High deductible health insurance plans offer a variety of benefits to both consumers and employers. The upside is that high deductible plans have lower health insurance premiums. This is a major benefit to patients, especially among younger people who don’t anticipate large medical bills.
According to an article in USA Today, these plans make consumers more aware of health care costs, so that they are more careful in deciding if they really need expensive procedures and tests, which in turn drives down costs for employers.
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Usually high deductible insurance plans will only charge premiums and deductibles. They often do not charge copayments or percentages of treatment costs after the deductible is met. In some traditional health insurance plans, the costs of copays, premiums and percentages could actually add up to close to the amount of the high deductible plan.
Therefore, the high health insurance deductibles might actually end up saving you money even if a lot of health care is needed in some cases.
Also, some preventative services, such as exams and immunizations, are often completely covered by a high deductible insurance plan with no copayment or deductible.
What is an HSA?
High deductible health insurance plans are often used in conjunction with Health Savings Accounts (HSAs). According to the U.S. Treasury, HSA health insurance was created in 2003 to allow people with high deductible health insurance plans to have a way to save money for health-related expenses with tax advantages.
With an HSA, you contribute money before taxes into a fund of your choosing which can be independent of your employer or health insurance company. You then use that money to pay for the deductibles and other health care costs not covered by your high deductible insurance plan. HSA Rules reports that Congress sets the limit of how much a person can contribute to an HSA in a given year.
How is an HSA different from an FSA?
To get an HSA, you need to have a high deductible health insurance policy, but an FSA (Flexible Spending Account) can be used with any type of insurance policy. Unlike an FSA, money contributed to an HSA can be carried over from year to year. FSA’s have a “use it or lose it” rule for each year.
Money invested in an FSA sits around until it gets used or lost, but money in an HSA can be put into an investment account and draw interest. An HSA is also able to be moved between employers and insurance companies, so money left in the account can be carried over for a long time through several life changes.
Do high deductible plans require I stay in network?
Like traditional insurance plans, some high deductible plans require patients to stay in a network and some do not. According to About.com, for a plan that requires you to stay in the network, like an HMO, you would not be able to get coverage for treatment outside the network once your deductible is met. For a plan that provides coverage in and out of the network, like a PPO, the benefits are usually more substantial if you stay in the network.
Is there independent high deductible insurance?
There are a variety of independent high deductible health insurance plans available. Much of the push toward high deductible health insurance plans seems to be coming from employers. However, the benefits are great enough to the patient that they will sometimes seek independent high deductible insurance plans.
Many people who aren’t employed or can’t get health insurance through their employer are drawn to independent high deductible insurance plans. This is because they can’t afford to pay high premiums and they just need insurance in case of a catastrophic illness.
The people who benefit the most from the high deductible insurance plans, including single adults, young adults, and those who are in perfect health, are among the most likely to seek such insurance even if it’s not through an employer. For these people, or anyone else who wants to find a high deductible plan, it’s pretty easy to find a plan on the internet. Most of the better independent health insurance companies offer high deductible health insurance plans, so it’s just a matter of finding the right one for you.
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