Choosing an Insurance Plan

For the first time this year, I am going to be eligible for medical benefits under my new employer. This particular place of business offers three types of plans with different coverage, and at once I went to work spreading all of the papers over the living room floor trying to distinguish which would be best for an employee that needs a lot of healthcare, namely me.

Corey walked in and said,

“You know, you are the only person I know who actually reads all that stuff. I never read any of it,”

“And that is why you are shocked when you get a bill in the mail for several hundred dollars after a doctor’s appointment,” I replied.

I think a lot of people believe that as soon as they have whatever it is called benefits, healthcare is suddenly free, available wherever they want, and their benefits cover everything kind of appointment they’d like to make. I think that is the first mistake, and by not reading (or even by reading and not understanding how your benefits work) about your benefits package you’re really setting yourself up to have your pockets picked.

You should be taking advantage of these benefits, not the other way around.

I thought I would talk briefly about how you can go about getting the best care under whatever insurance plan you choose, which is something that can be difficult when you have a chronic illness or disorder (like bipolar disorder).

Looking Back

First, I’d just like to point out that for a very long time, someone with a mental illness could be denied coverage for treatment of that illness if they had it before receiving insurance coverage, or if they switched insurance providers after being diagnosed. Obviously, that is total bullshit, and I can’t tell you how many times I have been denied coverage for having bipolar disorder.

Thankfully, Obama (whether you love him or hate him) did away with that, so it is now illegal for insurance to deny coverage for “pre-existing conditions”. That is a definite win for those of us with diagnosed mental illnesses, though there are still several ways health insurance providers can deny coverage to what we need. I’ll get to that.

The Deductible

Ok, now when you’re looking at an insurance plan, they will often tell you how much it will cost you to see a provider in their “network” (one that takes that insurance plan) and how much it will cost you to see a provide who doesn’t (“out of network”). What many people skip over, though, is that chunk of money called the deductible. 

This is the amount of money that you have to pay before your insurance provider begins to chip in on your bills in many different types of situations. The higher the deductible, the more you will have to pay out of pocket before sharing the cost of your healthcare with the insurance provider.

Some insurance companies will allow you to avoid paying this if you see doctors in their network, and will only charge you a “co-pay” (a flat rate to see these doctors). However, the deductible will still need to be met for other types of care (so think about things like lab-work if you are taking lithium) or if you want help paying for doctor’s visits outside of the network.

Your Doctors

The first thing I would suggest doing is making a decision about what doctors you want to see. Do you currently have a psychiatrist or therapist who you can’t see yourself leaving, or would it matter if you saw someone brand new?

  • If you are willing to see all new doctors, you can probably use “in-network” doctors to avoid having to pay the deductible right away. If this is your chosen course of action, I would suggest going to the insurance provider’s website and doing a search for the types of doctors you want to see (to see if there are any in-network in your area).
  • If you already have a team of doctors you like, I would suggest calling each of their offices and asking if they take the insurance you are considering purchasing. If you are lucky, there is a chance that they might! If they don’t, though, that means they will be “out-of-network”, and will require you to pay for all visits until that deductible amount has been met. After that, some plans share the cost of visits (60%/40% for example).

If your doctors are out of network it may be wise to figure out if you will be paying for enough visits to actually meet that deductible.

Take your (cost of one visit) X (number of visits you plan to take in your plan year) =

If n is less than your deductible amount, it is possible you will be paying for all of those visits out of pocket. Remember, the insurance doesn’t kick in any money until this amount of money has been paid.

If is more than your deductible amount, you can expect to meet that deductible and then have insurance help pay for the remainder of your appointments.

So, if I see my psychiatrist (which costs roughly $100 per visit) once a month, that would mean $1200 annually (as I’d be in there 12 times per year). If my deductible is $500, that would be a great deal, whereas if my deductible is $1000 it would be a bit less-so. I would probably only save (in that case) about $80.

At the same time, I want to be sure to be clear that just because the amount of visits you predict doesn’t meet your deductible, it doesn’t mean you wont meet it. Other things like lab work might go toward it, or emergency visits you may not know will happen in the future, or the cost of certain types of appointments.

What do they cover?

Most of the time I have had the option of being enrolled in an insurance plan, I am provided with a booklet that outlines everything that is covered or not covered. If you were not provided this information, ask for it. Remember when I said there are still some ways insurance can deny certain things? This information is particularly important for mental healthcare, as some plans with not cover or limit the number of therapy appointments they will cover, among many other things which may be vital to our care.

What types of appointments do you expect to use? Acupuncture, massage therapy, talk therapy, inpatient hospitalization (in the event of an emergency)? Make sure you look up whether those things are covered by your potential insurance plan or not ahead of time. Some things, like therapy, may not be covered, but the amount you spend on it might be able to go toward your deductible. Other things, like massage therapy (or even psychiatry) might only be covered after a series of approvals from other doctors (basically someone signing off that you do need these services). This notion can be a bit daunting, but I’ve found that with a solid history of mental illness in place, I have never had problems being “approved” for the type of care I need. It is just another hoop to jump through, because without jumping through it they can potentially charge you without covering any of the amount for the appointment.

Personally, I’ve found it difficult to find a therapist that will actually take insurance, most of them are extremely wary (because insurance companies generally don’t pay the therapist in a timely manner). If you go to a clinic (and not an independent provider) you may have more luck with insurance and therapy fitting together better.

Annnnnd Medications…

Not all insurance plans are created equal, and not all medication coverage is equal either.

Most plans no longer have a “one-size-fits-all” approach to medication coverage, so it is no longer a question of whether a medication is covered or not. Many of the newer setups I’ve seen involve tiers, with generic drugs being in the cheapest tier. This part gets tricky, because anyone who has to be on a brand name version of a drug with a generic counterpart pays heavily for it, so if I were to need Risperdal (instead of the generic Risperidone) I’d probably pay $100 for my prescription instead of the $10 it would cost for the generic.

Mental health is one of the areas where I see this as being something of a cheat, because there are many people who either don’t have any luck with the generic counterparts of our medications or are on a medication that doesn’t have one yet.  Obviously, these drugs are still discounted, but not as deeply discounted as others.

I would suggest making a list of your medications and looking them up (most insurance companies should have a database of how much each given medication will cost). In one instance, I found that it is cheaper for me to buy Lithium at Target than it is to get it through the insurance plan I signed up for (which is a little baffling) so getting an idea of how much your medications cost now vs. how much they would cost on insurance can be an eye-opener. If you want to multiply that cost by 12 (if you fill monthly) you can get an idea of how much it will cost for the whole year.

Oh, and most insurance companies do not count medication co-pays toward your deductible, so anything spent on medications probably wont count toward reaching that amount.

Putting It All Together

Alright, so I am kind of a nerd so I usually like making up a grand total of what things are going to cost me. For those of us that need more healthcare than others, I have run across some insurance plans that would actually cost more for me to have than if I didn’t purchase insurance at all (which can be a little disheartening).

To see the difference between how much things will cost with insurance and how much they will cost without (or to compare one insurance plan with another) you can create the total cost for each situation.

First, figure out how much healthcare is costing you now:

1. The cost of your doctor visits for the year (the cost of the appointments times the number of times per year you go)
2. The cost your medications for the year (the cost of each medication times the number of refills you get per year)
3. The cost of other expenses, like therapy, lab-work, etc. (the cost of the appointment or lab-work times the number of times you go/have it done)

And add 1-3 together. For me the total is averaging about $10,000 this year and I would say that is probably a more modest estimate (compared to other years).

So next, figure out how much that same healthcare would cost with the insurance plan you are looking at. You will need to take into account everything we’ve talked about so far, so whether you are planning on using in-network doctors or out-of-network doctors (or a combination), if things like therapy are covered, and what the deductible looks like. This is a little more tricky, but here is a general step-by-step.

1. The cost of your doctor visits for the year (the cost of the appointments with insurance (either an out of network cost for non-network doctors, or the in-network copay) times the number of times per year you go). You can repeat this step for each doctor you see, or each type of doctor you see. You may also want to use this step to figure the cost of seeing your therapist, or you can wait for therapy until step 3.

Now, if the amount totaled here for non-network doctor visits is bigger than your deductible, subtract your deductible from this total cost (so if I spend $1500 on non-network doctors visits and my deductible is $1000, that leaves $500). With the amount left, multiply by the amount you are responsible for (so if your insurance covers 60% after the deductible is met, for example, you are left to pay 40% of the total amount. $500 x 40% = $200). Instead of paying $1500 on those doctors appointments, you would meet your deductible and only pay $1200.

It may not seem like this is saving much, but if your deductible is already met, that means you will have no deductible left to fill for lab-work or out-of-network therapy appointments.

2. The cost your medications for the year (the cost of each medication co-pay times the number of refills you get per year). Remember some medications might cost more than others depending on the insurance plan.

3. The cost of other expenses, like therapy, lab-work, etc. (If your therapist is in-network, multiply the co-pay times the number of visits. If they aren’t, have you met the deductible with other out-of-network visits? If so, multiply the total cost of therapy appointments for the year by the amount you are responsible for. If you go weekly and your visits are $100 apiece, you would potentially spend $5200 for the year. If insurance covers 60% (for example) after the deductible is met, you are left to pay 40%, so $5200 x 40% = $2080. If your deductible isn’t yet met because you’ve only seen in-network doctors, we would subtract the deductible ($1000) from your total ($5200) and multiply the remainder by the amount you are supposed to pay ($4200 x 40% = $1680). If you were only using an out of network therapist (and nothing else) you might still only pay $2680 instead of all $5200.

Lab work usually works the same way.

So, again, add 1-3 together and then for this total we will also:

4. add the cost of your insurance plan for the year. Let’s not forget, unless your insurance cost is covered entirely by an employer or government plan, you are probably paying weekly or bi-weekly to keep it active.

Ideally, this is when you would know if the insurance is a good deal or not, or if it covers the things that are important to you and your healthcare. 

My final suggestion is to consider the FSA.

If you are being offered insurance by an employer who also offers the option of a Flexible Spending Account, I would highly recommend it. I am not someone who has had much money, so this is the only way I’ve been able to pay for healthcare before actually saving enough money from my paycheck to do so.

The FSA deducts equal amounts from your paycheck on a pre-tax basis, and you can choose the amount you want deducted. That money, though deducted evenly through the rest of the year, is available to you immediately for using on your deductible, co-pays, medications, and a whole long laundry list of other things. The only thing I would say to watch out for is that at the end of the year, if you don’t use the money in that account you lose it. Personally, I’ve never had trouble with that (and always used all of mine very early on with the number of doctor visits I have) but it is something to consider.

I just had to decide between three different plans, and I read everything I could get my hands on and then made an excel spreadsheet to help me add everything together and compare. I requested more information on the insurance provider several times, called my doctor’s offices to ask about their relationship with my potential plan/insurance provider, and I feel confident that I know what is and is not covered.

Yes, I have bipolar disorder, and I am now working at a job that is pretty huge. If nothing else, that is a big reason to pay attention to how my new insurance works and know how it will support me and when it will not.

I think it is important for anyone to understand how insurance works, but it may be much more critical for those of us with pre-existing conditions that require careful monitoring and care. Knowing how to get the most from your insurance provider allows you to tip the scales in your favor, and might mean the difference between taking advantage of your insurance or your insurance taking advantage of you!

7 responses to “Choosing an Insurance Plan

  1. Very good advice. I sound like Corey & find it hard to concentrate on the small print even though that’s where the devil lies!

  2. What happens in America if you’ve got no insurance and can’t pay for treatment..? Do you just get no treatment at all? And what if it’s an emergency? What if it’s a life or death situation? … I cannot understand America. (I’m British BTW…)

    • The course of what happens next would depend largely on how much information the person with no insurance has. It is common for people with no insurance to go without treatment, (as many specialists like psychiatrists require the money up-front before an appointment) or receive treatment in emergency situations (in the emergency room they aren’t allowed to turn you away for not having insurance, but the cost is significantly higher than seeing a typical doctor) and become severely in debt. There are things people can do to avoid both situations, though, like apply for financial aid for their healthcare at a local hospital and have their bills covered by charity, or apply for state healthcare programs (which aren’t very good, but might be better than nothing). The trouble is that most people don’t know that they have these options, so they either find themselves in a huge amount of debt or receiving no treatment at all.

      I expect things are going to be changing a bit (the government is going to begin requiring everyone to have insurance, which I guess is the capitalist version of just providing healthcare that is affordable in the first place) when the “healthcare reform” kicks in, but I’m still not sure on how that will effect those who, frankly, can’t afford anything.

  3. very good information, thank you for writing this. Regarding medications, there are options for cheaper drugs for people who have no prescription coverage. If the doctor is willing to write the prescription for mail-order, Canadian mail-order pharmacies often offer cheaper prices for name-brand drugs and generic drugs that aren’t available in the USA. In addition, there are “discount cards” that are good at some (not all) pharmacies; the cards do not always give a discount for top-line medications.

  4. This is a fantastic post! Very helpful – I just changed insurance this week. So, um, this is long…

    When I changed employers, I had the option of health plans – one of three. But all three are network, and my employer is in the Southwest, while I’m in the Northeast, so basically that coverage would be exceptionally expensive, prescriptions aside. Instead, I went on my husband’s insurance. It’s taking a LOT more out of his paycheck (retroactive contribution to FSA included) but the amount he’s putting into the FSA is about what I was paying in copays every month!

    The new insurance is full coverage for both services and prescriptions, using a special debit card to pay for those expenses. His employer covers the first $1500, then we cover the next $2000, and then the company kicks in until we hit $11,000 – after that, the insurance company covers the rest. The services covered are pretty comprehensive and there is no stupid limitation on “specialist” (i.e. not GP) visits. My old insurance limited me to one per day, which meant that I couldn’t just spend one day doing my three or four health appointments in a week. No, they had to be scheduled on different days. That was insanely inconvenient, especially once I started having an office to go to a couple days a week.

    Since the coverage also includes vision and I desperately need new glasses but have to get progressive lenses that cost around $600 (and hubby’s due for eye exam and glasses too) we’ll burn through the first $1500 in about a month. My prescriptions are actually pretty cheap since they’re all generics, though the Adderall is over $100/month. However, I have an average of 7-9 healthcare provider visits/month as well, between therapy, DBT, psych, and anything else that crops up – plus the periodic labs of all flavors. So we knew that we’d spend the entirety of the FSA in under 4 months (FSA balance does NOT roll over to the new year!)

    Another nefarious trick with networks is co-insurance. I found that one out the hard way. For my last insurer, if I went to an out-of-network psych, which I did for awhile, I could wait about 12 weeks for reimbursement. But not only was that subject to a fairly large deductible, there was also copay on top of it, and then co-insurance too. After I hit the deductible, I had to pay a higher-than-normal copay, and then a percentage on top of it for the co-insurance. It meant that a $275 visit would be reimbursed at about $20 on average. Needless to say, I changed psychs pretty quick once I realized how much it was costing me – but it took several months to find out, during which time I racked up a couple thousand in credit debt waiting…

    • The plan you are on now sounds very similar to one that is offered by my new employer, but I chose to stick with paying the deductible up front because the only therapists available in Seattle are out of network, which means my deductible will be hit within the first two months I’m on the plan.

      Well, I hope your new set-up is an improvement… it sounds like it should be! Thank goodness for FSA accounts, because otherwise I wouldn’t have that money available up-front for the slow-to-reimburse out of network appointments.

      And hooray for vision!

      • Yeah, apparently with the FSA, the entirety of my glasses cost can be taken out of that account. That’s a huge win because the last time I got a pair – a whopping 5 years ago now (so the coatings are worn and they’re scratched) – they cost about $1100. I’ve tried the cheap online ones and they just suck for my Rx. Going for quality is the only way to go, and I figure my face is the first thing people see, so it’s worth spending a few bucks to show it off to its best advantage. ;)

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