6 ms·

If I'm evaluating job offers that have identical salary/bonus and one company offers a copay plan and another has a high deductible plan of $2000, I'm absolutel

If I'm evaluating job offers that have identical salary/bonus and one company offers a copay plan and another has a high deductible plan of $2000, I'm absolutely treating the copay plan as $2000 more valuable. In fact, I'd probably gross it up given that's $2000 in after-tax dollars I would pay for healthcare each year. And that doesn't even count the 10%+ coinsurance on the backend once the deductible is met.

throwawayfire 6y ago
That's your choice, but it might be useful for you to know: I checked some private healthcare insurance where I live, and the difference in cost between these plans was in fact only $800.
- atlgator 6y ago
  For you. Premiums and deductible options on the open market are different between individuals. A 20 year old is going to pay a good deal less than a 50 year old. And it's not "my choice." That's mathematically how you evaluate different alternatives. All other things being equal, would you not value a house with a pool higher than one that doesn't?
  - throwawayfire 6y ago
    As such, we should also admit that this benefit is potentially worth $0 to a healthy person. I didn't do that calculation on a "for me" basis: I looked at the generally advertised cost. Paying in advance is cheaper for anyone taking out a policy.
    - sokoloff 6y ago
      For a person covered on a spouse’s better insurance, it’s possibly worth $0. If you’re going to be covered for catastrophic incidents, that’s economically worth more than $0 no matter how healthy you are.
kasey_junk 6y ago
The high deductible plan likely comes with an HSA which is perhaps the most tax advantaged way to store funds. That may not be as valuable to you as $2000 deductible coverage but the equation isn’t as stark as that dollar amount. Anecdotally, every time I run the numbers for my family the high deductible plan comes out ahead so I view an offer without one as less appealing. Though most employers offer both.
- sokoloff 6y ago
  It doesn’t have to “come with” an HSA. If you have an HDHC plan, you can use a third-party HSA. (An employer plan may come with an employer contribution, of course.) It is the best type of retirement account when used that way and I think it’s worth at least $1K/yr today assuming you’ll be able to drain it before it turns into an IRA.
  - kasey_junk 6y ago
    Unfortunately low fees haven’t come to the third party HSA world (yet) so the employer provided account has intrinsic value. That said even without it I’d bet my equations stay the same.
    - sokoloff 6y ago
      Fidelity has a good HSA plan for individuals. $0 for almost everything (some investments have commissions). (No connection other than as a client.)
- danaris 6y ago
  I've never yet seen an HSA that's actually advantageous unless you're able to tightly plan out your medical costs for the next year. They're always "decide how much goes in for 2021 in October 2020, then use it or lose it". Sure, the tax advantage is nice, but it doesn't make up for expecting to be paying $2000 in visits over the course of a year, then (for whatever unexpected reason) paying half that—the extra $1000 just goes away, and with it the tax savings you would have made over years of effective use.

throwawayfire 6y ago

That's your choice, but it might be useful for you to know: I checked some private healthcare insurance where I live, and the difference in cost between these plans was in fact only $800.

atlgator 6y ago
For you. Premiums and deductible options on the open market are different between individuals. A 20 year old is going to pay a good deal less than a 50 year old. And it's not "my choice." That's mathematically how you evaluate different alternatives. All other things being equal, would you not value a house with a pool higher than one that doesn't?
- throwawayfire 6y ago
  As such, we should also admit that this benefit is potentially worth $0 to a healthy person. I didn't do that calculation on a "for me" basis: I looked at the generally advertised cost. Paying in advance is cheaper for anyone taking out a policy.
  - sokoloff 6y ago
    For a person covered on a spouse’s better insurance, it’s possibly worth $0. If you’re going to be covered for catastrophic incidents, that’s economically worth more than $0 no matter how healthy you are.

kasey_junk 6y ago

The high deductible plan likely comes with an HSA which is perhaps the most tax advantaged way to store funds. That may not be as valuable to you as $2000 deductible coverage but the equation isn’t as stark as that dollar amount. Anecdotally, every time I run the numbers for my family the high deductible plan comes out ahead so I view an offer without one as less appealing. Though most employers offer both.

sokoloff 6y ago
It doesn’t have to “come with” an HSA. If you have an HDHC plan, you can use a third-party HSA. (An employer plan may come with an employer contribution, of course.) It is the best type of retirement account when used that way and I think it’s worth at least $1K/yr today assuming you’ll be able to drain it before it turns into an IRA.
- kasey_junk 6y ago
  Unfortunately low fees haven’t come to the third party HSA world (yet) so the employer provided account has intrinsic value. That said even without it I’d bet my equations stay the same.
  - sokoloff 6y ago
    Fidelity has a good HSA plan for individuals. $0 for almost everything (some investments have commissions). (No connection other than as a client.)
danaris 6y ago
I've never yet seen an HSA that's actually advantageous unless you're able to tightly plan out your medical costs for the next year. They're always "decide how much goes in for 2021 in October 2020, then use it or lose it". Sure, the tax advantage is nice, but it doesn't make up for expecting to be paying $2000 in visits over the course of a year, then (for whatever unexpected reason) paying half that—the extra $1000 just goes away, and with it the tax savings you would have made over years of effective use.