Individuals may cost hundreds of dollars every month while family premiums can run up into the thousands.
This is an issue for private people and for businesses.
We are all waiting to see what reform plans finally get accepted, but most of us are not really holding our breath any more.
Instead of waiting for government intervention or reform, some creative agents are taking a different approach for their clients.
They found a way to make sure their clients were covered with the most benefits at the lowest possible price.
This play may seem a bit complicated at first.
But please give it a chance because it really can help many small businesses, individuals, and families afford premiums.
High Deductible Major Medical vs Lower Deductible Major Medical It may seem crazy to consider a $10,000 deductible major medical plan, but I would like you to consider this idea.
$10K is a lot of money, but a lot of times these plans cover at one hundred percent after the deductible is met.
Compare this with a $2,500 deductible that covers at 80/20 until the insured person has met a $10,000 yearly out of pocket maximum.
They both carry the same risk of having to spend $10k on medical expenses a year.
And some of those lower deductible plans have a $15k or even $20k out of pocket maximum..
Beware of Low Plan Deductibles with Low Yearly Maximums And beware of some lower deductible plans that advertise being budget friendly.
Many of them cap the plan limits for certain expenses at very low amounts, like $2,500 or even $25,000.
A common is example is one plan that caps out patient treatment at a choice of limits for varying premium amounts.
$2,500 may seem like a lot, but if you have made one trip to the emergency room lately, you will understand it is not.
$25,000 might seem like a lot, but it would not cover many chemotherapy treatments.
Chemotherapy is often done on an out patient basis.
I have heard of many examples of people maxing out their benefits on services like chemotherapy even though they had health insurance! The $10K Deductible Plan Looks Better Now So let us say you take out a high deductible health insurance policy with a very high yearly coverage limit.
That means our risk is limited to $10k.
Add a health savings account (HSA) to that and you have a sensible way to save for a health problem.
Many HSA accounts earn interest.
They all roll over from year to year so you do not lose anything.
And the final benefits are that they are tax advantaged up to IRS limits.
At retirement age, you can cash them in too.
So if you are lucky enough to save more than you spent, you have more retirement savings.
But What About That $10,000? Right now, as you are just shopping for health insurance for yourself, your family, or your business, that $10,000 may seem like an awful lot of money.
You have not begun to build an HSA account, and you do not know how you could come up with the money to pay for an emergency room visit or expensive medicine.
It may still seem like a big risk at the beginning.
Supplemental Health Insurance This is where health supplements kick in.
You can find very inexpensive accident or illness supplements that pay cash for covered health issues.
Many will pay up to $5 or $10 thousand dollars.
With a supplement, you can have the cash to pay for medical bills that are not going to be paid out by your major medical.
In addition, just being covered by a major medical plan should allow you negotiated fee discounts from your main insurance plan.
I had tests recently that would have cost well over $200, but were discounted to $75.
It is not secret that people with insurance pay less than people without insurance for many services.
Benefits of High Deductibles Plus Supplements
- Lower premiums and relaxed underwriting on higher deductible health plans.
- The savings power and tax advantages of an HSA.
- Affordable health supplements that pay cash.
- Business owners may cover the higher deductible plan but ask their employees to help contribute to the supplemental plans in order to share costs.
This may be the only way they can afford to provide their employees with coverage.
It is more complicated and requires the insured person to take more control of their own health plan.
But it also has a lot of benefits, and if you believe that health insurance just costs way too much, you should consider it.