% = 3.81 (461.17) 12/22/9: 461.17 x 0.83333333333333% = 3.84 (465.01) 1/22/10: 465.01 x 0.83333333333333% = 3.88 (468.89) 2/22/10: 468.89 x 0.83333333333333% = 3.91 (472.80) 3/22/10: 472.80 x 0.83333333333333% = 3.94 (476.74) 4/22/10: 476.74 x 0.83333333333333% = 3.97 (480.71) 5/22/10: 480.71 x 0.83333333333333% = 4.01 (484.72) From this, 484.72 would be the end balance with accumulated interest. Subtract the starting amount of 457.36 would equal $31.14 in interest and totaling the monthly interest double checks at $31.14. You put it as a "bill" so if the first due date was September 22, 2009, then it might shift things back a month and add another $4.04 to the interest equaling $35.19 in interest unless there's a credit for paying 2 days early, which I'd assume isn't the case. And if it's not paid on time, it could add another interest charge too, but I'm assuming that's also not the case. So, with the limited info, that's the best I can guess.
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zofie
21 years ago
If it were me and age 61, I would go with the second policy that offers a prescription drug benefit.
PeaBee4
21 years ago
One prescription can zap out the savings. Trust me, we've been there and done that. Another question is will either of these polices cover you after you go on Medicare? (age 65)
cowboyind
21 years ago
Usually at age 65 a person has numerous options for "Medigap" coverage that would be considerably less expensive than this policy, so Alisande would probably switch to a Medigap policy at that age anyhow. Because of that, the provisions of this policy are really only a matter of concern for the next four years.

As others have said, it's to a large degree a gamble. What I'd do is take a look at my medical spending for the last several years and use that as a guide in making a decision. If you've usually spent over $500 on medical expenses that would be covered by the policy, the lower deductible might make sense.

Also, I'd look carefully at the provisions of the prescription coverage. Just because you spend $100 on a prescription doesn't necessarily mean that the policy will pay all of that. Take a look at what it would actually pay and then compare that to what you've spent on prescriptions for the last several years.

Also, the higher deductible plan MAY have coverage for some prescriptions if they're part of a more major medical event, such as a hospital stay. That'd be something to look at as well.

This is how I'd make the decision. But in general it's true that more times than not you're better off taking on more risk yourself and buying less insurance.
joyfulguy
21 years ago
I'm thankful that I don't think that I've taken a pill in 30 years or so.

Seems to exert some influence on one's viewpoint when it comes to health insurance.

By the way - several years ago our provincial government cancelled the fees that we paid them for heath insurance coverage, but ...

As there was a change of governing party recently following an election in our province, when the incoming group found that there was a huge deficit in the annual operation of government, they were in a bind, for they'd promised no increases in taxes, were they elected.

So - they re-instituted health premiums. No fee for persons with annual income under $20,000.

My fee for 2004, half usual rate, as the program started July 1, will be about $300.

I don't mind paying it - though about the only time that I see my doctor is annual check-up, and haven't been in a hospital in years except visiting.

I am somewhat distressed with the government for lying, however - they should be careful what promises they make prior to elections: eating crow is not a healthful diet.

Good wishes to all for health of mind, body and spirit. And a good relationship with family, friends and neighbours, both within your community and worldwide.

joyful guy
gina_in_fl
21 years ago
Wow, you're lucky that you can get health insurance for under $300 a month. I had no health insurance, so decided to check out BC/BS. $525 a month, no scrip bennies. In a whole year I went to one doc and ended up with a $28 scrip. Finally figured out the the $2500 deductible just wasn't worth the insurance. $10K will buy me a lot of 'pay on my own' doc visits.

I'm now 'self insured'. It's a gamble, but seems worth it to me now that I'm taking a hand in my own health. I get blood tests via LabCorp's internet connection to check on cholesterol and anything else that might come up, I do my blood pressure checks, and in general I'm pretty healthy.

I'm gonna be 55 in a couple of months, figure that if I let the BC/BS ride but keep the premimum money, I'll be able to afford insurance if I need it, or I'll just go broke on some terminal disease.

Could you help me do the math on this, please?

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joyfulguy

steve_o

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