I’ll be honest. I’ve found myself overloaded with finance for the past several months. My job is already in finance, but on top of that, we’ve also been looking into estate planning and education funds like Coverdells and 529s now that we have a son, figuring out what to invest in given recent conditions and even starting our house hunting process (which, in the Bay Area, means you’re still in for sticker shock even though prices have supposedly dropped dramatically).

Still, these are things you have to do once you’re a parent. One thing that became evident through the estate planning process we’ve begun is that we’re woefully underinsured. My husband and I had always just signed up for whatever default life insurance was offered by our employers, but all that’s changed now that we have a child.

So, the last several weeks have seen us looking into term life insurance options. There are actually many types of life insurance policies, but we opted for term since it’s the simplest and inexpensive, and suit our needs.

Here are some things we learned through the process so far:
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In my previous post about the cost of delivering a baby, I noted that the hospital and doctors had charged a total of $24,520 “gross” before the insurance company discounted for reasonable and customary charges. We continue to receive various notices from the insurance company for additional fees.

Just a couple of days ago, another insurance notice came in for a total of $5,213 for line items like “nursery”, “drugs”, 3 “laboratories”, and “auditory exams” that were submitted to them by the hospital. Actually, our baby never spent time in the nursery (he bunked in the same room with us per hospital policy, but maybe that counts as the same thing). Running total in charges so far: $29,733.

The interesting thing about this bill is that the insurance company won’t be paying for the $5K in charges, and neither will we. Apparently these charges are covered in some sort of global or all-inclusive or “case rate” reimbursement.

Like in my other post, I still can’t figure this out. Either the hospital/doctors are charging actual costs, and the insurance companies are paying “less” than they should, or the hospital/doctors are charging extra amounts above reasonable costs, and the only people paying them are those who are uninsured. Or maybe I’m still misunderstanding how this whole system works.

Regardless, I’m definitely starting to see why it is so many people end up in bankruptcy due to medical costs.

It’s been about a month since our baby boy was born, and the bills and insurance statements from our delivery have started to roll in. We’re currently on a Cigna PPO plan, so we (thank goodness) only pay a small fraction of the costs below, but it’s been eye-opening to see how much the hospital and doctors charged for our 60-hour (2 1/2 day) stay.

What I’ve always wondered is, are people who don’t have insurance charged the full amounts below since they aren’t eligible for the “reasonable and customary charges” discount? If so, that seems scandalous. Just look at how much the hospital stay cost. I still can’t imagine how that charge is even justifiable.

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I saw a story on Yahoo! a couple of days ago that reported that consumers prefer PPOs and HMOs to CDHPs. Having used all of these options myself, I thought the article was pretty interesting, especially because I happen to prefer CDHPs. The article was quoting a recent study conducted by the Center for Studying Health System Change.

Some of the key points found in the study were that, surprisingly, almost 40% of all workers who are offered a CDHP plan have only that plan to choose from. Yet, when workers are offered a choice of plans, less than 20% opt for a CDHP.

I’ve written about my experiences with Lumenos’s CDHP and how I discovered that all my coworkers had opted for PPO and HMO plans instead, because they didn’t understand how the CDHP plan worked, even though the plan cost less and gave much more flexibility than the other two options we were offered. The following quote from the Yahoo! article, pretty much sums it up:

Experts have said the plans will bring down health care costs because they make patients more financially accountable for their spending decisions. However, the study shows that people aren’t necessarily anxious for that responsibility, said Jon Gabel, a study author and vice president of the center. “Most Americans are risk averse. They don’t like making financial decisions.”

It just goes to show that whether you’re trying to find a stock to invest in, find lower auto insurance, or choose a health plan, you can often do better or save more money if you put in some extra time and effort to understand the options available to you. Our employers currently don’t offer a CDHP plan, so we’ve opted for a PPO instead. It’s fine, no big complaints, it certainly covers much less than Lumenos did.

That being said, a CDHP plan might not be necessarily right for everyone. Someone left an understandably angry comment on my Lumenos CDHP post, which was directed at the company for not covering a particular type of treatment. While figuring out an insurance plan is about as interesting as watching paint dry, it’s important to find one that’s right for you.

I’m trying to decide whether having pet health insurance is worthwhile.

We recently brought a new French Bulldog puppy to join her sister in our home. Upon registration with the AKC, one of the features offered is a 60-day free trial for a pet insurance policy that covers accidents and injuries only within the 1st 30 days and accidents, injuries, and illnesses during the second half of the trial period. So far, we haven’t had to use it at all. The AKC insurance plan is apparently offered through PetPartners, a UK company, and once our trial is up, there are a few different plan choices available.

We haven’t used or had pet insurance in the past for Lola, our other Frenchie. But then again, we also weren’t living in the Bay Area, where vet expenses seem to be easily double what they were in the Pacific Northwest, even for routine care. Earlier this week, when I brought our puppy in for a checkup, I asked one of the staff if they recommended any particular pet insurance company. They gave me a brochure for VPI. It seems AKC’s plan is costlier, but covered incidents are covered at 80% (a 20% copay), whereas the VPI plan is fee-based and cheaper.

But based on my research so far, I’m still disinclined to sign up for pet insurance. Here’s why:

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