This is a cautionary tale for all you young folk who don’t understand health insurance. A lack of knowledge is going to cost me thousands of dollars because I didn’t take the time to properly understand all the healthcare options available to me. For those of you who have had to navigate this before, try not to laugh too hard at my expense. If you’re like me and had no idea what you’re getting into, TAKE NOTE.
I turned 26 late last year, meaning that this year I’m on my own health insurance for the first time. I wasn’t particularly worried about it; after all, I’m young and overall quite healthy. When I signed up for health insurance, I discovered that my company offered multiple health care options, as well as a $300 monthly credit towards a premium. Amazing, right? Of course, I chose the option that was closest to the credit without going over. (Incidentally, it was the third-cheapest option.) I didn’t really understand the difference between a deductible and a premium, only that I now had medical and dental coverage. Huzzah! I brushed it off as a job well done.
Big. Mistake.
Uh… What is a Deductible?
A deductible is a yearly dollar amount that you have to pay out of your own pocket before your health insurance will start contributing to payments. The average deductible in 2016 was $1,478. My current deductible is $2,250. This means that before my insurance will split costs with my 80/20, I have to fork out a lot of money. 🤦🏻♀️
At the risk of sounding like a complete moron, I recall having a vague notion that a high deductible might have been a good thing. I would regularly hear people debate high deductibles/low premiums vs low deductibles/high premiums without actually understanding the context. It was all too confusing. Health insurance isn’t a one-size-fits-all option, but I definitely wouldn’t have selected my option had I known more.
My Cautionary Health Insurance Tale
Last month, I finally decided to get some “real life errands” out of the way. I went to the dentist, the dermatologist, and an OB-GYN to get some standard check-ups. I also scheduled a consult with a specialist to get a long overdue (but minor) issue addressed. That consult resulted in a small medical procedure. This was all done in less than two weeks, so my health insurance processed the claims in a big bundle.
I logged into the online portal yesterday and nearly passed out when I saw my estimated bill, which was OVER $10K. The medical center where I did my procedure told me that they had just become in-network and that I would be fine. Of course, they were processed as out-of-network, because their in-network coverage started 14 days after my procedure. Lucky me. 🤦🏻♀️ <-This is the second use of this emoji in this post but it’s also how the whole situation has made me feel.
Thankfully, this $10K amount is before the insurance share of the payment, but I can’t rest easy until I see exactly how much I’m on the hook for.
Current Status: Fixing Past Mistakes
After a 30 minute call with customer service, it looks like there is a solution to this where I don’t have to deplete my entire savings and draw from my FIRE fund, but it’s going to require a lot of phone calls and paperwork. For now, I just get to wait for the bills to arrive so I can file all sorts of claims!
I’m incredibly lucky that I can afford to pay all these bills in cash (RIP my entire savings account), but I spent most of yesterday fuming at the injustice at all. As a high-income individual who is frustrated by these bills, I can’t imagine how low-income individuals navigate the healthcare system. My procedure was an incredibly common one, and it’s going to set me back between 1-4K at the end of the day. People who have chronic illnesses or expensive medication have so much more to deal with.
Know What You Have
Health insurance is no joke. The U.S. healthcare system has more than its fair share of flaws, but the fact that I have it (and don’t have to pay for a large part of it) is a luxury. For many, it’s the difference between life or death – just read this account of a journalist who nearly died from a rare flesh-eating disease.
If you’re young and generally healthy, it may make perfect sense to go with a similar insurance plan that I have. After all, preventative coverage (dental exams, PAP smears, etc.) are generally 100% covered. If you don’t need anything extra, it makes sense to keep your medical costs as low as possible. That said, it only takes one or two specialists or procedures to cut away at any potential savings from a cheaper plan.
How to Choose the Right Plan
Before you select a health care plan, read as much as you can on the different levels of coverage. Some things to consider:
- Insurance options for a spouse with a different employer
- Upcoming large medical procedures
- Plan deductibles (yearly out-of-pocket limit before insurance kicks in)
- Plan premiums (monthly costs to have health insurance)
- In-network doctors (especially if you’re changing insurance providers)
- HMO vs. PPO vs. EPO vs. POS
- Whether existing medications are covered
Learn from me and don’t put yourself in a situation with crazy medical bills. Take care of yourself, friends: health costs only increase from here.
Comments
Isn’t our healthcare system awesome? I used to have a HDHP with an HSA. $100/month with a $2,000 deductible. Went to the doctor for blood work. Told them it had to be sent through LabCorp. Office sent it to Quest, got an EOB for $4,500. Waited 6 months and no bill, my insurance company and Quest figured it out. But damn it scared the hell out of me.
Now my plan has a $0 deductible and $1,500 OOPM. Premiums are pretty expensive, about $600/month for my wife and I. And we’re both young so we don’t really need the doctor except for emergencies.
Figuring out how to handle healthcare after FIRE will be quite a challenge
Healthcare after FIRE is something that hadn’t really been on my mind until recently. Now I’m debating continuing working just to have health insurance. I’m easily still a decade away from FIRE, so I’ve got time to think about how to navigate it, but health insurance definitely just increased in priority after this saga.
When I turned 26 last month there was a definite sinking feeling moment of “oh shit, I’m totally on the hook for my own health insurance and can’t fall back on my mom’s if I need to.”
I’m so incredibly lucky in that my work will pay $100% of the premium for our HMO plan, plus our $1,500 deductible (oh hey, I’m gonna guess that expense is a huge part of why I don’t get paid very much at all). But just because I’ve hit my deductible (thanks, therapy!), that doesn’t mean things are free for the rest of the year, oh no. I’m still on the hook for any copays and my prescriptions, let alone anything weird that I haven’t had to deal with yet. And I planned very poorly and have already gone through what I set aside for my FSA so that’ll all be out of pocket. We have GOT to do things better in this country.
Fingers crossed you get the costs reduced down as far as possible and don’t have to deal with this again once all the bills come in!
Thanks, Erin!
I just found out Ian’s company fully covers his deductible and premiums, too, so I suppose I should join him on that plan…
A company that supports employees like that is really great 🙂 (But of course, even with that support, there are still a ton of costs. >.<)
This is so important to know! I feel like my healthcare options have significantly declined over the years. Before, I used to have cute like $20 co-pays every time I went to the doctor. Now, I’m getting $200 bills every time I have to go see the doctor. It’s definitely infuriating!
I also had an HSA last year (huge deductible), and it wasn’t fun to break my finger and have to pay over $1k out of pocket.
I too, remember the $20 co-pays, which is why I thought nothing of going to the doctor initially. I’m getting the first of the ‘big’ bills now, which are starting at $200. Oi vey.
Thankfully I have savings, but they’re not going to last me long at this rate.
This is definitely one of those “so deep I don’t even know where to start so I stick my head in the sand and cross my fingers” topics! I’m kind of glad we only have 2 plan options at work, so it’s just like eeny-meeny-miney-moe… I thank my lucky stars daily I’m young, healthy, no chronic illnesses or medications. All the appendages crossed SO HARD that it stay that way. Like, forever.
If only, if only! That’s what I figured when I chose my insurance plan, but clearly, that decision came back to haunt me. -___-
The US healthcare system is a very confusing place and as each day goes by, they seem to find a way to make it worse. One of the main reason, at least for me personally, that is keeping many people from retiring is because they aren’t sure if they can afford health care.
Yes, a truly terrifying thing! My father switched over from a private sector to a gov’t job a few years back, for the sake of the benefits. I didn’t get it at first, but he has a baller health care plan. Since my parents getting older, that’s so critical.