Health Insurance

[Kung Wu]

I am going to beg you to pay attention to me this one time.

If you are under 50 (and probably under 60 -- and especially under 40!), please, please, PLEASE call either Blue Cross/Blue Shield and/or Preferred Health Systems (the insurance insiders consider these the best two in Kansas) and get a quote for yourself or your family on a "high deductible" Health Savings Account plan.

Even if your employer doesn't offer an HSA (shame on them), please, please, for your sake look into it.

I am begging you to please call those companies and get a quote immediately. Ask for different deductibles .. like $3000/6000 (what I have). The higher the deductible, the better off you are, but some people just can't get their head wrapped around a high-deductible -- please see my comments below -- you ALWAYS come out ahead with a high-deductible plan.

Quick background:

An HSA works very similar to an IRA -- it is a savings account that you can contribute money to (tax deductible like a traditional!) and has tax-free distributions (like a Roth!).

However: You can withdraw moeny from it without any penalties to cover any medical expenses!

And ... if you don't use it, it just sits there and compounds away.

I have personally ran through the numbers on HSA high-deductible insurance and EVERY SINGLE TIME, you come out ahead if you:

1) Don't use it at all (meaning you pay your insurance premiums but never get sick or injured in a given year): Because it's high deductible the total premiums you paid for the year are lower than otherwise.

2) You hit the full deductible: Every time I take a non high-deductible plan where when you add up the 80/20 copay + low deductible + 12 x the premium it equals MORE than if you pay your high deductible + 12 x the premium on an HSA plan. Every single time. I have never seen a low deductible plan win. At years end you come out ahead if you max out the usage on comparable coverages.

3) I have worked up several scenarios where you use a "portion" of the deductibles -- HSA comes out ahead every single time when I have calculated it in the past -- I'll admit it's been a couple of years since I put this in a spreadsheet, so do your own homework if you want to just to double check.

But regardless of whether you need the full insurance or don't use it at all you come out ahead.

And ... with BC/BS (should be the same with Preferred Health), once you hit your deductible, 100% of EVERYTHING is covered. Think about that. You hit your $3000 deductible, and 100% of EVERYTHING is covered -- that means you want your own private room should you be hospitalized? Done. You get the best service in the freaking industry because the hospital knows you are 100% covered. They will never skimp on medicines, service, etc.

I have been on one since the first year they were available and I am just dumb-founded that people don't know/understand them to this day. I cannot tell you how awesome they are.

There are two more "tricks" to them, that if you are have one or are considering I will be willing to share from my own personal experience.

If you can think of one reason why a non-HSA plan is better than HSA I challenge you to a duel. :) Just kidding but I'd like to hear it.

I can go on and on, and will, if anyone has questions about how these work.

[1979Shocker]

Wikipedia has more information.

http://en.wikipedia.org/wiki/Health_savings_account

[SubGod22]

Are you saying that for someone like me, who has a chronic illness and sees a doctor and gets lab work semi-regularly and is always just a few bad blood tests away from having a medical proceedure done that this is the best? I had said proceedure done this past fall. I'll admit that I don't make a lot and the thought of having to pay as much as I would in a case like this before they'll come to my rescue is a bit worrisome. I'm guessing I don't completely understand how it all works and would probably need to sit down and look over everything. My employer offers BCBS and that's what I have. It's a decent plan as they cover half of everything and I have no co-pay. I don't recall off the top of my head what point I have to reach before they pay it all. I want to say $1500. At this point, I'm still paying off the hospital in small payments and should be finished sometime this fall/winter.

I admit I've never thought much about how it works or whatever. I only took this job because I'd finally be covered and with my condition, I didn't want a flair up happening without insurance. As I tell people, the pay sucks, but the insurance is what it's all about. I may have to spend some time here in a couple weeks thinking more about it. Should probably spend most of my time focusing on school and finals before going too deep into this situation.

[kcshocker11]

SICKO!

[jazztrane]

One potential downside is the Rx coverage is usually minimal or all out of pocket on an HDHP versus a traditional PPO/HMO. If you set aside money in your HSA you can cover it, but if you have a lot of prescriptions you may not come out ahead versus paying a higher premium.

[Kung Wu]

Are you saying that for someone like me, who has a chronic illness and sees a doctor and gets lab work semi-regularly and is always just a few bad blood tests away from having a medical proceedure done that this is the best? I had said proceedure done this past fall. I'll admit that I don't make a lot and the thought of having to pay as much as I would in a case like this before they'll come to my rescue is a bit worrisome. I'm guessing I don't completely understand how it all works and would probably need to sit down and look over everything. My employer offers BCBS and that's what I have. It's a decent plan as they cover half of everything and I have no co-pay. I don't recall off the top of my head what point I have to reach before they pay it all. I want to say $1500. At this point, I'm still paying off the hospital in small payments and should be finished sometime this fall/winter.

I admit I've never thought much about how it works or whatever. I only took this job because I'd finally be covered and with my condition, I didn't want a flair up happening without insurance. As I tell people, the pay sucks, but the insurance is what it's all about. I may have to spend some time here in a couple weeks thinking more about it. Should probably spend most of my time focusing on school and finals before going too deep into this situation.

If your employer is contributing enough then it may not make as much sense for you, if you don't earn enough money to put money into savings.

The way the savings helps someone with a lower income is it's essentially a retirement account with the added benefit that you can withdraw money from it with no tax penalty to cover your deductible. So let's say you contribute $1000/yr to your savings plan and you get a bad blood result 4 years from now. You will have a little over $4000 sitting there and you can use $3000 of it to cover your deductible. At that point 100% of your expenses are covered for the remainder of the year, and you have another $1000 sitting there in the bank for subsequent years. Because 100% of your expenses is covered, you get the absolute best treatment that money can buy. The hospital will not be conservative with you because they aren't concerned whether you can cover your 80/20 or anything else. They just give you everything you need to get you rockin' again.

On the other hand, if you are healthy, your premiums are small because you are on a high deductible plan. Now if your employer is kicking in big time, then that may not be as big as a benefit to you, but you owe it to yourself to work it out. It's not hard to whip up a simple spreadsheet.

If you don't use the money you have saved by the time you are 65 (I think it's 65), then you get to withdraw that money without penalties just like an IRA -- so it's essentially an IRA with the added benefit you can use it anytime in your life for medical expenses.

[Kung Wu]

One potential downside is the Rx coverage is usually minimal or all out of pocket on an HDHP versus a traditional PPO/HMO. If you set aside money in your HSA you can cover it, but if you have a lot of prescriptions you may not come out ahead versus paying a higher premium.

Yes it's a consideration for sure, but the savings is usually built into the traditional premiums. And on the HDHP you can count prescriptions toward your deductible (though that's rarely helpful). In practice I haven't even come close to spending what a traditional with an RX card would have cost even though I have purchased plenty of expensive scripts through the years. You may have a point if a person has 2 or 3 prescriptions they need filled regularly -- I have never had to work that out.

[SubGod22]

If your employer is contributing enough then it may not make as much sense for you, if you don't earn enough money to put money into savings.

The way the savings helps someone with a lower income is it's essentially a retirement account with the added benefit that you can withdraw money from it with no tax penalty to cover your deductible. So let's say you contribute $1000/yr to your savings plan and you get a bad blood result 4 years from now. You will have a little over $4000 sitting there and you can use $3000 of it to cover your deductible. At that point 100% of your expenses are covered for the remainder of the year, and you have another $1000 sitting there in the bank for subsequent years. Because 100% of your expenses is covered, you get the absolute best treatment that money can buy. The hospital will not be conservative with you because they aren't concerned whether you can cover your 80/20 or anything else. They just give you everything you need to get you rockin' again.

On the other hand, if you are healthy, your premiums are small because you are on a high deductible plan. Now if your employer is kicking in big time, then that may not be as big as a benefit to you, but you owe it to yourself to work it out. It's not hard to whip up a simple spreadsheet.

If you don't use the money you have saved by the time you are 65 (I think it's 65), then you get to withdraw that money without penalties just like an IRA -- so it's essentially an IRA with the added benefit you can use it anytime in your life for medical expenses.

Thanks. I'll look into it and my situation more once finals are over. Prior to this past fall, it'd been 9 or 10 years since I'd had to go through that. In that case, it's something to look into. But it also may have to wait until I find better employment and have an easier time saving money.

Thanks for the info though.

[BostonWu]

3 out of 4 of my household members have asthma/allergies which means we have high annual medical overhead costs that are unavoidable in the form of scripts, shots and doctor’s visits. Sure the scripts cost a lot out of pocket but knowing what my ceiling is in the form of a high deductible (HSA) saves a lot of money. I don’t know about the rest of you but when I was on a regular medical plan the monthly premiums alone came out to exactly 45% of the HSA deductible amount…and then with a regular plan you have to pay 20% of services on top of the monthly premiums. If you have any chronic conditions or just one hospital stay then that 20% is a huge payment out of your pocket. As someone who has been on both types of medical plans I’m 100% convinced HSA is the way to go.