We continue to be asked if an H.S.A. eligible health insurance plan is good decision even after people have made their plan elections for the year. This seems to be a question that needs a moment of attention.
There are certain high deductible health plans which qualify for health savings account contributions. Each year the government predetermines what the deductible and out of pocket limits will be for these plans. One of the key provisions of these high deductible plans is that all charges must apply to the deductible before the insurance company can start paying benefits. This means that there can be no copays for physician office visits, prescriptions, emergency room bills or other charges where we may be accustomed to having first dollar benefits.
The question to ask: is the premium savings enough to offset the loss of first dollar benefits which many of us have come to expect? How do we determine whether this type of plan will suit us better than the traditional copay driven plan?
The most obvious candidate for a high deductible health plan is the individual who truly uses medical services only on rare occasion. Please remember that the preventive and wellness services we access each year will likely be covered at 100% through the federally required wellness legislation. If an individual is in the market for primarily catastrophic coverage this would be a good option, especially if that individual also funds a health savings account.
The less obvious, but equally appropriate, candidate for this type of policy is the individual who expects to have major claims in the year. If an insured reaches the maximum out of pocket limit during the year the insurance company will pay 100% for bills incurred during the rest of the year. The premium cost for first dollar copays could be saved since the total out of pocket would be the same.
The individual who might not be as good a fit is the one who uses medical services moderately. Even then, please take a moment to determine how much extra premium is being paid for first dollar benefits. Are those copays really worth the extra premium? Inversely, do those first dollar benefits encourage us to get care we would postpone if we had to open our wallets wider?
Beware not to throw money at an insurance company for benefits that don’t benefit you as much as you think. Alternately, look carefully at your attitude toward paying medical bills for services that can be postponed (but perhaps should not be.) If those first dollar benefits encourage you to take better care of yourself please measure the cost of losing them.
For questions, please contact us at Czajkowski Dumpel & Associates, Inc. – we are here to help!