Taking Advantage of Open Enrollment

Disclaimer – nothing in this post is to be interpreted as medical advice, I am not a professional and the following statements are only my personal opinion. 

It’s that time of year again, October… when the autumn leaves are falling from the branches and your employer is reminding you that open enrollment is here. 

How do you usually handle this annual opportunity to change your health benefits?  Do you treat your open enrollment period as an annual check-up?  Or do you put it on autopilot and ignore it for another year? 

For me, it’s unfortunate to admit that the latter has been my reality more often than not. 

I’ve mentioned it before, but due to my medical history, health insurance is something that I usually don’t mess around with.  I tend to pay the most for the best PPO I can get in order to have no limitations on the doctors I want to see. 

However, diving into FI headfirst this year and reading all about the benefits of HSA accounts on numerous blogs, I decided I should conduct a good deep dive on my coverage to make sure I’m still making the right choices. 

You don’t know which course of action is the best, until you actually run the numbers. 

Two things have usually steered me away from looking into high-deductible HSA eligible health plans: 

1. I have terrible skin and need to see a dermatologist regularly (routine exams, tests and biopsies). 
2. I take daily prescriptions. 

As I’m scanning through my health plan options for open enrollment this year, I have four options: 

1. BCBS PPO (preferred provider organization) 
2. BCBS EPO (exclusive provider organization) 
3. BCBS CDHP (consumer driven health plan – HSA eligible) 
4. Kaiser Permanente HMO (health maintenance organization) 

I don’t have any kids and my wife has her own health insurance, so I’ll only be shopping for my individual coverage.  For the sake of time and length of this post, I’m not going to get into all the numbers and calculations I made and just provide the main summary of my conclusions. 

Right from the start I rule out Kaiser Permanente due to my immense bias against them.  I had KP insurance in the past and they were beyond terrible.  I know this is only my opinion and I also know plenty of people that love their coverage at KP.  Good for them.  I’m not going to get into the long stories, but the only way I will ever sign up for KP again is if it is my only option. 

That leaves me with the three Blue Cross Blue Shield choices: PPO, EPO and CDHP. 

As I mentioned above, I currently have the PPO which is the most expensive.  I have never had either the EPO or the low deductible CDHP plan that allows the HSA account. 

When looking into switching from my PPO to either the EPO or CDHP, I was actually surprised at the differences and how expensive my PPO option was.  However, when it comes to medical coverage, everyone’s situation is unique and there are many factors to consider. 

The following is my summary of how each of these plans would affect my personal situation if I switched: 

EPO Plan (exclusive provider organization): 

The EPO Plan is designed to save you money if you are going to use only in-network doctors/medical groups, or very rarely out-of-network medical care.  The plan is pretty much identical to the PPO (same co-pays, coverage, prescriptions, etc. – except you have a slightly higher deductible in-network but you pay everything out of pocket if you go out-of-network.) 

At first glance, I thought this could work for me.  The savings in my monthly premium would save me 56% – that would cut my payments by more than half!  And I get almost all the same benefits of my PPO?  I think I can live with that. 

However, when I started calling my doctors that I had assumed were in-network, this wasn’t entirely the case.  My physician would be in-network but when I called my Dermatologist, the office was considered out-of-network and would only take the PPO.  Since my skin is such a big issue, this was a very disappointing deal-killer for me. 

I might be old school in this, but when I find a doctor I really like, I will pay more insurance to stay with them.  I have found medical care to be just like any other profession, there are some great doctors and not so great doctors.  This reminds me of the old joke – what do you call the guy who came in last at his medical school?  Doctor. 

But if switching doctors is no big deal, or you rarely need medical care and most likely won’t go out-of-network, I think this is a great plan and way cheaper than the PPO option. 

My research also seemed to reveal that the EPO plan is a newer plan type, and specialty medicine offices like dermatology, don’t accept them as often.  Maybe this only happened to be the case with my doctors, but if someone is in the health insurance industry and knows more, please let me know in the comment section at the end of the post. 

CDHP Plan (consumer driven health plan): 

After reading all of the benefits an HSA account can provide, I was really hoping the CDHP Plan would be able to work for me. 

This plan would save me 73% in my monthly premium – holy shit!  And my employer will put in an additional $500 dollars to my HSA account!  What a deal! 

So what’s the catch? 

For most people, who don’t have significant health problems, this plan should be a no brainer.  Take the HSA benefits and start investing. 

For myself unfortunately, things were not so simple. 

Now we get back to the main two issues I stated in the beginning of the post: 

1. I have terrible skin and need to see a dermatologist regularly (routine exams, tests and biopsies). 
2. I take daily prescriptions. 

When I crunched the numbers on my dermatologist visits, I was excited to see that I could make the CDHP Plan work.  Even with paying the high deductible and full medical costs, my monthly savings would be large enough that I would still come out ahead. 

However, the other drawback from the CDHP plan, was that it didn’t cover prescriptions.  These costs would be applied to my deductible and after I would pay 20% of the total cost. 

I currently take two prescription medications daily.  Excitedly, I called the pharmacist to see what my out of pocket costs would be if I had to pay for these with cash.  For a 90-day supply: 

• Prescription 1: $377 (currently $10 copay w/ PPO insurance) 
• Prescription 2: $170 (currently $10 copay w/ PPO insurance) 

Times those by 4 for the entire year, I was looking at: $2,188.  Fuck, I would hit my deductible on my prescription payments alone.  Having always had insurance for prescriptions, I had no idea the cash cost was so fucking high!  Damn big pharma jacks people who don’t have insurance.  The whole insanity of these circumstances will have to be saved for a post on another day. 

Even with the CDHP monthly premium savings and the $500 contribution from my employer, to pay everything out of pocket and with the 20% I was on the hook for after the deductible, it penciled out to keep my PPO insurance rather than switch to the CDHP with the HSA. 

This was not the outcome I was hoping for. 

One last footnote on the CDHP Plan.  I live in the wonderful (I hope you feel my dripping sarcasm) state of California that is so progressive it believes in still taxing peoples HSA accounts.  So I can have all the clean energy in the world and the privilege of paying the highest taxes ever, but CA won’t give me a slight break on my medical savings account.  Fucking ridiculous again!  This was another factor that played into my decision and I believe the only two states as of now (2019) that still tax these accounts are California and New Jersey. 

Unfortunately, the health insurance industry still has a long way to go. 

In conclusion, I will be staying with my expensive, high-priced PPO for another year.  I didn’t choose the EPO discounted plan because I wanted to stay with my doctors and I didn’t choose the CDHP discounted plan because my prescription costs would not make it feasible. 

My goal is to track all of my medical expenses during 2020 and calculate at the end of next year what my incurred expenses would have been under all of these plans. 

So next October, I’ll be doing this same exercise again.  Hopefully, with new saving and knowledge to share. 

Now, how about you?  How is your open enrollment proceeding?  Please share with me any tips and suggestions you have found going through the process in the comment section below? 

Stay healthy. 

-Q-FI