Taking The Better Plan

With the deals that Amy's family might get on her husband's health insurance plans, Dave thinks she should jump at them.

QUESTION: Amy’s family is moving down on their health insurance plan to move up in deductible and down on premium. Her husband’s current deductible is $1,000 and they are considering moving it to one of a couple of plans. They make $70,000 a year. It scares her to think of reducing their insurance, but Dave explains why they need to do this plan.

ANSWER: Remember, $400 a month in premium savings is pretty substantial. You don’t even have to go 3 months before getting that money back on the first plan; that’s a no-brainer. With the second plan, you’re taking the risk of a $1,000 deductible and you’re taking the risk of an extra 10% on the 70/30 plan until we get to $16,000, which is your out of pocket maximum. Your current deductible is $14,000, so you’re taking $2,000 more risk out of pocket while saving $400 a month. It only takes you 5 months before you get into the gravy on this. I’m doing this thing.

If 3 people are in a car wreck, the family deductible would max out before the $2,000 per person maxed out. You’ve got a maximum exposure of $5,000 as a deductible and $16,000 out of pocket on the 70/30. If you keep a $15,000 emergency fund, you’ll be fine. You’ll never get into this. I’d buy this good health insurance and save the money by running the higher deductibles. Get generic prescriptions and samples from your doctor where you can.