Everyone hates them when it comes to their insurance…especially health insurance. In the last decade Texans have seen such drastic increases in both health insurance deductibles and monthly premiums that hardworking Texans feel as if they are left with few choices. These deductibles can be as high as $7,000 for individuals or $15,000 for a family, PER YEAR! And these amounts are not even for High-Deductible Plans that come with additional benefits. The deductible is one thing, but when you couple it with the annual Maximum Out Of Pocket (MOOP), total out of pocket costs can be astronomical if you have a major event creating massive medical costs. In 2023 MOOP Maximums are often over $9,000 for individuals and $18,000 for families. And this doesn't even consider the annual premium that you will pay. This feels like highway robbery rather than a health insurance company taking great care of you. But we have some good news for the folks of Texas. Keep reading to see how you can make these costs irrelevant.
How Did The Average Deductible Get To Here?
Prior to the passage and implementation of Obamacare health insurers had greater flexibility in how they covered your cost of health care. The health insurance company would often not offer coverage to people with pre-existing conditions, limit preventive services, or completely exclude some benefits from their policy base policy. They did this because the insurance companies know that maternity benefits and chronic conditions come with much higher costs of care. These mechanisms of keeping the cost of health insurance down left many Texans uninsured which ultimately led us to passage of the legislation.
The response when the health insurance exchanges were put in place in 2014 led to an increase in monthly premiums and higher deductibles because of the inclusion of the preventive care, pre-existing conditions, and maternity benefits. And while the previously uncovered Texans rejoiced, the subsequent increases in out of pocket maximums has also produced an increase in the blood pressure during annual checkups of many Texans.
What are Texans To Do To Reign Health Costs In?
There are a few things you can do to mitigate high deductibles and out of pocket max on your health insurance plan:
- If you leverage a health insurance plan that is qualified as a High-Deductible Plan, you should open a health savings account (HSA). An HSA, coupled with HSA-qualified high-deductible plans, is a tax-advantaged savings account that can be used to pay for qualified medical expenses. Contributions to an HSA are tax-deductible, and earnings grow tax-free. Funds in an HSA can be used to pay for any qualified medical expense, regardless of whether the expense is covered by your health insurance. To find an HSA qualified health plan, click HERE.
- Consider a health reimbursement arrangement (HRA). An HRA is a type of employer-sponsored health plan that allows you to set aside money on a pre-tax basis to pay for qualified medical expenses. HRAs are similar to HSAs, but they are funded by your employer, not by you. Business owners love them because they offer a great benefit to employees in this competitive labor environment.
- Consider obtaining catastrophic coverage rather than a traditional HMO or PPO individual plan. Catastrophic coverage is there for when you have big events and are not involved in your day to day visits to a doctor. When you pay cash for a trip to your primary care physician, you don't have to worry about network coverage for that medical service. Catastrophic plans often are significantly cheaper than many major health insurance plans which can put extra money back in your pocket. This extra money can easily cover your healthcare costs if you are a low utilizer of medical care. These plans are typically not high-deductible plans which is also a win if a major health event does occur.
Two Fixes For HUGE Annual Deductibles
Limited Benefit health plans get a bad wrap because people misuse them. People see low premiums and don't understand that they are not buying a major health plan. This leads to healthcare costs not being covered by their insurance companies! However, if you pair a limited health benefit plan with your traditional health insurance plan selection, you can use it to cover up that HUGE annual deductible with a little extra money out of your pocket.
The other thing that people don’t think of is purchasing ancillary catastrophic coverage. While folks are keeping their health insurance premiums as low as possible by purchasing a high deductible health plan, they can purchase a catastrophic plan that will have an inexpensive premium that will take care of most your high deductible and out of pocket requirements and even help with emergencies and critical illnesses.
Using one of these two items for healthcare costs is much less expensive than coming up with thousands of dollars for out of pocket expenses…each year! That can make your healthcare affordable health care.
How To Take Action For Affordable Health Care
Even though high deductible health plans have become popular, they may not be the best option for everyone. Did you know that 55.7% of American private-sector workers were enrolled in high-deductible health plans (HDHPs) in 2021 — the highest on record and the eighth straight yearly increase? That rate is up 5.3% from 2020, 14.5% from 2017 and 83.7% from the low in 2013. If you have a chronic health condition or if you expect to need expensive medical care in the near future, you may want to consider a traditional health insurance plan with a lower deductible even if it has a higher cost per month for health insurance. Understanding the total cost per year and what money that you have at risk is the key to making a personal health insurance plan selection.
Working with an independent insurance agent at Insurance For Texans will help you determine if your health insurance plan selection is actually affordable health care or a trap. Click the button below to start the process of finding the right health plan for you and your family.