The question isn't what you're paying month to month for your insurance. The real question is if you were stuck with a bill for $25,000, $50,000, or more for a surgery, cancer treatment or a hospital stay what's your actual cost? This number is what you should be comparing when you compare health plans. When comparing two plans look at not only what the monthly premium is, but compare using three different scenarios (or more) -- figure a year with no medical expenses, moderate medical expenses, and major medical expenses. Figure out what you'd pay and add that to the premium for the plan. Some plans will be the obvious choice under all three scenarios.
So, to make it simple let's say you're paying $100 per month for a $2400 deductible. And that plan covers you 100% after you've incurred $2400 of medical expenses. We'll also assume that this is a comprehensive plan and not a hospital/surgical, catastrophic, or otherwise stripped down plan that would severely limit your benefits. In this case your maximum risk is the deductible ($2400) and that would break down to $200/month ($2400 divided by 12). Your Total Monthly Cost for that plan would be $300/month ($100 premium + $200 to fund the potential expenses). So, if you had no expenses for the year your annual medical costs would run $1200 (just the premium), and if you had a $100,000 hospital stay your costs would be $3600 ($2400 deductible and $1200 premium).
Another way to look at this, using the same numbers, is that it would make NO sense to get an HMO or a low-deductible plan that would cost more than $300/month. I always get calls from people asking for low deductibles, but once they realize how to look at the "Total Monthly Cost" they end up with a much better plan than the one they thought they were looking for.
Finally it is more prudent to go with a comprehensive plan over a limited benefit plan. With the $100,000 hospital stay example the limited benefit plan may have a cap on the coverage leaving you with $50,000 or more of that bill to pay. And, these plans rarely save money in the monthly premium and the consumer also rarely realizes that they're NOT purchasing a comprehensive plan. Be sure you know what you have.
OK. So there's no zero deductible HSA...or is there? I'm often asked why more people don't have an HSA. Most of the time it's because they or their employer aren't aware that it exists or they're immediately turned off by the high deductible. But, those that have an open mind and actually think about it realize the deductible is quite small. Let's assume you get a $5000 deductible HSA plan for your family. The first thing you should understand is that deductible is usually one combined deductible for the WHOLE family -- NOT EACH as the case is with many plans. So, how do we make this plan a zero-deductible hsa plan? Put $5,000 into the savings account (and get a tax deduction of course). Now when you go to the doctor you don't pay any money out of pocket. The first $5,000 of bills comes out of the savings account (insurance provided by you) and then the insurance provided by the insurance company kicks in. So, to get a good comparison take the premium you pay to the insurance company and the amount to fully fund the HSA and compare that to what you're currently paying. So, why pay $800 per month for a true $0 deductible insurance plan because they're not going to give you money back if you don't get sick, but with an HSA the money is yours and grows tax-free if used properly. Our office can help you get a hsa-qualified health plan in place and we can help open the HSA itself.
