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What’s the Deal with High Deductible Health Insurance Policies?

May 18, 2023 by Jay

Hey there, if your boss is talking about high deductible health insurance plans and you’re wondering what language they’re speaking, this is your decoder ring. Some workplaces might not give you an option, dropping the healthcare cost ball in your court. Others might be more generous, giving you the power to choose.

Before making your play, let’s break down what you’re signing up for if you opt for a high deductible health insurance plan.

Score Lower Premiums

First up on the list, high deductible health insurance plans mean lower premiums. This is a win because less cash leaves your bank account each month. Think of premiums as your subscription fee to Team Health Insurance. Even if you never use the service (fingers crossed!), you’ve still got to pay. Don’t pay, and you’re off the team.

Your work may have your back by covering some of your premium. Some workplaces go all in, covering 100% of your premium but leaving dependents on the sidelines. Others prefer a split bill scenario.

Brace for a High Deductible

As the name suggests, you’re committing to a high deductible with this plan. This is the amount you’ve got to foot before the insurance steps in. If your deductible is $5,000, then the first $5,000 of medical bills are on you before your insurance company gets involved.

Deductibles vary between insurance companies, so it’s crucial to choose one you can handle. Nobody wants to skip a doc visit because they can’t swing the cost.

Once you’ve reached your deductible, the insurance company starts covering a portion of the charges. With 80/20 coverage, for instance, your insurance will handle 80% of charges above your deductible, leaving you with 20%. But don’t sweat too much – most insurance policies set an ‘out of pocket maximum’ to cap what you have to pay.

Flipping a High Deductible Plan into an Affordable One

With a high deductible plan, don’t ghost on your healthcare. Check out these hacks to make your plan as wallet-friendly as possible:

Know what’s free. Many high deductible policies include routine physicals, mammograms, colonoscopies, and vaccinations. Embrace these opportunities – early detection can keep your healthcare costs down.

Consider a Health Savings Account (HSA). This tool helps you save for future medical bills using pre-tax dollars. Withdrawals for covered medical expenses are tax-free. Even the interest is tax-free! Stash as much as you can into your HSA to help manage your medical bills.

Compare and save – If your insurance isn’t through work, it’s worth shopping around for the best rates. Even among high deductible health insurance policies, there can be stark differences. Shop and ask to uncover the best deal.

Choose coverage that includes your doctors. If you’re picking insurance, look for a policy that covers your current doctors. If they aren’t in the network and you don’t want to switch, you may need to hunt for a different policy. Even with high deductible insurance, out of network coverage usually has lesser benefits than in-network.

Know your deductible status. Once you’ve met your deductible, it’s time to schedule any medical procedures you’ve been putting off. Stay within the same coverage period (usually the calendar year), and you’ll enjoy more coverage since your deductible is already covered. This means less cash out of your pocket.

A high deductible health insurance policy might seem intimidating, but it can be a money-saver in the end. Instead of pre-paying premiums, you keep more cash in your pocket until you need care. When you do use the policy, the bills might be big, but with an HSA, you could dodge some of that financial pressure.