High Deductible Insurance

[BlueHair]

I've just made the decision to switch to a high deductible plan with an HSA. It seems like a no-brainer, but I was hoping to get some advice from you fine folks since 99% of you are smarter than I am. The basics are:

1. $10,000 deductible
2. $175 per month premium
3. $500 per person preventive care included
4. 100% coverage after deductible is met

That premium is about $400 per month cheaper than my 80% coverage. I plan on putting that savings in an HSA, so it will take about two years until I have enough money to pay the full deductible in case of a catastrophe.

Is there something that I'm missing? It seems like a great deal and something I should have done a long time ago. I'm worried there is something I'm not taking into consideration.

[Indy Coug]

I'm worried there is something I'm not taking into consideration.

Your ability/inability to finance the deductible. Since you are saving $400/month in premiums, that represents another $433/month you could potentially be on the hook for.

If you have a long history of having significantly less than $10,000 a year in medical costs, it's probably not a big concern.

My employer contributes towards my HSA an amount that almost equals the annual deductible. So making the change was a no-brainer.

[jay santos]

It's hard to know without modeling it out.

Generally, if you have low expenses it works out better to go with a high deductible plan and high expenses a low deductible plan, but that's kind of obvious.

[ERCougar]

This is almost exactly my plan.

No, there are no catches. It's a much better deal and I think this is the future of healthcare in this country. The savings come from you actually treating health insurance like "insurance".

I wouldn't be too worried about not having 10K saved yet (although you should put your $400/month savings towards that). Every hospital I know will set up payment plans for you if you need it, usually at no interest--they'd much rather be paid over ten years than not at all.

[BlueHair]

Your ability/inability to finance the deductible. Since you are saving $400/month in premiums, that represents another $433/month you could potentially be on the hook for.

If you have a long history of having significantly less than $10,000 a year in medical costs, it's probably not a big concern.

My employer contributes towards my HSA an amount that almost equals the annual deductible. So making the change was a no-brainer.

We have about $500 per year in doctor visits. I called our Pediatrician to ask how much a sick visit is. I was stunned when his secretary told me it would be about $50 if they didn't have to bill insurance. The only thing I know we're going to need in the next two years are immunizations. The plan covers that.

I could pay the deductible if I had to. Obviously, I hope I don't have to. The HSA funds are tax deductible, making health expenses deductible from the first dollar instead of the current 10% (?) threshold. In the event that we had some medical situation arise that would need long term care, I would join my company's group plan at open enrollment. Pre-existing conditions aren't a concern with a group plan.

[Donuthole]

This is the exact type of plan I would be on if I didn't need maternity coverage (the plans like this I was reviewing didn't have maternity coverage--perhaps some do?).

It seems completely asinine to be shelling out $700/mo for my family's medical coverage when, on average, the totality of our health care in a year is two well checks a year for each of the kids, semi-annual trips to the dentist for all, and maybe one or two unplanned trips to the doctor/ER per year. But without an HSA which will cover complications arising from pregnancy, we're kinda stuck.

[ERCougar]

We have about $500 per year in doctor visits. I called our Pediatrician to ask how much a sick visit is. I was stunned when his secretary told me it would be about $50 if they didn't have to bill insurance. The only thing I know we're going to need in the next two years are immunizations. The plan covers that.

This is a benefit I've also discovered--lower charges for people without insurance billing. I'm not at all involved in billing so I don't know the answer this, but I always thought this was illegal. JIC? Cardiac/hostile?

[BlueHair]

The savings come from you actually treating health insurance like "insurance".

This is the key. Too many people treat insurance like it's pre-paid medical. When you are accountable to pay for your treatment, you choose more wisely.

[Uncle Ted]

I have about the same plan for my family. I took my daughter to the doctor a few months ago and she needed some meds (about $300 or so worth). When the doctor found out how high my deductible was she just gave her a bunch of samples and gave us a different prescription for generic version of the same drug which was like a 3rd the cost. Between the samples and the greatly reduced cost of the generic version my total HSA bill was about $50. People that have plans that pay most of their med costs don't give a rat's ass how much drugs cost but end up paying for it one way or another in the end.

Also, it is nice being about to buy some of the over-the-counter things like vitamins with my HSA credit card (with the no-tax money). I guess, however, the Obama man (with his wise and wonderful Obamacare) is taking this away which makes no sense at all, IMHO.

[Indy Coug]

This is the key. Too many people treat insurance like it's pre-paid medical. When you are accountable to pay for your treatment, you choose more wisely.

Indubitably. My car insurance doesn't give me free reign to fix my car and my life insurance doesn't give me free reign to reincarnate.

[Uncle Ted]

This is a benefit I've also discovered--lower charges for people without insurance billing. I'm not at all involved in billing so I don't know the answer this, but I always thought this was illegal. JIC? Cardiac/hostile?

Our dentist gives us a nice "paying with cash (i.e. the HSA card)" discount. She said is it worth it because of all the trouble they have with billing and insurance.

[Moliere]

This is the key. Too many people treat insurance like it's pre-paid medical. When you are accountable to pay for your treatment, you choose more wisely.

Great post and it hits the nail on the head. People are too far distanced from the true cost of medical care. I'm a firm believer that middle-of-the-road health reform is the worst possible way to get it done. I'm personally a nationalized health care guy but I think a system where people are incentizived to stay healthy (eat well and exercised) and not penalized for having major health problems they can't control would work very well.

[Indy Coug]

Great post and it hits the nail on the head. People are too far distanced from the true cost of medical care. I'm a firm believer that middle-of-the-road health reform is the worst possible way to get it done. I'm personally a nationalized health care guy but I think a system where people are incentizived to stay healthy (eat well and exercised) and not penalized for having major health problems they can't control would work very well.

The irony is that those who are least able to finance the high deductible are the ones that would benefit most from the lower premiums.

[creekster]

This is a benefit I've also discovered--lower charges for people without insurance billing. I'm not at all involved in billing so I don't know the answer this, but I always thought this was illegal. JIC? Cardiac/hostile?

LAUte probabyl knows best, but I think it is fine. Thye bill the same but accept less in compromise.

[Uncle Ted]

Indubitably. My car insurance doesn't give me free reign to fix my car

I keep a high deductible insurance on our cars insurance as well and usually end up fixing it myself for small dings and whatnot. Of course, this may require that you have (at least most of) your car paid for.