Choosing a Health Plan at Open Enrollment: Compare Your Worst-Case Year

• Number 1: the “healthy year” cost
• Number 2: the “bad year” cost
• Example
• Then adjust for your situation
• Free tools

Paycheck deductions are the most visible part of a health plan, but they are rarely the whole story. A quick way to compare plans is to work out two numbers for each.

§Number 1: the “healthy year” cost

Annual premium (your share) minus any employer HSA contribution.

§Number 2: the “bad year” cost

Annual premium + the out-of-pocket maximum (minus any employer HSA contribution).

§Example

Plan A (PPO/POS): $260 per paycheck, 26 paychecks = $6,760 premium; out-of-pocket max $4,000. Healthy year $6,760; bad year $10,760.

Plan B (high-deductible with HSA): $160 per paycheck = $4,160 premium; out-of-pocket max $7,000; employer adds $750 to the HSA. Healthy year $3,410; bad year $10,410.

Here Plan B is cheaper in both cases, which surprises many people. With other numbers, Plan A wins in a bad year; the point is to see both figures side by side.

§Then adjust for your situation

• Known costs next year (a planned surgery, a baby, ongoing prescriptions) push you toward the “bad year” figure.
• Check that your doctors and prescriptions are in network for each plan.
• If you pick a high-deductible plan, the premium saving only helps if you actually set it aside, ideally in the HSA, to cover the deductible.

§Free tools

• Paycheck budget calculator: https://smartbudgetsheets.surge.sh/calculators/paycheck-budget-calculator/?utm_source=nostr
• Emergency fund calculator: https://smartbudgetsheets.surge.sh/calculators/emergency-fund-calculator/?utm_source=nostr
• Debt Payoff Planner, up to 8 debts (Payhip): https://payhip.com/b/PtBLU?utm_source=nostr
• 42 free budget templates, pay what you want ($0 is fine): https://smartbudgetsheet.gumroad.com/l/ngpkrb?utm_source=nostr

General information, not financial advice. Figures are rounded examples.