No one wants to be sick, and many employers provide some sort of health insurance, the question is: Is the standard health plan with copays, coinsurance and deductibles the best for your wallet?
The Crazy, Current System
If you think about it, the current “normal” health plans are incredibly complex. There are some procedures that are free. Others require a “copay” where you pay a fixed price. Then there’s the question of different deductibles, and coinsurance. Most people just end up paying whatever’s asked because it’s hard to remember what everything is.
And then there are the plans to help you save pre-tax money for this type of plan. Called Flexible Spending Accounts, you can contribute a fixed set of money per check into these accounts and your employer must save it for any medical expenses you have.
- It’s nice in that it is as if you have the whole amount at the beginning the year to pay for big expenses.
- It’s bad in that if you don’t use it all up on qualifying medical expenses by the end of the year, the company keeps the money.
High Deductible Plans
The newest form of health insurance include a high deductible plan with no copays. The beauty is that the everything you pay in health care goes toward the deductible, and these are usually structured so that when you reach the deductible the rest is free. Copays, in the traditional plan, do not usually contribute toward the deductible, and after you reach the deductible you still have coinsurance.
And the savings vehicle is different. With high deductible plans you have a Health Savings Account which is an account at a bank that you have check writing and ATM card privileges. The money is yours and can be invested in mutual funds and it sits in a savings bearing account. Money is paid directly from this account (if present).
The other thing that’s nice about High Deductible accounts is that the current rates are as much as a couple hundred dollars less than the traditional accounts. That means you could save the difference between the accounts in your HSA account for your medical expenses—if you have them. If you don’t it’s your money and it can roll over every year.
Ask your employer if you have the opportunity to get into a HSA enabled High Deductible Account. You’ll be glad you did!
Ive been doing alot of reading about these high deductible health plan lately as Im about to obtain one through my job. I admit, at first it seems like alot to pay for, but there is a chance for some big savings as well. These plans are usually accomodated by a HSA, HRA, or FSA, into which you put a certain amout pretax, and said money can be used to pay for medical expenses, or go towards your deductible. It saves the company money, which in the long run, lets you keep your job, which is nice in this economy. And even though you have to pay everything up to your agreed deductible amount, everything after is covered, with perameters of your plan. Another bonus is that, if you use the Doctor infrequently, the money in HSA, is your money,and it accumulates. If you leave the job, that money is still yours. There are pros and cons to every situation. I have posted a couple links I found to be very useful. I hope they help in your search for info.
http://highdeductiblehealthplan.blogspot.com/
http://www.youtube.com/highdeductiblehealth
Posted by Jordan | December 15, 2009, 4:35 pmThe biggest regret I had when the bank I work for closed a few years ago was the excellent health plan we had. Although I and my family was never able to make full use of the plan because we, thankfully, were blessed with good health, it still is big in the sense that you always have peace of mind knowing that you can lean on something this solid when it comes to health matters.
This high deductible health plan has more pros than cons to it.
.-= Jenny M.´s last blog ..Samsung Remote Controls =-.
Posted by Jenny M. | December 16, 2009, 1:34 am