If you have a job that offers benefits, it’s probably around the time of year where you need to pick your benefits.
Yesterday I talked about how I decided I didn’t need long term disability insurance. Today I want to talk about how I do need Health Insurance, and why I love my High Deductible plan.
Use “Health Insurance Made Easy” To Pick What’s Right For You
I made a spreadsheet last year, Health Insurance Made Easy, to help me pick my insurance plan. It’s free, just like everything else on my website. You just put in the parameters of your choices, determine how much you think you’re going to spend in health care costs, and it’ll tell you which plan is best.
The HIME tells me to get my company’s high deductible health plan (HDHP), which is awesome! Here’s why:
6 Reasons My High Deductible Health Insurance Rocks!
- It has really low premiums (I pay $23 a pay period)
- I’m eligible for a Health Savings Account (which allows me to save money year over year that grows tax free and can be used at any time for health care spending)
- My employer gives me $500 in free money in my HSA.
- I get free preventative care, including an annual physical with bloodwork
- It has a maximum annual out of pocket expense of $5,000. That means a health problem won’t make me go bankrupt!
- I’m down with HDHP (yeah you know me!)
That reminds me of a song. Enjoy!
Kevin McKee is an entrepreneur, IT guru, and personal finance leader. In addition to his writing, Kevin is the head of IT at Buildingstars, Co-Founder of Padmission, and organizer of Laravel STL. He is also the creator of www.contributetoopensource.com. When he’s not working, Kevin enjoys podcasting about movies and spending time with his wife and four children.
I agree with you on this one. High deductible health insurance coupled with a HSA is a good way to go. I have a family so got disability, but we are all relatively healthy so I wanted to go with the HSA to save for my health care costs in a couple decades when Medicare is having financial difficulties.
Ugg… like I said yesterday (I must have read your mind about HDHP), I should have done this a long time ago and now I’m “out” a lot of free money!
I’ll be rectifying that situation immediately!
I’m leaning more in favor of the HSA/HDHP option my company is offering this year as well!
One of my financial concerns is that I hope to retire well before I am 65 and eligible for federal health care. HSA allows me to save tax free money (above and beyond 401K and IRAs) to pay for health care costs down the road even after I leave my employer.
The one drawback is the increased time you’ll need to spend as an HSA user making sure you get the best deals/negotiations on health care.
I really liked the HSA my wife and I had before she changed jobs (her new health care is actually better and less expensive than before). The HSA was extra awesome when you could buy over the counter needs with it, but the government killed that.
Since my old lady lady’s health insurance is awesome (and only $24 a month) with out me and way to expensive to add me I got my own. I didn’t go with the HSA/HDP since I don’t have a employer that gives me free money. My plan is still realitively inexpensive with a reasonable max out of pocket. It does help do be a male under 35 (since insurance companies know we generally don’t go to the docotor…. ever).
For 2011, the end price of health care was nearly identical between the traditional plan and the HDHP plan, and that’s because we were having a baby, so we knew our medical costs were high. The premiums on the traditional were higher but with lower out of pockets, versus low premiums on the HDHP but much higher out of pockets. There was more upside risk on the HDHP so we went traditional. With everybody pretty healthy and no (planned) babies due in 2012, I’m leaning towards the HDHP plan.
I’ve just started researching the HDHP/HSA plan. I do qualify for an HSA as I’m already enrolled in a HDHP, but my company doesn’t offer an HSA option. Any advice on how to go about doing this on my own? Can the company not accept an HSA from a credit union, for example? (Clearly I have some more research to do — any help would be appreciated!)
If you have a HDHP, you are eligible for any HSA. If your company doesn’t provide one, just go to any bank that does and sign up. The only requirement is that you have a HDHP before you sign up and put money in the account.
Good luck!
http://banking.about.com/od/savings/a/hsaproviders.htm
I’m a huge fan of High Deductible Insurance Plans. I think they are the answer to our health insurance problems. However, usually the premiums aren’t that much lower than “regular” health insurance which makes them not a good deal. I’m so glad to hear that you have a good one, hopefully the catch on!
I disagreed with the disability insurance thoughts, but I totally agree with this. High deductible coverage is what you want for everything – health, car, house…
The HSA/HDHP combination is the best deal on healthcare available today to a non-politician. However, during my short (and not very enjoyable) stint as an insurance agent, I found the HSA/HDHP a very tough sell (“What do you mean there is no office visit co-pay? You mean I have to PAY out of MY OWN POCKET for doctor visits??!??”).
I’m very glad to be out of the insurance business. Not only is the sales end of the business the sleaziest thing I’ve ever been up next to, but the customers I dealt with were dumber than a box of rocks (in particular, nearly all of the were profoundly innumerate), which is probably the main reason insurance companies can get away with so much.
I discovered something else about low-deductible health plans over 20 years ago. I wrote an article about that discovery at http://chl-tx.com/2009/09/how-to-get-the-best-deal-on-health-care/ back in 2009.
You cannot have a great blog article without having a video of Naughty by Nature! Great Post… Keep up the good work
I’ve always considered health insurance to be good. But I just can’t trust insurers in Nigeria.