Is A High-Deductible Health Insurance Plan Right For You?


Contributed by LearnVest

It is getting closer to fall and that means, for most companies, time for open enrollment. This is the one time a year you can change your benefits through your employer (unless you have a “qualified” change during the year like having a baby or getting married). If your company doesn’t offer one already, there’s a good chance you’ll see a high-deductible health plan on your menu of choices this fall. There are a lot of different opinions out there about high-deductible plans, including the one recently voiced by the New York Times.

High-Deductible Plans Usually Begin Around $1,500 For An Individual.

To start, let me explain a little about high-deductible plans. They are just what they say— medical plans with a large deductible that you must cover before the plan starts to pick up any costs (in most cases, before prescription drugs are covered too). That deductible is usually around $1,500 or more for an individual and $3,000 or more for a family. Most plans are offered along with a health reimbursement account (HRA) or health savings account (HSA) —both are accounts that you manage and your employer will likely contribute to. These accounts help you meet your deductible so you don’t have to pay the full cost out of your own pocket. HSAs are becoming more and more popular and they have some nice tax advantages—and, most importantly, the account is yours (not your employer’s). You take it with you when you leave, like your 401(k).

These Plans Have Both Advantages And Disadvantages.

On the plus side, high-deductible plans almost always cover preventive care (so you won’t be paying for your annual exam or routine preventive screenings) and they usually have coverage for both in and out-of-network providers, which means you can see any doctor you want. They also have much lower premiums than other types of plans, sometimes even lower than HMOs, which restrict the providers you can see. But, of course, those lower premiums are because you’re on the hook for that deductible. So, what do you do?

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Any Thoughts?

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