Thursday, March 03, 2011
Guest Post: "Why was that High Deductible Plan so SCARY?" by Matt McCurry
Let’s face it : most of us like security. When it comes to our health I would venture to guess that we all love security. Health, and the lack there of, can be a scary thing , and that’s why I was willing to pay for “peace of mind”. Two years ago I subscribed to the theory that paying the highest insurance premium had to be cheaper than paying the doctor or hospital for their services out of my own pocket. It also gave me the sense of security I was looking for in regard to my family’s health. I was married , we had just had our son , and I knew we would be going to the doctor quite a bit because that’s what infants like to do.
So what changed my our mind? Our wonderful HR department had just sent out the new insurance premiums , and after I picked myself up off the ground I decided that I really need ed to weigh out every option. I read up on this crazy thing called an HSA and found it to be quite intriguing. Not only was it a way for us to save up for medical expenses , but it was also an investment opportunity. What!?! I know - how amazing is that? So after looking at the traditional PPO premium (which I think was around an appendage per pay period ) and the High Deductible Plan premium I decided to dig in and run the numbers.
I won’t bore you with the details but the numbers blew my mind . It was painstakingly obvious that the HDP was the better option. When I came to work that Monday I discussed it with a coworker who had gone through the same exercise that weekend. After we ran the numbers about 50 different ways, and even though it was counterintuitive to everything we had known, I decided that this was our new plan.
Instead of paying money to an insurance company on the front end that would pay my bills IF we had them, it would be better to save that money and pay the higher deductible. By applying the difference between the two premiums into an HSA , in six months we had the funds available to cover the higher deductible. What about those first six months? It can be a concern , but it went by faster than I thought and the funds were in place before I knew it.
This is my experience and I have to say it was one of the best decisions my family has made in regard to our finances. We have been doing this for two years and this year we met the full deductible. At the end of the day we still spent less. I encourage everyone to at least consider the High Deductible Plan ; you might just be surprised.