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Why is it a better idea to chose a higher deductible health insurance plan? |
How do you feel about the rising costs of healthcare? High deductible-health plans (HDHPs) appeal to many people because of the lower premiums. I don鈥檛 have any numbers to support this, but I would guess that the majority of HDHPs are purchased solely for this reason. If that鈥檚 true, then these people are probably not able to afford the high deductible should they or a family member fall ill. HDHPs are best for people whose medical expenses are generally for preventive care AND those who can afford to pay the annual deductible should the need arise. As you probably already know, HDHPs are being paired with health savings accounts (HSAs), which are supposed to encourage wiser consuming spending and saving. However, the jury is certainly out on the value of HSAs. So, my opinion is that HDHPs are better for some people and not as good for others. It depends on the individual鈥檚 own financial and medical situation. As for the rising costs of healthcare, that is the $2 trillion question, isn鈥檛 it? That鈥檚 how much money the US spent on health care in 2004 (actually it was $1.9 trillion, but $2 trillion is a little sexier). That鈥檚 16 percent of the US gross domestic product (GDP). To put that in a global perspective, only Japan, Germany, China, United Kingdom, and France generated more money domestically than the US spent on health care. We spend about three times as much per person on health insurance than any other country. Moreover, the average cost of family health insurance for four is more than the yearly salary for a minimum-wage worker. I know all of this isn鈥檛 an answer; I鈥檓 just underscoring the crisis here in the US. The biggest problem as I see it is that the US has a schizophrenic health insurance system. We are the only nation I know of where we rely so heavily on employer-provided insurance. Most other countries are either completely state-funded or private. We have an unhealthy mixture of both. On one hand it is free market where you are supposed to fend for yourself (and close to 50 million people are thus uninsured) while on the other hand 60 percent of working Americans get insurance through work, and 1 out of 3 Americans are insured by the government. While a lot of people moan about government sponsored health insurance programs, the administrative costs are much lower than private insurance companies and lower than the socialized insurance solutions in Europe. The actual cost of health care (drug, medical procedures, et al) is also astronomical here. Actual health care costs are about three times what they are in Canada. Some people blame doctors who over prescribe and over treat to make more money while other people say they have to do this because malpractice insurance is so high. And insurance companies have to spread the risk to everyone. For example, 40 percent of the money insurance companies pay out are from 1 percent of claimants, and many of these people are part of group health insurance plans through work or are helped by the government. Either way, a lot of people are subsidizing their risk through higher health insurance prices. You can compare HDHPs and talk about health savings accounts with local area insurance agents without any obligation at MostChoice.com. It鈥檚 a fast, simple way to research health plans that might be of interest to you. You can find MostChoice here: http://www.mostchoice.com/health-insuran... Hope this helps, Barnes@MostChoice It isn't necessarily better, but usually cheaper. It keeps the cost of the plan down. We insure our employees and it's so costly. We also increased the co-pay amount to keep the cost down. We don't want to discontinue health insurance for our employees, so we do what we can. When we retire and have to pay our own health insurance rising costs will greatly affect our retirement. I know there is regulation but it seems like no one is doing anything about it. Your health insurance plan is like your auto insurance. The higher the deductible, the less you pay for the insurance. It depends on the situation. Do you seem to always be getting hurt or always going to the doctor for one thing or the other or do you ususally see them only during your yearly check up which most insurance plans cover? Single or family? Either way you go it's a risk. Ideally,, a person will take a higher deductible plan and then stash some of the savings they are gaining from paying the lower premiums. Then, if you need it to cover some of the deductible, you have it. If you don't need it,, hey,, extra cash!! As for the rising cost of health care? Better get used to it. Drug companies and physicians don't particuarly care about you as a person unless you can pay and hospitals are in the same boat we are. Insurance companies will pay a physician several thousand dollars for a hour long procedure but only pay the hospital a few hundred dollars when they have actually accured all the cost. |
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