Lowest Premium Not Necessarily the Lowest Health Care Cost

So you have spent days pouring over alternative health insurance plans.  You’ve created charts, Excel sheet comparisons to try and compare the virtually incomparable.  After applying all your statistical knowledge you finally identified the plan with the lowest premiums that comes closest to providing the benefits you want.  So you pat yourself on the back and buy that plan thinking you now have the most coverage for the least amount of cost.  Well if annual premiums were the only cost, you might be right.  However, Marc Boutin, chief operating officer of the National Health Council, focusing on out-of-pocket costs associated with health care plans indicates that out-of-pocket expenses may vary as much as 600% between various plans.  Depending on deductibles, your ailments and medication, such variances may result in a lower premium plan actually costing more than a higher cost premium plan. A fact many people fail to factor into their cost analyses on a detail level.

Mr.Boutin has recommended that consumers use the National Health Council’s new online tool puttingpatientsfirst.net.   Using this tool, consumers input detailed information about the medical services they expect to use including their use of medications. This allows consumers to estimate their total costs under various health plans.  This allows more precise estimates of the cost of using different plans, as opposed to only comparing premiums and deductibles without any personalization of expected use.

Mr. Boutin, analyzed what out-of-pocket expense the same person would incur under a variety of different plans within different states. The result of his analysis showed a wide variation in such cost ranging from $4,600 to $10,000.  He concluded that sometimes the plans with more expensive premiums may have a lower overall cost than plans with lower premiums.

The above is abstracted from an article by Elizabeth Hayes, staff reporter at the Portland Business Journal, published on January 29, 2014. If you would like to view the entire article please go to: Business Journal – Elizabeth Hayes.

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