How to Choose Your Healthcare: HMO, PPO, WTF, IDK

I’ve delved deep into the world of health insurance quite a few times, even more so after having some major ankle surgeries. I’ve delved, my friends, I’ve delved. It was a painful and frustrating learning process and insurance is CONFUSING. First, let's talk about acronyms. These are a sampling of healthcare options out there that you may be waffling between. Let me pass on the translations I've learned so far:

Health maintenance organization (HMO):

In this insurance setup, you’ll have your primary care doctor as your go-to. Everything else (think specialists, hospitals) is set up through that doctor. It’s a very common plan and generally lower cost than its close cousin, the preferred provider plan (PPO), which doesn’t have a set home base/primary care doctor.

HMOs might be great for you if:

• You’re predictable! You’re consistent!

• Your cup of doctor tea is just a regular old checkup. No fuss.

• You’re thinking about having a baby sometime soon (they’re expensive and you want all the insurance coverage you can get).

Preferred provider plan (PPO):

On a PPO plan, you’ll have a whole gang of health care providers and you can go to any of them without a referral. Think of HMO as one BFF and PPO as a giant friend circle.

PPOs might be great for you if:

• You visit specialists.

• Your medical regime isn’t always super predictable and you want flexibility without the fuss.

• You’re prone to emergency health issues.

• You’re thinking about having a baby sometime soon (just to reiterate: they’re expensive and you want all the insurance coverage you can get).

High deductible health plan (HDHP):

This plan is refreshingly clearly named. With an HDHP, insurance kicks in only after you’ve paid your full deductible (usually somewhere in the $1200 range for singles and $2500 for families). Frequently, you’ll see these plans paired with a health savings account (HSA) that allows you to contribute funds tax-free for any medical expense (such as meeting the aforementioned high deductible).

HDHP might be great for you if:

• You’re young!

• You’re in good health!

• You don’t have any recurring medications!

• You’d rather take a little risk with a high deductible if it means lower costs and possibly saving money (that is, if you have an HSA too).

When it comes right down to it, choosing a health plan is not clear cut or intuitive. Do the math. That’s right. Crunch the numbers for each health plan and your anticipated expenses in the next year to help make your decision. You’ll feel really grown up and you officially get five gold stars for being an adult.

Five tips on using your health insurance.

1. Call the customer service line. Call often, call quickly, and don’t hesitate. Insurance is really confusing to twenty-somethings (and thirty-somethings, and forty-somethings, and probably everyone)—and no shame, there wasn’t a formal training you missed. Getting on the phone with a service representative will really help make sense of your plan and anticipated costs. I once called my insurance company and the guy on the other line was so helpful he walked me through how to bill my insurance for a recurring appointment so it was $25 instead of $150 per visit. That saved me a LOT of money. It’s worth giving them a ring.

2. If you’re on a PPO, know your copays, deductibles, and out-of-pocket maxes. It should be on your insurance portal or the thick packet you’re given when you start a job. If you don’t know, call them! Figure out what counts toward your deductible and when you’re going to hit it. I hit my out of pocket max mid-way through the year after an ankle surgery and was able to get the second ankle surgery (billed to insurance at a whopping $28K) virtually free because I had already hit my max (and I don’t wish two ankle surgeries on anyone). Know when you hit your limits and plan your surgeries accordingly!

3. For recurring prescriptions, try using mail-order pharmacies. They’ll often offer a discount for recurring prescriptions (like birth control).

4. For you HSA folks out there, it’s good to remember that you get to keep your money, even if you switch jobs. The money you put into an HSA is tax free, and some folks even suggest treating it a little bit like a retirement savings vehicle. Put money into it consistently while you’re young and you’ll be able to use that money when you get old and inevitably have some health needs.

5. Look into temporary health insurance if you’re going to have a gap between jobs or life events. Plans start at as low as $28 a month and this gives you peace of mind in between insurance coverage. Even if it’s only a month, look into temporary coverage because unexpected health crises can easily suck up all of your savings.

Moneybags Magoo: Parents Visiting and Salary Questions

Dear Moneybags Magoo,

My parents are coming to visit, and I’m finally at the age where I actually bring in a paycheck. They’ve always paid for me, but now that I’m making money, should I pay when we go out? How do I handle that transition?

Yours truly,

Flying-outta-the-nest-with-dolla-dolla-billz-y’all

Dear Flying-outta-the-nest-with-dolla-dolla-billz-y’all,

What a considerate question-asker you are! Never expect them to, but always be thankful if they do. If you have the means, buy for them every once in a while. If a dinner tab is too hefty, try taking the family out to ice cream or have them over for dinner at your place.

Dear Moneybags Magoo,

 What money topics are off-limits or rude to talk about with friends or family? What if I need money advice?

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Thank you!

Warmest Regards,

Not Emily Post

Dear Not Emily Post,

Well, you sure know how to ask tricky questions! It really does depend on your relationship with a person. For things like rent and house prices, it’s a little easier to talk about, because that information is generally public (hello Zillow!). However, it can often come across as rude and invasive to ask questions about salary, car cost, any inheritance questions, and how much a person makes. For the most culturally acceptable manners, in general don’t ask money questions of someone unless the other person brings it up (Moneybags Magoo excluded, of course: learning purposes, you know?).

However, if you are just finding your way into personal finance, do find someone you trust deeply and someone who is good with money to aid you in your decisions (I talk to my wise old tortoise father. He always knows and it is so helpful to get his perspective). Don’t necessarily ask pointed questions about their money, but inform them as much as you feel comfortable to get their wise sage advice.

Dear Moneybags Magoo,

What should I say when a friend asks me how much I make? What about when a recruiter asks me in a job interview?

Sincerely,

Cat has eaten my tongue

Dear Cat has eaten my tongue,

If it is a potential employer, avoid giving a number. List the industry average or a range (this benefits you in the salary discussion if they give a number first). If it is a friend asking, be vague or come up with a roundabout answer. A few options if they ask how much you make:

For the snarky:

“Not as much as I wish!”

“Not enough to quit my job and ride on a yacht for the rest of my life.”

“10,000 golden dubloons. The exchange rate is top secret. Sorry.”

For the sincere:

“I’m very thankful for what I make.”

“My salary is decent enough.”

For the direct:

“I’m not comfortable sharing that.”

For the passive:

“How about this weather we’re having?!”

Good luck. Always an awkward turtle, that one.

Send me your money questions! I'm ready for the asking.

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Thank you!

As always, thanks to team savvy for your splendid answers to my invasive money question asking (haha, following my own advice, I see).

What To Do If You're Unemployed

It was a little over a year and a half ago when I lost my job. It was a mass layoff in our smallish office, and my whole team was cut. There was definitely a hug line on the way out, and some of the recently unemployed were stuffing their pockets with snickers bars to use the rest of their monthly snack balance before handing in their cards. It felt like a scene out of a movie, and I was the unfortunate soul bussing home at ten in the morning, my purse stuffed with a pencil cup and a file organizer.

That bus ride started a six-month period of unemployment that I wouldn’t wish on anyone but I wouldn’t take back either. Here are a few tips I’ve collected should you ever find yourself in a similar situation.

What to do if you lose your job:

File for unemployment. 

• You can get unemployment benefits if you were laid off, but not if you were fired or quit. If you meet this criteria, you can enjoy more confidence in yourself and also some extra money to help keep you afloat.

• The actual numbers: expect a bit less than half of your monthly take home pay. In Washington on a salary of $40K, you would see roughly $1400/month in unemployment. This continues for six to eight months (depends on the state) and stops once you get a job.

• To actually file, just Google it. You’ll find a semi-clunky government website with instructions. For Washington, it looked like this:

  • I had to fill out an online 10-question survey each week to get my straight-into-my-bank-account deposit. The most noteworthy qualifications: did I look for work that week, and did I apply to at least three jobs. The website encourages you to keep a log of the actual jobs you apply for, but no one ever asked to see mine (and should they, I still have it—all 52 pages).

  • If you can opt to have taxes withheld, do it (usually around 10%). This makes it a bit easier rather than paying taxes in a lump sum later.

Figure out your insurance ASAP.

You basically have two options (and the younguns among us have three).

• Are you under 26? Stay on your parents’ insurance!

• COBRA: don’t know what it actually stands for, but you can pay (usually a small fortune) to stay on your insurance from your old job.

• Obamacare/Affordable Care: the cheaper (and harder to sign up for) version of COBRA.

Put on your frugal pants.

• A store of six to nine months of living expenses comes in handy, but if you don’t have this stocked away we won’t dwell, we’ll just move on and make it work (and don’t make the same mistake twice).

• Are you in a tight financial bind already? It might be time to move in with the parents or get a roommate. Save yourself some money-related stress (though no guarantees it won’t add other kinds of stress during this time).

• Trim the fat. Call Verizon to plead your case. Cut the cable for the next few months. Eat in. Put yourself on a spending freeze.

Find the silver lining.

• Allow yourself some cheap adventures. You might not have a ton of money, but you are rich in time, my friend. See where the wind takes you, and remember: rice and beans are filling but cheap, and PB&J is hard to get sick of.

  • Some ideas to get you started: Have your parents visit! Go to lots of museums! Take a roadtrip! Vacation with a good friend! Go camping! Take up biking! Go to the park for a lazy afternoon! Dream a little here.

• Something to watch for: some of your friends (and sometimes strangers) will be extraordinarily kind and generous during this time. Thank you, Katherine, Becca, and Gams. I can only try to pay it forward with such graciousness.

There you have it. Hope for the jobless. Unemployment isn’t exactly great, but it’s not so bad either. Cheers and wishing you the best in unemployment!