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I have a theoretical situation here. Say someone has a pre-existing condition that doesn't need much treatment other than meds and routine office visits (like high BP, asthma, etc) and the only insurance coverage they can obtain is one with very high deductible, say a PPO with a $5,000 deductible.
Wouldn't it still be in this person's best interest to get the insurance, even though, the insurance may never end up paying anything in a calendar year? Even though the patient would have to pay out of pocket for the bills, they'd end up paying these bills at the much reduced rates contracted by their insurance company.
Yes, certainly! For example my wife has Diverticulosis and periodically has had to take antibiotics for this condition when she had a flare-up. She had an attack and ended up being hospitalized for 5 days, total 66K+ hospital alone. After visiting her doctor, it was highly recommended for her to have surgery. This resulted in 16" of her colon removed and an additional 81K+ hospital bill. Another example, I had my Thyroid removed, 22 hours in the hospital on outpatient for 33.6K. Any hospital bill can be a real killer and one would be wise to protect themselves from the outrageous bills these hospitals come up with.
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High deductible plans actually get back to the concept of health insurance as protection for catastrophic injuries and illnesses. We pay dearly in premiums for first dollar coverage of outpatient services.
They can be combined with Health Savings Acccounts for some tax benefits, too.
Typically with a PPO plan you would have a co-pay for office visits so that helps keep your costs down. If you are talking about a tax qualified high deductible plan, used in conjunction with a Health Savings Account, HSA, those plans tend to have lower premiums and with the tax savings for putting money into the HSA, come out as one of the least expensive options most of the time. Say you have $2500 in medical expenses that you run through your HSA. If you are in the 28% tax bracket, you are looking at a reduction in income tax of almost $1100/year. Figure your reduced premium costs and the difference in premium and the tax savings almost covers your costs.
Here is an example of something my friend dealt with: She didn't have insurance last year and she had to have some blood work done. She got a blood draw and had about 15 different tests done. Total cost from the lab was $2200 for cash payers. They gave her a 30% discount, so she ended up paying about $1500 out of pocket.
She got insurance with a high deductible a few months later due to Obamacare. She has a $1500 deductible. Same labs drawn and same charges. Yet this time they went through her insurance company. Her insurance had contracted rates and sent her the bills to be paid since they were below her deductible. She ended up paying the lab about $300 at the contracted rate. She saved about $1200. Even though her insurance company didn't pay anything, she benefited since she only had to pay at the contracted rate.
High deductible plans actually get back to the concept of health insurance as protection for catastrophic injuries and illnesses. ... They can be combined with Health Savings Acccounts for some tax benefits, too.
That's the theory and I'd love to see it... but actual HD insurance doesn't really exist anymore.
A side effect of ACA is that. **EVERY** policy must provide for other care and services.
Even if you don't need or want them.
That's the theory and I'd love to see it... but actual HD insurance doesn't really exist anymore.
A side effect of ACA is that. **EVERY** policy must provide for other care and services.
Even if you don't need or want them.
I had "high deductible" with HSA for a while. If we put $200 in the HSA my employer put in $800 per year.
BUT when we went for a "well check" it was covered at 100% very odd.
Also - if you have any lapse in coverage, under the old rules (not sure about the new rules) it would make any pre-existing conditions be exempt for a time period. I think ACA removes that.
But anyway - it was a very good reason not to ever let coverage lapse.
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