What drug coverage should we get our son?

July 2007 - It's time to decide what health care option our new addition will need when he arrives. If you're like me, picking healthcare is more difficult than splitting an atom. From what they tell us, my company has made things "easier" but it's still something you need to spend time on to figure out.

My wife pays $135 a month for coverage. For her donation, she gets a $20 co-pay, a $250 deductible, %100 coinsurance (what ever that is), and drug coverage at $10/%30/%30. That is $10 for a 30 day supply of generic drugs (e.g. high blood pressure medicine); %30 of a 30 day supply of retail generic formula with a $50 max; and %30 of a 30 day supply of retail nonformula (i.e. all other drugs you may need) with a $50 max.

I pay $104 a month for coverage. I get a $20 co-pay, a $500 deductible, %100 coinsurance, and drug coverage at $10/$30/$60. That is $10 for a 30 day supply of generic drugs (e.g. high blood pressure medicine); $30 for a 30 day supply of retail generic formula; and $30 for a 30 day supply of retail nonformula. As you can see, her plan has less risk, which works out since she had an emergency room visit (x-ray on her foot) a few months back.

Our dilemma is whether to add the baby to my plan, her plan, or go with a combined family plan. Adding the baby to her plan will increase her monthly expense to $284 a month. With her plan we will pay a $250 deductible for the baby's birth and have the best drug coverage the company offers. If he needs drugs (who doesn't these days) we'll only pay %30 of the price up to $50.

Adding the baby to my plan increases my monthly charge to $224. With my plan we pay a $500 deductible when he arrives and have the second best drug coverage we offer. Compared to my wife's plan we save $60 a month, but must pay an extra $250 (my deductible less her deductible) when he's born. Luckily after four months we would break even on the deductible which is to our advantage. But if he needs drug coverage, we'd end up paying $30 a month (or retail price if the drug is less than $30) which could eat into our savings if drug prices are less than $100.

If we went with the family plan and used my wife's plan as the basis, we'd pay $448. If we used mine as the base, we'd pay $358. With my plan we'd have to pay a $750 deductible ($1000 less $250 that she all already paid for the x-ray), which is no good. With my wife's plan we'd only pay $250 ($500 less $250 that she all already paid for the x-ray), but we'd have too much coverage for me.

We decided to put the baby on my wife's coverage which costs her $284 and I decided to keep my own coverage which is $104. This gives us a total cost of $388.29, which is not the lowest option but does ensure mom and baby have the best coverage available (remove all risk), which makes both mom and dad happy.