Most of us have been recieving our open enrollment notification from employers. This is the time year when we review our health insurance, 401k, and other benefits. Many people are seeing an option being offered for the first time. Many employers are now offering what is called a High Deductible Health Plan.
Should you switch?
It depends. A High Deductible plan is great for people who are not chronically ill. For a healthy family, it is a great plan.
Consider the following example.
Take a couple who is 30-years-old. They can get a traditional 80/20, $1,000 deductible health insurance policy for $250 a month. If that same couple took out a High Deductible health plan they could get a similar plan for only $150 a month.
The difference is that the High Deductible Health Plan will pay 100% of the costs after the deductible. (Versus the 80% on a traditional plan). The drawback? The deductible is much higher - like $2,500. You're saving $100 a month though. ($1,200/ year) With the High Deductible Health Insurance Plan, you're also allowed to save your deductible annually into a tax-deductible savings account, and it grows tax-free.
For this type of health care insurance to work, you need to have a good emergency fund for the minor doctor's visits that will come up. You also need to take the $100 each month that you're saving and put that toward saving.
The High Dedcutible Health Insurance Plan is fantastic for people who are not chronically ill.
The other great thing about the High Deductible Health Insurance Plans is that it forces us to apply market pressure to keep medical costs reasonable. If we are responsible for minor doctors visits, we will be asking for free samples, and questioning every procedure..............."Is that really necessary?"
For more information on health insurance and Health Savings Accounts contact me at 913-422-0123
Katie Reed
Nick Reed State Farm/ 6632 Monticello Rd / Shawnee, KS 66226
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