A Look at High Deductible Accounts

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Using the words 'rational' and 'health insurance' in the same sentence may seem like an oxymoron, but actually, this is exactly the approach HealthCompare takes. This does not take away from the fact that searching for health insurance is an important activity and that there is a lot of emotion, angst and deliberation involved in the process. It does mean that the emotions and decisions are addressed through understanding the big picture and knowing all the options available.

Using the words 'rational' and 'health insurance' in the same sentence may seem like an oxymoron, but actually, this is exactly the approach HealthCompare takes. We know that searching for health insurance is a difficult undertaking because there is so much to take into account that it becomes easy to become buried in details. Luckily, this process is made easier stepping back and looking at the big picture on certain topics.

At HealthCompare, we have no loyalty to any particular carrier or plans. We are not trying to sell you anything. Rather we are using our knowledge, skills and long standing relationship with multiple carriers to provide you with the right service and the right plan according to your circumstances and your needs.

Below is an example of how HealthCompare would approach a typical client looking to make some changes to his existing health insurance. This example is for illustrative purposes only.

Mike called in wanting to explore his options. After exploring Mike's situation and needs, HealthCompare was able to find out that Mike is a building contractor who's been having difficulty finding work because of the recession. He is single, in good health but still wants health insurance due to the nature of his work, but cannot afford to stay at the same monthly premiums.

Working through his needs Mike has not had to visit the doctor surgery or ER for the last two years and he seldom gets sick beyond the occasional head cold. His current plan has a low co-pay on doctors' visits and prescription drugs and a low coinsurance on hospital visits.

Mike still wants hospital coverage in the event of an emergency but feels he does not need as much coverage for doctor visits or prescription drugs.

Looking at Mike's needs, the best option was a plan with a $5,000 deductible. The monthly premium was $320 less than his previous monthly premiums.

Mikes was concerned about his ability to pay the $5,000 deductible should he need to go into hospital. $5,000 is a lot of money to find at once.

Looking at this rationally we can see that Mike has saved $3,840 on his yearly premiums through paying $320 less a month. This is $1,160 short of the $5,000 deductible. This does not mean that Mike will have that $3,840 in his pocket to pay off the deductible, however most hospitals will allow you to make payments against your deductible. Paying a monthly sum against the hospital bill, as you would your insurance premium makes it more manageable.

The alternative would be to pay off the entire hospital costs. Facing the prospect of a $5,000 bill is not an exaggeration or embellishment. According to the Agency for Healthcare Research and Quality, the average hospital visit in the US for 2007 was for 4.6 days with an average charge of $26,120.

The message here is to take a rational approach. Ask yourself the following questions:

  • What are my current medical needs?
  • What can I afford as a monthly payment?
  • What are my associated costs (Co-payments, Coinsurance, Deductibles)?
  • What is the likelihood of me having to make payments against those associated costs? Would I be better off paying a higher monthly premium?
  • Can I afford to make payments against a high deductible should I need to?
  • If I cannot directly afford the out of pocket expenses, am I able to realistically arrange to pay them?
  • At what level does the opportunity cost of saving on my monthly costs become eroded through leaving myself exposed to bills I cannot directly or indirectly cover?

At HealthCompare we are standing by to help you work through those questions. Call us today at (888) 748-5152 to speak to one of our experts.


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