Relocating and expecting a baby - Opportunity to change health plans. Should we?

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My wife and I are relocating this year in June/July, and also expecting a baby at the end of the year (December 15). Because of our relocation, my wife's work counts it as a qualifying event and she will have the opportunity to change her health plan mid-year. I'm trying to do the math, and can't figure out if it makes sense to do so or not. She is currently on a HDHP, and has the ability to convert to a standard plan.

One key detail which I'm missing is how much does a delivery cost, and what % of those charges are billed to the baby vs. the mother?

Plan Details are:
HDHP - Preventative care is covered 100%
Self Only - $350/yr premiums, $500 HSA contribution (net -$150 cost), $1300/yr deductible, 80/20% coverage after deductible, $3000 OOP Max
Self+Child - $975/yr premiums, $1000 HSA contribution (net $-25 cost), $2600/yr deductible, 80/20% coverage after deductible, $4500 OOP Max

Traditional -
Self Only - $1550/yr premiums, No Deductible, $40 copay/$500 hospitalization cost, $3000 Max OOP
Self+Child - $3800/yr premiums, No Deductible, $40 copay/$500 hospitalization cost, $6000 Max OOP

I am covered under a separate HDHP which I could also add the baby to. My plan is a $1500 deductible, with 95/5% Co-insurance. I will likely also have paid the deductible by the time the baby is born, but my deductible will go up to a $3000 when adding a +1, so all baby expenses would presumably be charged towards the deductible. My Co-Insurance is lower, but OOP Max is much higher - $5k/self and $10k/self+1.

Before we move, she will likely meet her deductible ($1300) already due to doctor visits, etc. My understanding is since the baby will be born this year, as soon as we add the baby to the health plan on December 15, her deductible goes up to $2600, and as a result, all costs associated with the delivery will be charged towards that new higher deductible. So we'd be looking at the delivery costing a minimum of  the additional $1300, then the co-insurance will kick in until reaching the OOP Max of $4500.

If she switches, she would pay ~$750 in premiums for half of the year, then $500 for the delivery only, but then be subjected to the health plan for all of 2018. So the following year would cost a minimum of $3800 premiums+$40/visit in premiums, regardless of number of uses of the health plan. The HDHP would cost $-25 + OOP expenses up to $2600 until the co-insurance kicks in.

From initial thoughts, it looks like it would make sense to stick with the HDHP, but I'm not sure if I'm reading the numbers correctly.


 

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I should mention - I'm trying to do the above analysis on whether we should change plans only when we move. I haven't started digging into the analysis/math on whether she should switch from a HDHP to a traditional plan when the baby comes (separate qualifying event), or if I should add the baby to my plan (I can switch to a traditional plan where the baby's expenses are charged to my traditional plan).

Are you sure you get the full employer HSA contribution for the plan if you switch mid year? They might prorate that in some way.
Are the deductibles for the HDHP just a joint deductible entirely or are there individual deductibles?

Total costs with a delivery can hit $10k pretty typically and might get much higher.

I'd be inclined to stay with the HDHP. This year you might hit 4500 OOP max. But you can also contribute yorueslf to the HSA making a lot of that tax advantaged. And then getting locked into the more expensive traditional plan next year will cost you more then too.

How much does it cost for the pregnancy delivery according to your plan's average in the new location? Whats your HDHP's annual out of pocket limit include or exclude? Dont underestimate either of those. There's usually some form of coinsurance with that that may be on top of your deductible. You may end up paying more than OOP in some plans. I dont think the deductible goes up as soon as the baby is born; only when (s)he's added to the plan is when the clock starts. You dont get any new deductions or benefits of HSA by staying in HDHP since you're both already having those.

Also, I believe a newborn is covered under the mother's insurance for the first 30 days after birth by law. All procedures on the baby are covered (both were true in our case). Thats something you should definitely check on with the insurer/plan provider.

How much is it to switch to a self+family plan now?

I agree, stick with the HDHP/HSA. There's basically no case where the HDHP/HSA plan would end up costing more than the traditional and in most cases would end up costing significantly less.

ETA: swapped the two plans by accident

vnuts21 said:    but then be subjected to the health plan for all of 2018.


 

  
Why can't she switch back during open enrollment?

Stick with the HDHP and max out your HSA. Then never touch your HSA until you retire.

If she happens to have the baby 15 days early, and you switch plans by December 1st, then you are allowed to contribute the full 6550 to your HSA for 2017 (satisfies the last month rule), or ask her employer if they back date changes to the first of the month in which the change occurs, some do this also. If not you are at least setup to contribute the family max in 2018.

jerosen said:   Are you sure you get the full employer HSA contribution for the plan if you switch mid year? They might prorate that in some way.
Need to check on that. The Employer HSA contribution is made at the beginning of the year, she already received her $500 for the self enrollment for 2016 - not sure if they will add the $500 once she switches to Self+Child, or if they will prorate it for the assumed ~15 days (effectively $0). I also don't know what they would do with the $500 she already got for 2016 if she switches away from the HDHP mid-year. Need to check on that as well. 

Are the deductibles for the HDHP just a joint deductible entirely or are there individual deductibles?
99% sure it is a Joint deductible. 

Total costs with a delivery can hit $10k pretty typically and might get much higher.
Do you know/have a feel for the percentage that is billed to the mother vs. the child? 

I'd be inclined to stay with the HDHP. This year you might hit 4500 OOP max. But you can also contribute yorueslf to the HSA making a lot of that tax advantaged. And then getting locked into the more expensive traditional plan next year will cost you more then too.
Agreed - that's kind of the advantage that I see with the HDHP. We max out both HSAs, and don't withdraw for it and just pay OOP. Planning on letting the HSAs accrue (and keep digital copies of receipts) until retirement for tax free growth. 

 

  
Posted some answers above - thanks!

TheWalL said:   How much does it cost for the pregnancy delivery according to your plan's average in the new location? Whats your HDHP's annual out of pocket limit include or exclude? Dont underestimate either of those. There's usually some form of coinsurance with that that may be on top of your deductible. You may end up paying more than OOP in some plans. I dont think the deductible goes up as soon as the baby is born; only when (s)he's added to the plan is when the clock starts. You dont get any new deductions or benefits of HSA by staying in HDHP since you're both already having those.

Also, I believe a newborn is covered under the mother's insurance for the first 30 days after birth by law. All procedures on the baby are covered (both were true in our case). Thats something you should definitely check on with the insurer/plan provider.

  According to WellMatch, the average cost of an uncomplicated vaginal delivery is $3000. I'm guessing there's plenty of other costs that aren't figured into that - but I imagine whatever the cost, it will put us over the OOP Max. As far as I can tell, there isn't anything that's not included in the OOP Max, except for out of network care, which has a slightly larger OOP Max. 

When I spoke with the insurance earlier today, she told me that the new deductible kicks in when the baby is added to the plan, but it is backdated to the birth date. However, I need to double check that because I'm not sure of the logistics. I would also like to benefit from both the higher employer contribution ($1000 vs $500), as well as the higher HSA allowance for the year (6750 vs 3400). I'm not sure how to do that since there would only be 1 more paycheck left in 2017 when the baby is born. 

 

elektronic said:   How much is it to switch to a self+family plan now?
  Self+family doesn't make a lot of sense for either of us. Her employer has a significant penalty for covering a spouse when the spouse is covered for health insurance elsewhere (which I am). Plus, the premiums for self+family are more than 6x the self only, and more than 3x the self+child. 

I don't see the benefit of switching to self+family when there is no child yet - it would be asking for a higher deductible and premiums earlier on in the year. 

doveroftke said:   
vnuts21 said:    but then be subjected to the health plan for all of 2018.


 

  
Why can't she switch back during open enrollment?

  Are you saying to do this:
- Switch to traditional plan self only when we move
- Switch to traditional plan self+child when the baby is born
- Switch to HDHP for self+child during open enrollment, which takes into effect on 1/1/18?

I hadn't thought of that. We would pay higher premiums for the rest of the year ($750), $40 for each OB visit (~8 visits, $360 copays), $500 for the hospitalization of the child, but that's about it - adding up to $1600. This would assume that each OB visit is only the copay, and there is no additional cost of ultrasounds, bloodworm, non-routine care. 

If we stay with the HDHP, since her deductible is pretty much met by the time we move, it would be a max of additional $1700 (routine doctor visits are covered at 100% but blood work, ultrasounds, etc are not). Then when the baby is born, it would cost an additional $1500, totaling $3200. 

 

 
daw4888 said:   Stick with the HDHP and max out your HSA. Then never touch your HSA until you retire.

If she happens to have the baby 15 days early, and you switch plans by December 1st, then you are allowed to contribute the full 6550 to your HSA for 2017 (satisfies the last month rule), or ask her employer if they back date changes to the first of the month in which the change occurs, some do this also. If not you are at least setup to contribute the family max in 2018.

  Are you saying in order to be able to contribute the max family HSA limit, the plan would have to change before December 1?

vnuts21 said:   

Total costs with a delivery can hit $10k pretty typically and might get much higher.
Do you know/have a feel for the percentage that is billed to the mother vs. the child? 



 

  

Most of the charges are on the mother.    At least in my experience with our hospitals.

http://oregon.providence.org/about-us/financial-services/common-...
roughly $4-24k for the mom and $1500 to 6k for the baby

I'm sure it varies based on specific hospital and city/region.   You might research the hospitals in your area to see if there is anything published.
 

jerosen said:   
vnuts21 said:   

Total costs with a delivery can hit $10k pretty typically and might get much higher.
Do you know/have a feel for the percentage that is billed to the mother vs. the child? 

 


  

Most of the charges are on the mother.    At least in my experience with our hospitals.

http://oregon.providence.org/about-us/financial-services/common-... 
roughly $4-24k for the mom and $1500 to 6k for the baby

I'm sure it varies based on specific hospital and city/region.   You might research the hospitals in your area to see if there is anything published.

  Seems like either way, it will be billed enough to cover the higher new deductible. 
 

TheWalL said:   How much does it cost for the pregnancy delivery according to your plan's average in the new location? Whats your HDHP's annual out of pocket limit include or exclude? Dont underestimate either of those. There's usually some form of coinsurance with that that may be on top of your deductible. You may end up paying more than OOP in some plans. I dont think the deductible goes up as soon as the baby is born; only when (s)he's added to the plan is when the clock starts. You dont get any new deductions or benefits of HSA by staying in HDHP since you're both already having those.

Also, I believe a newborn is covered under the mother's insurance for the first 30 days after birth by law. All procedures on the baby are covered (both were true in our case). Thats something you should definitely check on with the insurer/plan provider.


This was definitely not the case for us. They filled up mom's max oop and then found baby's and filled that up, too. $10k oop.

vnuts21 said:   
doveroftke said:   
vnuts21 said:    but then be subjected to the health plan for all of 2018.


 

  
Why can't she switch back during open enrollment?

  Are you saying to do this:
- Switch to traditional plan self only when we move
- Switch to traditional plan self+child when the baby is born
- Switch to HDHP for self+child during open enrollment, which takes into effect on 1/1/18?
 

  
I'm not saying you should, but you could if you wanted to.

Having already gotten the company HSA contributions and being able to switch for such a brief period which covers the birth might make it worthwhile. If I were you, I'd run the detailed numbers for switching vs. not and then make a decision. But for next year, the HDHP/HSA definitely makes the most sense IMHO.

TheWalL said:   You may end up paying more than OOP in some plans.
 


If everything is in-network, it shouldn't be possible to pay more than the max OOP, that's the whole point of the max OOP.

vnuts21 said:    According to WellMatch, the average cost of an uncomplicated vaginal delivery is $3000. I'm guessing there's plenty of other costs that aren't figured into that - but I imagine whatever the cost, it will put us over the OOP Max.
 

  
For the self+child plan, it would take $12,100 of expenses (negotiated rate) to hit the max OOP.

vnuts21 said:   
daw4888 said:   Stick with the HDHP and max out your HSA. Then never touch your HSA until you retire.

If she happens to have the baby 15 days early, and you switch plans by December 1st, then you are allowed to contribute the full 6550 to your HSA for 2017 (satisfies the last month rule), or ask her employer if they back date changes to the first of the month in which the change occurs, some do this also. If not you are at least setup to contribute the family max in 2018.

  Are you saying in order to be able to contribute the max family HSA limit, the plan would have to change before December 1?

  Yes. You need to be enrolled in a plan by December 1 to be able to contribute the family Max for 2016.

doveroftke said:   
vnuts21 said:   
doveroftke said:   
vnuts21 said:    but then be subjected to the health plan for all of 2018.


 

  
Why can't she switch back during open enrollment?

  Are you saying to do this:
- Switch to traditional plan self only when we move
- Switch to traditional plan self+child when the baby is born
- Switch to HDHP for self+child during open enrollment, which takes into effect on 1/1/18?

  
I'm not saying you should, but you could if you wanted to.

Having already gotten the company HSA contributions and being able to switch for such a brief period which covers the birth might make it worthwhile. If I were you, I'd run the detailed numbers for switching vs. not and then make a decision. But for next year, the HDHP/HSA definitely makes the most sense IMHO.

  
I re-read this thread and realized I had been confused about the timing. You were right originally, if your life event happens after open enrollment, you're stuck with that plan for the next year. Mea culpa. The HSA seems promising IMHO.
 

doveroftke said:   
doveroftke said:   
vnuts21 said:   
doveroftke said:   
vnuts21 said:    but then be subjected to the health plan for all of 2018.


 

  
Why can't she switch back during open enrollment?

  Are you saying to do this:
- Switch to traditional plan self only when we move
- Switch to traditional plan self+child when the baby is born
- Switch to HDHP for self+child during open enrollment, which takes into effect on 1/1/18?

  
I'm not saying you should, but you could if you wanted to.

Having already gotten the company HSA contributions and being able to switch for such a brief period which covers the birth might make it worthwhile. If I were you, I'd run the detailed numbers for switching vs. not and then make a decision. But for next year, the HDHP/HSA definitely makes the most sense IMHO.

  
I re-read this thread and realized I had been confused about the timing. You were right originally, if your life event happens after open enrollment, you're stuck with that plan for the next year. Mea culpa. The HSA seems promising IMHO.
 

  Oh, true - I didn't think of that. I believe open enrollment is in November, so if we elect Traditional in July when we move, then HDHP at open enrollment, then Tradtional+Child after the birth, then the Traditional+Child would counteract the open enrollment selection.



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