Everyone knows that health insurance costs in America are rising at unsustainable rates, and many are looking for ways they can save. High deductible health plans (HDHP) are often overlooked when searching for health insurance. It’s a shame this is the case, because HDHPs can be a great way to save money on monthly premiums and can provide similar protection as other cadillac plans.
Let us first take a closer look at what a high deductible health plan is and how we can define it emaemj.org . The basic concept of an HDHP is by having a high annual deductible, one can purchase a plan with a low premium because of more exposure to health care costs. High deductible health plans must meet a minimum deductible dollar amount to qualify, and there must be a maximum dollar amount which the maximum out-of-pocket expense may not exceed. In Virginia, many health insurance companies have these high deductible health plans set up so the maximum out-of-pocket is nearly the same as their most expensive plans. A lot of times, health plans with lower deductibles and countless benefits will have a coinsurance rate after the deductible is met, where you pay that percentage of the health care cost until you reach the maximum out-of-pocket. Many high deductible health plans in Virginia are without coinsurance, which allows the out-of-pocket maximum be the same for the various health insurance plans. If you can live without some benefits of the cadillac plans, HDHPs can protect you from the catastrophies equally as well while keeping money in your wallet.
Another area to explore regarding HDHPs involves Health Savings Accounts (HSA). An HSA is a monetary account through an insurance company, bank, credit union, or investment company where you can place money into and watch it grow with interest. In order to set up an HSA, you must have an HDHP, as the two go hand in hand with each other. The account must be qualified as a health savings account, and any contribution made to the account can be written off as an expense for tax purposes. Therefore, if you need to withdraw money from your health savings account for a medical expense, you can pay that expense with pretax dollars and write the procedure off as an expense.
High deductible health insurance plans can be a valuable alternative to a standard health policy. When coupled with a health savings account, you can use pretax dollars to pay for medical expenses to relieve some of your tax burden. HDHPs generally always have lower premiums than health plans loaded with benefits you may not need. By using an HDHP, you can be protected from catastrophic events and lower the cost of your health insurance.
If you are new to Texas, or new to shopping for health insurance, you should know that the regulations and even the insurers you can buy a policy from will differ by state. Sometimes they even differ by zip code or county. It is really important to note this if you came from another place, and you think you know how the game is played. You may find a whole different set of rules in the Texas health insurance market!
It is also important to remember that your premiums will vary by where you live. The rates in Austin will be different than the rates in Houston or Dallas. Your choices will vary too. You sister in San Antonio may have great coverage from one company in San Antonio, but that company may not do business where you live in rural East Texas!
US News and World Report published study of the top major medical companies in Texas. They used measures like how good of a job the insurer did at managing health conditions and preventative care. Just for reference, some of the top companies they suggested follow.