What healthcare savings actually looks like for a family
If you work in employee benefits, you spend a lot of time thinking about the tension between offering families good healthcare coverage and keeping that coverage affordable for the company. The Total Care Option (TCO) is one of the rare cases where those two goals can work together.
To see what that actually means, consider the Smiths and the Johnsons.
Mrs. Smith and Mr. Johnson work at the same company. They have the same benefits available to them during open enrollment, and each has a working spouse who can get health coverage through their own employer. Both households have children, including a child with allergies who sees a specialist twice a year. In both families, one spouse has also been putting off a knee problem that will eventually require physical therapy.
In October, neither family knows exactly how much healthcare they're going to use the following year. They just know they have a family, a health plan, and a calendar that will probably have a few doctor's appointments on it. The Smiths stay on the company health plan, the same one they've had for three years. The Johnsons enroll in the Total Care Option and move their family to the spouse's group health plan.
At that point, the families' healthcare journeys are nearly identical. What changes is what happens when the bills start arriving.
February
Both families take their child to the allergy specialist in February, and both visits result in a $340 bill.
For the Smiths, most of the bill goes toward their deductible. They put it on a credit card and tell themselves they'll catch up when things calm down. The Johnsons get the same $340 bill after the same kind of visit, but their spouse's plan processes the claim and they submit the EOB to Healia. A couple of days later, the reimbursement shows up in their account.
Their February was medically identical. They saw the same kind of doctor, for the same kind of appointment, and had the same kind of bill. The difference was what happened after the bill arrived, and that difference starts to matter more as the year goes on.
- Smith Family Bill: $340
- Johnson Family Bill: $0
April through August
By spring, the knee problem that one spouse has been putting off has finally become impossible to ignore. Both families end up doing six weeks of physical therapy, twice a week. In this example, each session costs $85 after insurance.
For the Smiths, that's more than $1,000 in additional out-of-pocket costs, on top of the specialist bill from February that's still sitting in the back of their minds. None of the individual expenses feels enormous, but together they're starting to put pressure on the monthly budget.
The Johnsons go through the same six weeks of therapy with the same provider and the same $85 cost per session. They submit their eligible expenses to Healia as they go, using the EOBs or provider bills they already receive. Healia reviews claims daily, with 98% processed within two business days and most within one.
The Johnsons still have a knee to deal with, but they have fewer medical bills competing for space in the family budget.
- Smith Family Bill: $1,020
- Johnson Family Bill: $0
September through December
By fall, the year brings the usual assortment of healthcare expenses: a couple of urgent care visits, a prescription refill, and maybe one more appointment that wasn't on anyone's calendar back in January.
For the Smiths, each new expense lands on top of everything they've already paid that year. The two urgent care visits run $150 each after insurance. The prescription refill costs $40. The extra appointment, with its own copay and coinsurance, comes to $320. That's $660 for the fall alone.
For the Johnsons, the same expenses go through the process they've been using all year. They submit documentation for eligible out-of-pocket expenses, and their employer reimburses those expenses through the HRA, up to the amount established in the plan. The TCO can cover deductibles, copays, and coinsurance, with employers able to include additional eligible medical expenses depending on plan design.
By December, the Smiths have spent $2,020 out of pocket across the year: $340 in February, $1,020 on physical therapy, and $660 in the fall. The Johnsons have had much of the same healthcare. They've seen the same doctors, filled the same prescriptions, and dealt with the same knee, but their experience of paying for that healthcare has been very different.
Total out-of-pocket spend difference for the year
- Smith Family Bill: $2,000+
- Johnson Family Bill: $0
Two families, one year
For the Smiths, healthcare costs have been something they've had to manage all year long. A bill here, a deductible there, and another expense just when they thought they were catching up. For the Johnsons, the experience has been different because their family is using coverage through the spouse's employer and the TCO is helping cover their eligible out-of-pocket costs.
That's the part of the TCO that can be easy to lose in a benefits presentation. An employer may look at the TCO and see a way to reduce the cost of covering certain households on its health plan. A family experiences something much more immediate: a medical bill gets reimbursed.
Both things matter.
The employer is trying to manage healthcare costs responsibly. The family is trying to get through a year of ordinary healthcare without every bill becoming a financial calculation. The TCO gives employers a way to address both, which is why the family story is worth telling alongside the savings analysis.
A spreadsheet can show an employer what the program could mean across hundreds of households. It can't show what that savings feels like when you're standing at the kitchen counter with a $340 specialist bill, or when you're trying to figure out how to fit six weeks of physical therapy into an already tight monthly budget.
The Smiths and the Johnsons are fictional. The bills aren't.
For families, healthcare savings can mean having a little more room in the budget when healthcare happens. For employers, it can mean finding that room without simply asking families to absorb more of the cost.
That's what healthcare savings actually looks like for a family.