First, congratulations! You’re ready to conquer the world! Think big thoughts! And one of those thoughts should be about Health Insurance Coverage. Since you're probably on a budget, you might want to look for an affordable policy with lower monthly payments and modest out-of-pocket costs.
You Have Options:
If you’re like a lot of people, you only use basic health care services, and don’t want to pay a lot for monthly health premiums.
The best solution for you and your family may be an HSA qualified plan. This is a plan that uses a higher deductible and provides you with the benefit of paying for small things in life, such as doctor’s office visits and testing which are normally minor throughout the year, along with prescription drugs if needed. The premium savings normally offset your out of pocket expenses you incur throughout the year.
Example:
PPO or HMO plans with low deductibles Higher Deductible HSA Plan
Or no deductible
Monthly cost range:
Single person $300-$550 $100- $300
Savings per year: $2,400 - $3,000
Family Plan $500 - $800 $300 - $500
Savings per year: $2,400 - $3,600
If you’re a healthy single person in this example, you would have saved $2,400 to $3,000 for the year. With this savings, you could easily pay for your doctor’s office visits and prescription drugs throughout the year. On a 100% coverage plan, once you reach your plan deductible, all costs are covered 100% with most carriers. Speak to your Broker for specific details.
Health Savings Account (HSA), A Health Savings Account is an alternative to traditional health insurance; it is a savings product that offers a different way for consumers to pay for their health care. HSAs enable you to pay for current health expenses and save for future qualified medical and retiree health expenses on a tax-free basis.
If your annual health expenses average $1,000 and you save $2,000 per year on monthly premiums, in ten years you would have saved $20,000 tax free if you contributed those savings into your HSA Account. Each company we represent offers an HSA qualified plan as part of their portfolio of quality health plans. For additional details, speak to your Broker about which company may be best suited for your particular needs.
If your objective is to pay as little as possible out of your own pocket before your plan begins covering your medical expenses, then you’re probably looking for a low deductible plan.
An HMO or a low deductible PPO plan may be best for your needs. An HMO has co-payments attached to each medical need you may have. Doctors office visits could be from $15.00 to $35.00 co-payment. Hospital stays would be from $200.00 per day to $500.00 per day with a maximum daily limit and outpatient testing would also have co-payments related to them as well. Speak to your Broker for more details on each carrier plans.
A Low deductible PPO plan would provide coverage on hospital stays and out patient testing after a $500.00 to $2,500.00 deductible. They also have doctors’ office co-payments that may not be subject to the annual deductible as well. Speak to your Broker for more details.
Your monthly premium payments would be higher than if you had a high deductible plan, but you would not be able to use an HSA account because your plan would pay for the cost above the co pay amounts or low deductible amounts.
If your goal is to cap the total amount you spend each year on medical expenses, then a low deductible PPO health plan may your best option.
It’s very important to understand that there are penalties charged when you use a provider outside of your Health Plans Network. Normally an HSA high deductible plan offers the best solution for capping your out of pocket expense. The key reason is because an HSA plan pays for 100% of all expenses after your deductible has been met and they also have set penalties for going outside your network.
HMO plans and some PPO plans depending on the insurance carrier, do not have set out of pocket limits for going outside their network. Ask your Broker to explain this in detail. Your assets could be at risk.
If your circumstance has you visiting the doctor and specialty care providers’ offices often, and you don’t want to pay a lot for these visits, then an HMO or High Deductible PPO is the best solution.
HMO plans and High Deductible PPO plans that have set doctors office co-payments for each visit and no limit on the number of visits each year, would be best suited for your situation. Most carriers offer a selection of deductibles and co-insurance options to keep the premiums affordable. It’s important to note, that when an insurance carrier is going to pay for your doctor’s office visits in addition to some wellness visits each year, they will increase your monthly premiums to cover this cost. With a wide variety of deductible and co-insurance options, you can potentially lower your monthly premiums and still have these desired benefits. Ask your Broker to explain this in detail.
If you take prescription drug medications frequently and want your plan to cover part of these expenses, you have a lot of options.
The majority of all health plans have prescription drug coverage automatically included or they have the option to add this coverage on. Depending on your carrier choice, you will have Generic, Brand Name and Preferred Brand Name co-payments and sometimes there is an individual deductible for prescription drugs. Speak to your Broker to find out whether an HMO, PPO or PPO HSA plan will meet your needs.
I would like my health care expenses to be tax-deductible even if I don't itemize my tax deductions.
An HSA qualified PPO plan would offer these tax deductions. You can learn more about this option in the Consumer Learning Center or speak to your Broker.
