High-Deductible Health Plans — Worth Considering Even With a Chronic Condition
High-deductible health plans are often recommended as an affordable option for healthy people.
But being healthy isn’t the only predictor for whether this popular plan could be right for you. Deb Muller, CEO of Avera Health Plans, said a high-deductible plan can save money for people with more medical expenses as long as they plan ahead for expenses.
“Even a person with a chronic condition can save with this plan,” Muller said. “Ask yourself if you’re a planner. If you can save money to cover expenses at the beginning of the year it’s worth considering a high-deductible plan.”
High-deductible health plans offer a lower monthly premium with a high deductible. Members must pay 100 percent of medical expenses until the deductible and out-of-pocket maximum are met. For most high-deductible health plans, the deductible and out-of-pocket maximum amounts are the same, but not always. The bright side is in most cases, once you meet the deductible and out-of-pocket maximum you’re covered 100 percent.
To help with the expenses the plan can be paired with a health savings account. It’s similar to a flexible savings account, but it’s your responsibility to put money into the account as often as you want. You can only squirrel away so much a year — $3,500 for individual plans and $7,000 for family plans in 2019. The good news is you can save your contributions year-over-year into retirement if you want.
High-deductible health plans are available if you have your insurance through your employer but you can also get individual plans. The way the plan works depends on if it is through your employer or it’s an individual plan through a health insurance company.
Here are some general tips if you’re interested in a high-deductible plan:
- Plan ahead. You know you’ll have to pay your deductible at the beginning of every plan year so make sure you have the money. The first months on your plan you might not have a lot in your HSA yet. Because your HSA is directly linked to your plan, you can’t put money into it before coverage begins. That doesn’t mean you shouldn’t start squirreling money away ahead of time into your own savings account to help with upfront costs.
- Do the math. If you have a chronic condition you should have an idea of how much you’re spending on doctors, medical equipment and prescriptions every year. Compare this with how much you’ll save on premiums a month.
- Find out about company benefits. If your plan is through an employer they may contribute to your HSA every month, which is an added benefit.
- Know what’s covered and take advantage. You’ll still get certain preventive care at no cost, such as immunizations, annual checkups and screenings. Take advantage of these services to stay as healthy as possible.
- Price shop. High-deductible health plans were created so the member would take more responsibility of their health care costs. One way to do this is to price shop when you need a service or procedure — just be sure to stay in-network.
- Talk to your bank. If you have any individual plan, you’ll work with a bank to set up a health savings account. If it is an employer plan, your company will help with the process. Your HSA benefits can vary according to the bank that you work with. Make sure you understand how your contributions will be managed.