I’m getting ready to sign my family up for a health insurance plan for 2022 and it’ll be the ninth time we’ve gone through this process in only four years and in that time we’ve been on pretty much every type of plan imaginable: a PPO, an HMO, a high-deductible plan, a low-deductible plan. We’ve been on employer plans, marketplace plans, and even a Medicaid plan. I’ve learned a lot about analyzing health plans strategically and I’m going to share with you the mistakes that people make too often with choosing a health insurance plan.
#7Skipping a HDHP + HSA
The first up is ignoring those high deductible plans with HSAs. A lot of people just pass right by those plans because they’re afraid of what might happen if they have a big medical expense. They see that the deductible’s over ten thousand dollars and they’re thinking: I cannot possibly afford that. But if you’re a family that has low medical expenses, choosing that high deductible plan could save you thousands of dollars on monthly premiums and if you do have to pay the cost of a few medical things through the year, it’s likely those things are only going to cost you a few hundred dollars, so you’re still going to be ahead by a lot.
Also keep in mind that when you’re paying 100% of the cost before you hit the deductible, you’re paying the full insurance rate for that, not the full cash rate, so it might not be as bad as you think. The other group of people that could really benefit from these high deductible plans, surprisingly, can sometimes be people with very high medical expenses. The reason is that usually with these plans, once you meet that high deductible, everything 100% is completely covered after that point.
You’re not going to have any more co-pays co-insurance. The other thing to pay attention to is whether an employer offers you some free money in your HSA. If they give you that money and you don’t use it, it’s yours to keep forever. Remember that HSAs are not like FSAs and that the money does not go away at the end of the year.
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