Healthcare
One of the first questions "What is up with all these confusing options?"
Congratulations, you're young. That means you probably don't have a lot of medical conditions that you have to worry about. Pieces haven't started falling off and Boy Scouts aren't offering to shepherd you across the street. But, now that you are adulting, you should consider things like:
- Annual physicals
- Dental care
- Being able to see
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SummaryOk, I explained this in excruciating detail. Problem with that: It's excruciating. So, here is a summary:
- Sign up for the PPO
- Find a doctor from friends or Google
- Sign up for the expensive dental
- Sign up for the expensive vision
- If you have a flexible spending account:
- Put a few hundred dollars in to cover glasses/co-pays for a tax advantage
If you need more than that, you're going to need to read the rest of this.
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MedicalThe U.S. medical system is a marvel among industrialized countries. No other country comes even close to us for the amount of money we spend and the outcomes we get from it. Sadly, it's because they all spend way less money and get way better outcomes, but hey, how am I ever going to get elected telling the truth?
It might be useful to explain how medical costs and billing work. Medical providers (e.g. doctors, hospitals) have a cost of doing business. In theory they would pass that cost on to the customers, with an added margin so that they can make money. In practice, what happens is that the end customers don't pay the bill directly, but instead insurance companies pay the bills. Now, insurance companies want to negotiate discounts, because they have a lot of customers. They'll say something like "Our discount should be 50%." Medical providers aren't stupid, they realize if they take their amount and double it, and then give you a 50% discount, they're right where they need to be. The net result is the perverse system where medical bills are incredibly high, but people rarely pay them because insurance negotiates them down.
Sadly, medical bills are the leading cause of bankruptcy in the US, so this is important stuff.
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General considerationsMedical generally falls into a few categories.
- tl;dr: In general, I think PPO is probably the best option in terms of cost and flexibility, so if you can't make up your mind, choose that.
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Preferred Provider Organization (PPO)- Good news: A PPO allows you to go to any doctor without a referral. This is awesome because it doesn't mean that you're bottlenecked on first seeing your Primary Care Physician (PCP), getting a referral, then going. Ironically, a PCP can't prescribe PCP. Irony, FTW.
- Bad news: It is more expensive. Co-pays (the amount you pay at each visit) are higher and your maximum out-of-pocket for a year also tend to be higher.
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Health Maintenance Organization (HMO)- Good news: Lower copays. Lower annual costs. Lower maximum out-of-pocket.
- Bad news: You have to choose a PCP (sadly, not the recreational drug, but instead a Primary Care Physician) and then go to that person first for all visits to specialists.
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Consumer Directed Health Plan (CDHP)Things I can not make up. A CDHP is a HDHP with an HSA. I hope that really clears it up for you.
- HDHP == High Deductible Health Plan.
- HSA == Health Savings Account.
But, let's step back and revisit governmental dysfunction. Healthcare costs continue to rise, because we haven't figured out how to just copy the systems that are proven to work. Now, that would be a good solution, so we won't do it, and instead what we'll do is create a different byzantine system to try to get people to spend less. Because, well... there is no good reason. That is what a CDHP is.
The idea is to (sort of) remove insurance costs from the equation, and instead allow you just to put money away that you can choose to spend on healthcare. In order to make this attractive, this money can be invested and won't be taxed.
So, if you are young and healthy, this is can be a great plan. It allows you another vehicle to mitigate taxes and you're unlikely to be sick.
- Good news: You have complete control over your budget. Money can be used tax free.
- Bad news: You might feel inclined to avoid preventative medical costs, which is more costly in the long run. As a matter of fact, this is exactly what happens. This will have the highest on-going costs and the highest maximum out-of-pocket. Generally it is still part of insurance, so you still get negotiated rates.
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Finding a DoctorThe same way you do anything else nowadays. Research on the internet and ask co-workers if they have someone they particularly like. At the end of all of this, choose the one with the best TikTok videos. I kid. Don't do that.
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AnecdoteI started out with a PPO when it was just my wife and myself. The flexibility was awesome. However, when the Powers family started to grow we looked at the expense of having our first child and an HMO saved us ~$3k in a single year, so we switched but, over time, our employer options have forced more towards PPO/CDHP.
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DentalAlmost everyone has teeth. Almost all dental plans will not cover you fully for any major problems and your options are limited. Choose one, BUT make sure you start getting dental cleanings every six months. Dental health is a keystone health issue. It is predictive and causal for increased problems things like heart disease, stroke and chewing solid food. (Also, you should learn the difference between causal and casual, because I enjoy playing with language to your potential detriment.)
Sometimes there are different plans with slightly different options. Normally it's about whether or not the plan covers braces (a.k.a. orthodonics). If you're not getting them, or you don't have kids getting them in the next year, probably go with the less expensive one.
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VisionMuch like dental, there aren't any great options and it's just about reducing your overall costs.
Sometimes there are different plans that cover things like LASIK. If you're going to get that done, then maybe consider that plan. If you're not, well then, maybe you'll figure out your other options