Benefit Plan Comparison



Note: HSA/HCRA contribution limits are $3,300 for employee only, and $6,550 for families. This is the total, which includes the $625/$1,250 company contribution received by plans B and C


Enter low/high expense estimates for each member on plan:


Written by John Henderson
jw [dot] hendy [at] gmail [dot] com
Table of values for best case (lowest predictions)
Table of values for worst case (highest predictions)

Introduction

For the past three years, I've been conducting insurance plan analyses as a hobby project at my place of work. Initially, plans were relatively simple. All you need to know is a plan's deductible, out of pocket maximum, cost of premiums, and the value of company-contributed HSA funds (if applicable), and you can compare plans.

For 2011 and 2012, I created a deck of slides and an accompanying screencast, which I made available on internal company blogs. In 2012, I was already thinking interactive visualization and made an attempt using the playwith package. Unfortunately, playwith plots are not available to others unless the run the actual R code. When I discovered shiny about a year ago, I knew this year's analysis would be an interactive one!

If you want to modify this to work with your insurance plans, or just take a look at the code and fiddle around, it's available on github.

Plan details and assumptions

The plans considered here are assumed to follow the typical “phases” of medical bills incurred vs. what you actually pay:

\[ f(x) = \begin{cases} Expenses & \text{if} \quad 0 < x < Ded \\ Ded + (0.10 \times (Expenses - Ded)) & \text{if} \quad Ded \le x < Expenses_{max} \\ OOP_{max} & \text{if} \quad Expenses_{max} \le x < \infty \end{cases} \]

In other words, you puy in full up to the deductible, 10% from there to the out of pocket maximum, and then nothing additional once you reach that point. The 10% figure is based on my company's plans; yours may vary.

Be aware that there are slight differences between the plans used in this visualization as well:

| Plan | Premium | Deductible | Type  | Family |
|------+---------+------------+-------+--------|
| A    | High    | Low        | Split | PPO    |
| B    | Medium  | Medium     | Total | HSA    |
| C    | Low     | High       | Split | HSA    |
+----------------------------------------------+  

Note the difference in type. Plans A and C feature what is called a “split” deductible and out of pocket maximum: an individual value and a total value. In each case, the individual value is half of the total value. Let's say a plan has a $5,000 deductible. If a single individual reaches $2,500 in expenses on his/her own, they are covered (only paying 10% of additional expenses). Once the remaining plan members make up the remaining deductible ($2,500), they begin receiving coverage. The same applies for the out of pocket maximum. One individual can not achieve the total deductible/out of pocket maximum for the entire family.

The second major difference is in the plan family. A is a PPO plan, while B and C are HSA plans. The most direct outcome of this, at least at my company, is that plans B and C receive company HSA contributions (free money). A secondary impact of this has to do with how elective contributions are treated. Elective, pre-tax dollars coming out of your paycheck for plan A go into an HCRA, while B and C have (obviously) an attached HSA.

  • HCRA: Contribution amount is not adjustable once enrolled, yearly contribution amount is available at the beginning of the plan year, and funds cannot be rolled over into future years.

  • HSA: Contribution amount can be adjusted at any time, funds become available as they are deducted from each pay periods paycheck, and the account is always yours, even if you leave the company.

So, if you elected to have $100/month directed into your health care amount, plan A would make all $1,200 available to you as soon as your coverage under that plan begins. In essence, the company is “fronting” you the money and paying themselves back in $100 increments from your monthly paychecks. For plans B and C, you would start your coverage with the company-provided HSA fund in your account, and an additional $100/month would funnel in with each paycheck.

There are often different coverage options for plans, as well. In my case, we are offered four flavors of coverage: employee only, employee + spouse, employee + children, and employee + family. The deductibles and out of pocket maximums have only two levels: employee only or employee + others. The premiums vary for each group, however. Here is the full list of plan values used here (anonymized from my company's actual values):

| plan | class      | ded_ind | ded_tot | oop_ind | oop_tot | prem |  hsa | exp_max_ind | exp_max_tot |
|------+------------+---------+---------+---------+---------+------+------+-------------+-------------|
| A    | emp        |         |     500 |         |    5000 | 1100 |    0 |             |       45500 |
| A    | emp_spouse |     500 |     900 |    5000 |   10000 | 2600 |    0 |       45500 |       91900 |
| A    | emp_child  |     500 |     900 |    5000 |   10000 | 2200 |    0 |       45500 |       91900 |
| A    | emp_fam    |     500 |     900 |    5000 |   10000 | 3600 |    0 |       45500 |       91900 |
|------+------------+---------+---------+---------+---------+------+------+-------------+-------------|
| B    | emp        |         |    1250 |         |    3000 |  900 |  600 |             |       18750 |
| B    | emp_spouse |         |    2500 |         |    6000 | 1700 | 1200 |             |       37500 |
| B    | emp_child  |         |    2500 |         |    6000 | 1600 | 1200 |             |       37500 |
| B    | emp_fam    |         |    2500 |         |    6000 | 2400 | 1200 |             |       37500 |
|------+------------+---------+---------+---------+---------+------+------+-------------+-------------|
| C    | emp        |         |    2500 |         |    5000 |  325 |  600 |             |       27500 |
| C    | emp_spouse |    2500 |    5000 |    5000 |   10000 |  625 | 1200 |       27500 |       55000 |
| C    | emp_child  |    2500 |    5000 |    5000 |   10000 |  550 | 1200 |       27500 |       55000 |
| C    | emp_fam    |    2500 |    5000 |    5000 |   10000 |  850 | 1200 |       27500 |       55000 |
+------+------------+---------+---------+---------+---------+------+------+-------------+-------------+

Confused yet? The “codey” names at the top are simplifications of the values we've discussed above.

  • ded_ind, ded_tot, oop_ind and oop_tot: the individual (if applicable) and total deductibles and out of pocket maximums for each plan.
  • prem: the annual premium paid for each plan.
  • hsa: the company HSA contribution for plans B and C.
  • exp_max_ind and exp_max_tot: while oop_ind and oop_tot is the maximum amount that you will ever pay, we need to calculate the amount of medical bills one would need to accrue in order to actually hit that value, which follows the formula: \(10(oop - ded) + ded\)

So, what am I looking at?

As you might see from the above, things get complicated quickly. Well, honestly, they're not that complicated, but my motivation for a visualization in general is that the human mind can't look at a table and calculate project costs for each of the plans. The split deductible feature really hammers that home since you need to know how much your highest cost individual might spend, how much the rest of the plan members might spend, and then figure out if the individual/total decutible or out of pocket maximums have been reached. Based on those criteria, you can finally apply the appropriate formula based on which “phase” of expenses you're in.

The plots in this app are my current best shot at making the financial impact to you on each of the plans interpretable. Let's start with UI:

The first tab shows the overall cost of each plan based on the predicted expenses input using the double sliders.