I became the primary breadwinner for my family in February 2009. My husband and I had agreed that he’d quit his job as an International Sales Rep to go to graduate school at night and be a stay-at-home dad by day. I’d continue working at a Minneapolis-based non-profit. Three weeks after we made that transition I got notice at my full-time job that I’d be laid off. It wasn’t immediate, thank God for that, but a few months later I did lose my job and with it, my family’s health insurance.
In the months between receiving notice of the impending lay off and actually losing my job and its benefits my husband and I debated whether we could really launch an at-home business and whether I could really become a work-at-home mom. One question overshadowed much of the conversation. “How will we pay for health insurance?” I was petrified of buying our own. I really knew nothing about how to do it or what it would cost, but I was convinced that it would be thousands of dollars per month and potentially out of financial reach.
Because of my fear I actually buried my head in the sand for the first year after I was laid off. We opted for COBRA coverage through my previous employer and qualified for a federal subsidy to the premium. Eventually that COBRA coverage and federal subsidy came to an end and I had to figure out what to do next.
How to Compare Plans
I couldn’t procrastinate it any longer. I had to sit down at the computer and figure out what my health insurance options were as a self-employed, work-at-home mom. Like any Type A woman would do, I made an Excel worksheet to track all my options and crunch all the numbers related to each plan. Once I started loading information into my worksheet, my fear melted away. Knowledge really is power.
The most valuable numbers I looked at while comparing health insurance plans were the minimum and maximum out-of-pocket expense annually.
- Minimum out-of-pocket expense. I looked back at our medical history over the last few years and decided what I’d expect us to need in terms of the number of doctor’s office visits and prescriptions in a year’s time. In addition to paying our monthly premiums I assumed that we’d have these other basic medical expenses. For some plans we would pay co-pays for office visits. Other plans had co-pays for prescriptions. Some plans required us to pay 100% of the expenses out of pocket. I considered the total amount of premiums we’d pay annually and the cost of our essential medical expenses to be our minimum out-of-pocket expense.
- Maximum out-of-pocket expense. The maximum out-of-pocket expense is the plan’s annual deductible amount. In most cases there is an individual deductible that applies to each individual family member, plus an out-of-pocket maximum per family. I listed both of these numbers in my Excel worksheet.
With those two annual numbers clearly identified for each different policy we were considering, I could easily compare plans side-by-side. My husband and I decided on a plan that fit our monthly budget and was a comfortable amount of financial risk for us annually, should we ever have to max out the plan.
The first place I looked for plans was an online health insurance rate quote site. I normally don’t like those sorts of online quote sites, but I found them to be surprisingly useful in getting me started. I reviewed every plan suggested by the websites I visited, then took my research a step further.
I jotted down the names of the insurance companies that offer plans in my state (there were only 3 or 4). I went to each of those companies websites directly to look for any other insurance plans for individuals. I discovered a few plans that seemed like good fits for my family, but had not been mentioned in the quote sites I’d visited.
Before making a final decision, I called the customer service line for the two companies whose plans we were seriously considering. I inquired about dental insurance (which is difficult to buy apart from a health insurance policy) and confirmed my understanding of how each plan worked.
We ultimately decided on a hybrid plan – a high deductible, but no health savings account because it offers standard co-pays for office visits, prescriptions, two urgent care and one emergency room visit annually. Beyond those things, we are responsible to pay 100% of everything else up to our deductible. My biggest surprise – our premium, as a self-employed family, is only slightly more than what we were paying in subsidized COBRA premiums.
How have you navigated the waters of finding and securing health and dental insurance for your family? What advice and what questions do you have?