Posts by tmcclosky

Pay a Higher Deductible or a Higher Premium?

May 11, 2018 Posted by health insurance 0 thoughts on “Pay a Higher Deductible or a Higher Premium?”

It’s the ultimate insurance debate: pay a higher deductible or higher premium? With many employers looking for ways to cut costs, the question to increase your monthly health insurance premiums or to pay a higher deductible is a concern you may be facing sooner rather than later.

First, let’s clarify the difference between a premium and a deductible.

  • A premium is the amount of money charged by your insurance company for the plan you’ve chosen. It is usually paid on a monthly basis, but can be billed a number of ways. You must pay your premium to keep your coverage active, regardless of whether you use it or not.
  • A deductible is a set amount you have to pay every year toward your medical bills before your insurance company starts paying. It varies by plan and some plans don’t have a deductible.

In 2017, more employers than ever included a high-deductible option on their 2017 menu of health plan offerings. An August survey of 600 U.S. companies by benefits consultancy Willis Towers Watson found that by 2018, nearly half will offer these plans exclusively. In 2006, high-deductible plans covered just 3 percent of workers. Fast-forward to 2016, and that figure was 29 percent, benefits consultancy Mercer found.

High Deductible Health Plans (HDHPs): Pros and Cons

HDHPs work differently than traditional POS (Point of Service) or PPO (Preferred Provider Organization) plans in that all healthcare expenses are paid out-of-pocket until the deductible is met. The concern with high deductibles is that it causes patients to not seek medical treatment because they fear the expense. Ultimately, this causes more extensive issues later on, such as those relating to diabetes, hypertension, depression, even cancer.

HDHP Pros:

  • Premiums are typically lower than with POS or PPO plans
  • Networks are not necessarily narrowed, as with HMOs
  • People who rarely use their health benefits may save money
  • If you are not on expensive medications, your monthly bills may be lower
  • Out-of-pocket expenses are not the market rate, but the negotiated rate between the healthcare provider and insurance company
  • Policyholders can open a health savings account (HSA), which never “expires,” to help cover out-of-pocket expenses

HDHP Cons:

  • People managing chronic illnesses find that their out-of-pocket expenses are high
  • Prescriptions, office visits, and diagnostic tests are completely out-of-pocket until you reach your deductible
  • If you need surgery, you will need to hit your deductible before the insurance company will pay anything
  • If your monthly out-of-pocket expenses are high, you aren’t taking full advantage of your HSA
  • Your deductible can be quite high (sometimes as much as $13,000 for families)

Those who initially lean toward higher insurance premiums are usually looking to save money in the long run, while those who originally gravitate to the higher deductible plans are looking to put more money in their pockets right now. However, sometimes it’s not that simple.

A 2011 study by the Kaiser Family Foundation found American families are increasingly paying more and more out of pocket for their health care costs – a whopping $15,073 for a family health insurance plan. However, it’s unlikely you’ll pay that full amount. With most employer-sponsored health care plans, your company pays a hefty dose of the premiums.

The Bureau of Labor Statistics reports that in 2008, private sector companies paid as much as 71 percent of family health insurance premiums. Public sector employers dished out even more – up to 73 percent.

While a high deductible plan and its subsequent lower premiums can put more money in your pocket, as well as your employer’s pocket, right now, it isn’t always the best choice. The Kaiser Family Foundation study also determined that the average deductible on these consumer-driven plans was nearly double that of traditional health insurance. On top of that, plans with a high deductible often come with a higher out-of-pocket max as well, sometimes as high as $10,000 a year for a family insurance plan.

Which plan is right for you?

As health insurance is not a one-size fits all item anymore, each person has to weigh the pros and cons of high deductible health plans against how they might need to use the policy. A person without an extensive medical history and unmarried without children might be able to risk such a plan. However, if an individual or someone in the  family sees a doctor once a month or needs to manage a medical or mental condition, perhaps a PPO would be a better.

Ultimately, choosing the right plan for you and your family can seem like you’re gambling with both your health and your money. If you are unsure of the insurance plan your company is offering you, a licensed insurance agent can assist you in finding a plan directly from the best health insurers.

The Case For Health Insurance

April 11, 2018 Posted by health insurance 0 thoughts on “The Case For Health Insurance”

Most people don’t want to pay for health insurance. For those below the age of thirty living healthy and active lifestyles, health insurance is viewed as an irrelevant, unnecessary cost. The reality is no one plans to get sick or hurt.  When given an option to spend money on insurance (and the related costs thereof) or spending money to enjoy themselves, the choice is relatively simple to make. A night out on the town, or monthly premiums for insurance coverage? (more…)

What is health insurance?

January 29, 2018 Posted by health insurance 0 thoughts on “What is health insurance?”

Health insurance, health care coverage, health coverage… so many words for the same thing but what exactly do they refer to? Is it really necessary to have? Although it’s difficult to capture the many details surrounding health insurance in the United States into a short, summarized article, we’ll do our best to make it easy to understand. (more…)

Government Extends Election Period to those Affected by a Weather Related Emergency or Major Disaster

December 1, 2017 Posted by medicare, news 0 thoughts on “Government Extends Election Period to those Affected by a Weather Related Emergency or Major Disaster”

Hurricanes Harvey, Irma, Maria, and Nate wreaked havoc in the majority of the south. As such, Alabama, Florida, Georgia, Louisiana, Mississippi, South Carolina, Texas, Puerto Rico, and the U.S. Virgin Islands have an extended Special Election Period (SEP) for Medicare beneficiaries affected by the hurricane and flooding. The Centers for Medicare & Medicaid Services (CMS) says the SEP will run through Dec. 31, 2017.

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What is Fixed Benefit Health Insurance?

October 23, 2017 Posted by health insurance 0 thoughts on “What is Fixed Benefit Health Insurance?”
Let’s face it — most medical insurance plans cost a lot.  Consumers end up paying for benefits they don’t use, and to make matters worse, the high deductibles and cost of copay make it difficult for the plan to pay any benefits. Fortunately, there is a way around this.  It’s called Fixed Benefit Health Insurance.

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New Health Insurance Options – Executive Order Simplified

October 12, 2017 Posted by health insurance, news 0 thoughts on “New Health Insurance Options – Executive Order Simplified”
Today, President Donald J. Trump signed an Executive order that will help millions of Americans this year. Individuals will finally have great options, an alternative to the Affordable Care Act “Obamacare.” So, what does this mean for you?

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Premium increase request as high as 71% for Obamacare Health Insurance in Florida

October 11, 2017 Posted by health insurance, news 0 thoughts on “Premium increase request as high as 71% for Obamacare Health Insurance in Florida”

Obamacare plan premiums may increase an average of 45 percent in Florida next year due to health care insurers rate hike requests, according to Florida’s Office of Insurance Regulation. (more…)

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