There are many advantages to consumer driven health plans for individuals. However, there are also a couple of things you should consider before making the change. Here’s how to decide if this type of plan is the right solution for you.
Consumer driven plans consist of two parts:
1. A Qualified High Deductible Health Plan:
These plans don’t cover everyday expenses. They are major medical plans that cover the big stuff. Some plans cover preventive care and accidents before the deductible. There are some plans that cover 100% of your medical expenses after you reach the deductible.
2. A Health Savings Account:
Having a Qualified High Deductible Health Plan qualifies you to open a financial account called an HSA, or health Savings Account. This allows you to deposit money pre-tax in a checking account and pay for medical expenses tax free.
The Pros
Consumer driven plans offer a great solution for individuals who don’t utilize their health benefits much. They are much less expensive than traditional plans, allowing people who don’t over use their plan to save hundreds or thousands of dollars per year. They allow you to control your everyday healthcare costs by creating motivation to negotiate prices, make educated decisions on medical tests, and prescriptions. These plans truly put the control of medical costs back in your court.
With traditional plans, the insurance company keeps your premium whether you use the benefits or not. With these health plans, you only spend your money if you need medical care. If not, you pocket the savings.
The Cons
These plans don’t work well for individuals that utilize their medical benefits often, of have ongoing medical care or expensive prescriptions. More often than not if you need medical care, it will offset the money you would save if you didn’t.
Depending on your medical needs, consumer driven health plans can be a great solution to high health insurance costs. If you don’t utilize your current plan much, and are relatively healthy, learn more about consumer driven health plans.