High Deductible Health Plan. How does that sound? Does the word “high” seem a bit off-putting? If it does, you are not alone.
Economist Benjamin R. Handel found that when offered the choice between a high deductible and low deductible health plan, most Americans choose the low deductible. At first glance, “low deductible” sounds more appealing, right? Many people believe that the coverage on low deductible plans kicks in sooner. However, as inviting as “low deductible” may sound, it is important to remember that low deductible health plans go hand-in-hand with high premiums. When you pay your deductible, you are paying for healthcare that you actually receive, but when you pay for premiums, you are paying for “what-if” costs: “What if I go to the ER? What if I catch the Bubonic plague? I’d better fork out a bunch of money each month, so I know I’ll be covered in case something happens.” But how often do you actually go to the doctor? Does it really make sense to pay high premiums when you go to the doctor’s office twice a year? What if you were to pay for what you needed and kept what you didn’t spend? According to The New York Times,
“Economists have a term for a situation like this, where one option is better than another under any circumstances, dominance. And that is what we see in many workplaces: The cheaper healthcare plan, at every level of medical spending, often has a higher deductible.”
Even though the evidence points to high deductible plans being more advantageous, we understand that they can still be intimidating. There are two main things that can help you take full advantage of your high deductible plan:
- Understand your health insurance benefits.
- Maximize your health savings account (HSA).
Fortunately, MotivHealth has taken your insurance education into our own hands. You don’t have to worry about probing Google to try and understand how your health plan works and how to maximize your HSA. In fact, we’ve done that work for you! You can simply complete our MotivU courses. (And if learning all about insurance so you can maximize your benefits isn’t incentivizing enough, just know that we pay you to complete the courses!)
Here is a little sneak peak of what you’d learn in MotivU:
With an HSA-based plan, you often pay a lower premium in return for having a higher deductible. The key difference is that an HSA-based plan has two parts: Insurance coverage PLUS a health savings account. Your HSA is a personal tax-free health savings account that can be used to pay for eligible medical expenses. Usage of your HSA funds may also count toward your deductible and coinsurance amounts. And remember, like any other insurance plan, you pay nothing for preventative care like annual checkups.
Just like a co-pay plan, in an HSA-based plan, you would still have a deductible, co-insurance and an out-of-pocket maximum.
And if you really don’t like reading, don’t worry—each MotivU course can be completed by watching quick, compelling videos.
Click here to access MotivU.
Making the Most of Your HDHP by Maximizing Your HSA
High deductible health plans work best when partnered with an HSA. So, to get the most out of your high deductible plan, you need to make sure you are maximizing your HSA. There are three main ways to maximize your HSA:
- Contribute the annual limit to your HSA each year (or at least as close as you can). The annual HSA contribution limits for 2022 are $3,650 for individuals and $7,300 for families.
- Leave your HSA funds untouched as much as possible so that your savings can grow quickly and you’ll have the funds when you really need them, like in the case of an emergency. Though HSAs can be used to buy things like vitamins and band-aids, it’s usually better to save the funds for large, unexpected medical expenses.
- Invest your HSA funds! They grow tax free! Learn more about investing here.
To learn more in depth about maximizing your HSA, check out this video.
We hope the educational resources we provide can improve your understanding of high deductible health plans and how to maximize your HSA. And don’t forget, we contribute $50 to your HSA upon the completion of MotivU courses, taking you one step closer to maximization. The New York Times says it best:
“Because of human quirks, lack of understanding, and overly complicated plans, many people are paying more without getting anything extra in return.”
MotivHealth is here to make sure our members never fall into that category.