Traditional Health Insurance vs AmeriPlan® Basic Health or Total Health

When should you keep your health insurance and when should you switch over to AmeriPlan® Basic Health? Well, let me tell you my situation. I work for the Federal Government and because I'm employed by them, they get to pay for two-thirds of my health insurance, which I use a PPO plan with Blue Cross/Blue Shield. They charge me $135 for every two weeks. If I wasn't employed by the feds and had to get my own health insurance, I would have to pay $405 every two weeks and if I pay for the whole year, I would pay:

$405 x 26 = $10,530 per year.

If I enjoy these benefits and assuming that I work full time, I would pay:

$135 x 26 = $3,510 per year.

If I divide this by 12 to get the monthly rate, that equates to:

$3,510 / 12 = $292.50

So what I pay an average per month is $292.50. This includes prescription at a substantial rate.

However, I got a letter today from Blue Cross/Blue Shield that Medco Health will handle the prescription starting January 1, 2008. This is the same benefits that we enjoy with AmeriPlan® Dental Plus or any of the upgraded packages that include Dental Plus.

Now let's say that I stay with health insurance. If so and I decided to dedicate 30 years of my life with the feds assuming that interest at 5% compounded monthly, the future value of the $292.50 monthly stream will be:

Future Value = (Monthly Stream) x [(1 + 0.05/12)^(12x30) - 1]/i x (1 + 0.05/12)
= (292.350) x [(1.004167)^360 - 1] / (0.05/12) x (1.004167)
=($292.50) x (1,076.73)
= $314,942.47

If we go with the Basic Health, we pay:

Future Value = $29.95 x 1,076.73 = $32,247.96

Since my health insurance inlcudes prescription coverage, that puts a twist on my computation. So let's use the cost of the Total Health instead. In that case:

Future Value = $39.95 x 1,076.73 = $43,015.22

Since the Total Health includes dental discounts, we need to add the cost of dental insurance, from the last article, which amounted to $62,679.48.

So if you get to enjoy health and dental insurance as a federal government employee who were brainwashed that having both of these provides you with coverage, your total 30-year cost will be:

$314,942.47 + $62,679.48 = $377,621.95

Over the 30-year life, would you rather pay $43,015.22 on AmeriPlan®'s Total Health or rather keep it the way it is by paying a total of $377,621.95? There is a difference of $334,606.73 that you can use throughout that life.

This doesn't account for doctor's and hospital fees which you still have to pay regardless of which one you decide to do.

Well it doesn't take a 13-year old to figure that one out.

In this case, I would choose AmeriPlan® Total Health and pay the $39.95. If I've been hospitalized, I have someone to negotiate the fees I'll have to pay, which I don't mind. If I don't, get hospitalized during that 30 year life, $334,606.73 easily goes down the drain.

Unlike the dental, there are some people who may be hospitalized for any reason, so that number WILL go down. When my daughter, Katherine was born, we were billed by the hospital for about $4,000 and the insurance covered the entire cost. So let'a say that in the 5th year, you had to spend $4,000 on the delivery. At 25 years, here's how much money is deducted from the $334,606.73.

FV = $4,000 x (1 + 0.05/12)^(12*25)
FV = $13,925.16

So your net savings is still $334,606.73 - $13,925.16 = $320,681.57 (still quite a bit of money).

So you can play with the numbers and WITH DISCIPLINE, you will still save around $320K. To me, that's money I can enjoy when I retire. So I suggest you think about this.

If for some reason you decided to go along with AmeriPlan®'s Total Health, go visit http://www.e-dental-plus.com for more information.

Cheers,

Sidney Juachon
sidney@sid.fm
http://sid.fm/benefits