1# Design your life – Your guide to choose the right health insurance

Dear Reader,

Welcome to the Design your life serie, if you want to know more about this serie, you can read its introduction post.

It is now time to renegotiate your health insurance and choose the right model with the right premium and the right supplementary insurance for the coming year 2018.

Yes, I just wrote supplementary insurance, Mustachians please calm down, you may end up saving money with the right supplementary insurance!

I strongly recommend following this step by step guide and doing every step with me, or you may end up lost! 😊 Let’s start and choose the right insurance model.

1. The insurance model

HMO = Health Maintenance Organization

If you choose the HMO model, you agree to always consult a specified doctor based at the HMO center. You will need to visit the same center affiliated to your insurance each time. Your HMO doctor will be compensated in the form of a monthly lump sum by the insurance, thus he has no incentives to extend or prescribe an unnecessary treatment. Therefore, the premiums are up to 25% cheaper than the standard model. In case of emergency, you need to contact your HMO doctor first if possible.

Family doctor

This model works pretty much as the HMO one, you agree to forgo the free choice of physicians and commit yourself to a specified one. Your health insurance gives you the choice to choose in a list of affiliated physicians. It is thought that this system allows a reduction of costs for the health insurance and therefore, the premiums are 15 to 20% cheaper than the standard insurance.

Telmed

This model allows you to choose your physician freely. You only need to call the help line of your insurance prior seeing a doctor. Medical experts will give you advice on how to deal with the situation and indicate you if you need to see a doctor, directly go to the hospital, or only go to the pharmacy. Thus, the health insurance prevents that the policyholder books unnecessary consultation, reducing the financial burden of the insurance through this mean. The premiums of this model are 15 to 20% cheaper than the standard insurance.

Note that with the HMO and the Family doctor model, if you don’t see your affiliated doctor or see another one, the costs may not be covered by some insurance.

Personal opinion

Personally, I don’t like to the HMO and the family doctor models because you forgo the free choice of physicians. Moreover, you choose between pre-selected doctors, who were probably selected for specific reasons, such as their “cost awareness”. I don’t want to be paranoid, but I sometimes question the relationship that the doctor may have with its affiliated insurance and what the doctor actually “has to do” in order to be included on the insurance’s list. Nevertheless, I think that the lump sum based compensation for physicians is an interesting option to keep the health costs under control, since the physician has no incentive to engage in unnecessary treatments and thus, to give his income a small boost.

So, to sum up, HMO and Family doctor models are out, the standard one and the Telmed are the one I would go for. Between the two I choose the Telmed, because it is 15-20% cheaper. I like the convenience of just calling the help line in order to know whether I need to see a doctor or not. However, I will have to make sure I call every single time I feel sick, otherwise I won’t benefit from a discount on my premiums.

2. The deductible

The choice of the deductible will largely influence the price of the monthly premium. The deductible ranges from 300.- to 2500.-. The deductible represents out-of-pocket expenses. For example, if you have a 300.- deductible and you are sick, you will pay only the first 300.- of your treatment, the rest will be covered by your insurance. If you had a 1000.- deductible, you pay the first 1000.- of the arising costs. Now, you understand why it will affect the monthly premium. Note that after you reach the limit of your deductible, you have to pay 10% of the treatment cost, up to 700.-. So, basically if you are really sick and take some expensive medicine or get a surgery, you will pay your 300.- deductible and then 10% of the arising cost up to 700.- Let’s move on and understand the impact of the deductible!

Using priminfo.admin.ch, we can see how the choice of the deductible directly influence the price of the premium.

You may choose to use comparis.ch, but keep in mind that they earn money for letting you access their information. Just keep in mind this saying when you’re online: If something is free, you are the product…

Let’s take an example! For the sake of simplicity, I have randomly chosen the profile of a 25 years old guy living in Zurich 😉. Now let see what information Priminfo gives us:

 

 

Between the lowest (300.-) and the highest (2500) deductible, it results a monthly difference  of 120.- in monthly premium, or 1440.- annualy.

Note that if you choose a high deductible, you have to ensure that you have enough cash on your saving account. If you choose the 300.- deductible, you need to have 1000 (300+700) cash, in the case of a 2500.- deductible, 3200 (2500+700) cash. This is no obligation but it is a good safety margin to avoid any financial stress caused by your health problems.

Always plan for the worst!

 

Some clever people did run some calculations and it results that the 300.- and the 2500.- are the only two economically optimal options. All other deductibles are not optimizing the total cost of your insurance, see for more details (l’arnaque de la franchise de la lamal).

Okay, now we know that only the 300.- and the 2500.- are the only relevant alternatives for us (if you still don’t believe me go and play with the tool of the FRC (calculateur de franchise de l’assurance maladie). You believe me now!?

We still need to identify which deductible suits us the most. The magazine « bon à savoir » elaborated a simple excel sheet to help us decide, let’s download the one for adults and choose together (choisir la bonne franchise) .

3. Finding his break-even point

Go back on priminfo , select the model you want (in my particular case Telmed or Callmed) and let the website  calculate for you which insurances are the cheapest. Then go under “Franchisenvergleich” and choose the insurance you would like to test (in my case Helsana “BeneFit PLUS Telmed”).

Go back to the excel sheet and enter the monthly premium you see in priminfo in the excel sheet. Simply copy paste the values as seen in Priminfo in the excel sheet:

 

 

Once you did this, let the magic works and go check the graph. Now estimate the number where the 2500 deductible cross the x abscissa at 0.

 

 

In my case the break-even point between the 300.- and the 2500 deductible is 1891.-, calculate yours. This break-even point depends on the insurance you are testing and the place where you live.

-But what the hell does this break-even point mean?

-Thank you for your question dear Reader, let me answer it!

It simply means that if I have for more than 1891.- of health expenses, I should select the 300.- deductible. If the total amount of my expected health expenses is under 1891.-, I should take the 2500.- deductible. It is simple as that!

Now you should be able to choose the right deductible, based on your liquidity and the estimated break-even of the two deductibles!

In my particular case, I said that I am almost never sick so I will go for the highest deductible 2500.- because I expect my health expenses to be less than 1891.-. It is the only subjective part of the process, in which you have to estimate your future health insurance costs.

If things go well, I save approximately 1440.- per year in comparison with the lowest deductible of 300. Therefore, if I stay healthy two years in a row I will save 2880.-, more than my entire deductible 2500.-. But I won’t forget to put aside 3200.- to hedge against the worst case scenario!

Let’s move on, we are almost there dear Reader! We still need to figure out which insurance company we want to trust.

4. The choice of the insurance

The magazine “bon à savoir” undertakes every year a satisfaction survey among the most important insurance companies.

It seems to me that Assura is cheap for a good reason… So let’s compare this survey with what priminfo suggested me:

 

 

One thing is sure, I won’t choose an insurance provided by Assura or Groupe Mutuel. In my case, I will only choose either Sanitas, Swica or Helsana. Don’t solely rely on the price to choose your insurance company!

5. Supplementary insurance

Now that I have identified the right model, the right deductible and some serious health insurance providers, I still need to take advantage of my habits to optimize a bit. Since I regularly workout, I will check if my gym is affiliated to one of these insurances. Luckily my gym is affiliated to Swica, Helsana. I now need to check how much would a supplementary insurance cost and which benefit it will provide me.

In my case, I am looking for a supplementary that would entirely or partially cover my gym membership. Note that the supplementary premium has to be cheaper than the benefit expected (reimbursement of my gym membership). For example, if I pay a supplementary insurance 250.- per year and get my 560.- membership reimbursed, it looks like a good deal to me! What do you think Mustachians?

I hope my explanations to choose the right insurance were helpful and motivated you to invest some time to choose among all deductibles and insurances available.

If it was not the case, please feel free to ask your questions in the comment section and I will give my best to help you 😊