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another love/hate relationship . . .

November 14, 2007

high deductible health plans seem to be all the chatter the last few days.

a “traditional” health plan has:

  • a premium of $300-$400 a month
  • a copay or coinsurance of $20-$40 a doctor visit
  • a copay of $10-$40 per prescription medication

this traditional plan can cost the average employee $4500 a year.

a high deductible health plan has:

  • a premium of $35-$55 a month
  • a deductible of $1000-3,000 per year
  • no copays
  • 100% coverage and no deductible for preventative care
  • no copays

this high deductible plan will cost the employee $2500 a year.

my employer offers a high deductible health plan “hdhp” or several “traditional” plans to choose from, and i opted in. not only is my premium ridiculously low, but my employer gives me the money this plan saves them. the money they give me is about $75 a month, and it is deposited into a health savings account “hsa,” a pre-tax, untaxed interest bearing savings account in my name, that is mine to use for my health care expenses. i also deposit pre-tax contributions from my wages. any money in this account i do not spend this year is still available to me in future years. i can use the money for an emergency room visit, or cough drops from the supermarket, or eye-glasses, or dentistry.

i calculated the money i will save this year even if i have to pay out the entire $2000 deductible. i am saving at least $1500, add the $900 my employer is giving me over the year for choosing this plan and i have saved at least $2400. if i do not need to pay out the entire deductible i have saved even more.

my spouse’s employer also offers a similar plan, we calculated that if she opts for the hdhp over the hmo plan she will save about $1300, even if she spends the out of pocket maximum.

five years ago these types of plans did not exist, now, they are the only health insurance option offered by 5% of american employers, according to reuters in 2008 this will increase to 9% . one of my favorate coporations (if one can have a favorite): whole foods, only offers hdhp’s to their employees, and most of the employee feedback is positive.

so, now you ask “where is the ‘hate’ in this ‘love/hate’ relationship??”

opting for an hdhp requires the the employee plan ahead, think about how much money they may spend in the coming year and save that money. this also requires that the human resources department offering the plan understands how the plan works well enough to explain it to the employee. most people really do not understand the traditional health plans they have worked with for many years, how are these people supposed to understand this plan well enough to make it work for them, and not against them??

another downside: if the hdhp takes effect on the first of the year, and the employee gets very sick and hospitalized on january 2nd, they have to pay out the entire deductible in one lump sum. most working americans are not able to handle couple thousand dollar blow all at once.

but wait, there’s more . . .

i work in a medical office, with a solo physician. as if this was not bad enough. if hdhp plan are being utilized by employers with employees who do not understand the plan, or are not able to pay a high deductible, we are so screwed.

the medical profession is steps away from financial ruin all across america, it is bad enough that we have to depend on payments from insurance companies . . . now we have to convince patients that the debts they have with us are important enough to us for them to actually pay, more important than the patient’s car loan payment, credit card payment, housing payment, even utility payment. how am i supposed to explain to a person that paying me $55 for the doctor to treat their infection 25 days ago is more important than spending that $55 on anything else they may want or need?? how? should i actually tell the patient that if they do not pay that $55 we are not able to pay one of our employees for 4 hours?

what i’m saying is . . .

the hdhp is going to work really great for me and my family only because i understand how to use it and how it works, i know what to expect.

but, as a medical professional i am getting the short end of the stick, and that stick is pointed right at my butt.

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