Most people look for a cheaper policy when they find out that their family's health insurance is going to cost more. A combination of an insurance plan and a tax-sheltered Health Savings Account is often the best way to go.
America's Health Insurance Plans, an industry group based in Washington, says that since the programme started in late 2003, more than 1 million Americans have signed up for high-deductible health insurance plans and the HSAs that go with them.
The new plans are a bit complicated, but more and more insurance companies are starting to offer them.
Federal law says that the policy must have a minimum deductible of $1,000 per year for an individual and $2,000 per year for a family. The maximum out-of-pocket costs, such as copayments for surgery, cannot be more than $5,100 for an individual and $10,200 for a family.
People help pay for their own health care.
HSAs, on the other hand, can be set up by policyholders and paid for with their own money. Employers can also put money into the HSAs of their workers. The best way to use HSA contributions, which are usually equal to the policy's deductible, is to pay for health care costs. Any money left over at the end of the year can be used for the next year. This is different from Flexible Spending Accounts offered by an employer, which are health care savings plans where any money not used by December 31 of each year is lost.
Some companies are replacing catastrophic health coverage plans with the new plans because they think HSAs are a good way for workers to handle the higher deductibles. Others see them as a way to make workers more aware of how much they spend on health care.
Health insurance for young people who don't have it
The new plans are especially appealing to young people who are single, people who are in good health, and people with higher incomes who can pay for higher out-of-pocket costs.
The new policies are also good for small businesses and people who don't have health insurance. More than 40% of the new policies bought through eHealthInsurance were bought by people with annual incomes of less than $50,000. Almost half of the new policies were bought by families, and more than one-third of the buyers had not had health insurance before.
Health insurance that is cheap
It's how cheap it is. Participants pay less for their premiums, and the money they would have spent can be put into a savings account and used to pay for day-to-day medical care.
More companies will use the plans because the trend is for employees to take on more of the cost of health benefits.
On the other hand, people who can afford to put money into their HSAs and don't need to use them all to pay for their annual medical costs can let them grow tax-free. When you retire, you can use your extra savings to buy long-term care insurance and pay for other qualified medical costs.
That means that people who are getting close to retirement age are more likely to use them, especially if they don't have company plans.
There are many options for health insurance, so it's important for people to figure out what they need.
