subject: Hdhp Combined With An Hsa Can Slash Health Care Costs [print this page] Soaring health insurance premiums are causing a tremendous amount of uncertainty for those of us who are not covered by a group plan at work. Premiums have gone crazy the past 10 years! Small business owners are already struggling under increasing regulatory burdens, a weak economy and tight credit conditions. Soaring health insurance premiums just adds one more hurdle that small businesses face if they want to hire someone new. While doing some research for this article I looked at how much rates have gone up even for high deductible plans. A plan with a $1000 deductible and 20% coinsurance costs about $770 per month for a family plan, which seems insane for that level of coverage.
I talked to a business owner who sells Orthaheel orthotics and he said he was actively searching for a way to cover his employees without busting the bank in the process. This conversation left me convinced that more people should make the switch to an Health Savings Account like we did a few years ago and combine it with a HDHP (short for a high deductible health plan).
I did more research and found that there was a HSA compatible plan that had a $5000 deductible but then had 0% co-insurance and this plan saved him $294 per month so it would only take a bit over 1 year to save the amount of the deductible difference. The best way to use the money you save is by putting it into a tax advantaged Health Savings Account and then use that account to pay any health related expenses you incur. The optimum time of year to make the switch to one of these plans is in the spring after you get done with flu season. This is especially true if you have kids in school or daycare as they tend to make lots of trips to the doctor. The one down side of an HSA is that you can only use it after you have deposited enough money in it to cover the expense. This is slightly different than the FSA plans that many people use at work. However, the big benefit of the HSA is that any money not used will rollover to the next calendar year so your balance can keep growing. Our account has grown nicely over the past few years despite the fact that we used it to pay for our daughters orthodontics, glasses for 3 of us as well as all our doctor and dentist visits.
The HSA Compatible plans also give you free annual checkups and screenings which is nice. I actually see the doctor more often than I did on my old health insurance. I've had a physical each year since we've been on this plan and I had gone 25 years without one before, so it's been good for us. Make sure you take a look at what a Health Savings Account can do for you, especially if you are tired of watching your health insurance costs spiral out of control.
