My analysis suggests that no matter how I look at this, the high deductible plan comes out ahead. But I have heard that high deductible plans are generally only advantageous if you are healthy and relatively less likely to need medical attention during any given year. However, my analysis below seems to indicate that even under the maximum expense scenario the high deductible plan would be cheaper by nearly $4000 relative to the next best plan.
What am I missing?
- High deductible plan Deductible: $3000 / Out-of-pocket max.: $6000 / Premium (per pay period) $75
- Note: HSA is available and Megacorp will contribute $1000/year to HSA
- PPO_1 Deductible: $1800 / Out-of-pocket max.:$7500 / Premium (per pay period): $96
- PPO_2 Deductible: $600 / Out-of-pocket max.:$6000 / Premium (per pay period): $125
- PPO_3 Deductible: $0 / Out-of-pocket max.:$4500 / Premium (per pay period): $208
Based on the above, I arrive at the following scenario outcomes (calculations based on estimated tax benefits, premiums per pay period, deductibles, and out of pocket maximums):
- High deductible plan Minimum expense: -$1488 (i.e., effectively we get paid instead of having to pay) / Expense to get first benefit $: $1512 / Maximum expense: $4512
- PPO_1 Minimum expense: $1748 / Expense to get first benefit $: $3548/ Maximum expense: $9248
- PPO_2 Minimum expense: $2278 / Expense to get first benefit $: $2878/ Maximum expense: $8278
- PPO_2 Minimum expense: $3789 / Expense to get first benefit $: $3789/ Maximum expense: $8288
Any thoughts you are able to share would be much appreciated.