The High-Deductible Plan – The Most Affordable Health Plan they Offer you at some Companies Today

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The last time at work that they had an enrollment session on for benefits, you could have heard a lot of bandying about of the expression consumer-directed health plan. Did you ever wonder what that meant? It’s not really that they are directing a lot of great health at you, the consumer.

It is that you the consumer, are being tapped to let the employer off the hook as far as possible, by accepting an incentive for it, and opting for a different consumer directed plan. It’s not always that they give you a clear choice. They just tell you you have no other choice – like General Electric did. Another name for this kind of plan, is a high-deductible health insurance plan. What that means is, that there’s a big deductible once a year, something like a couple thousand dollars for a family; but the trade is that your monthly premium is quite affordable. And there is a tax benefit you can claim, come tax time. Is this really an affordable health plan?

Here’s how this system works. If we happen to be getting our health care on our own dime, we aren’t going to be allowing every useless test that they think of at the hospital. You will ask a lot of questions, to try to be as economical and efficient as possible with the tests and procedures – until you run through the high annual deductible, that’ll be your money. A plan like this will save your employer 20%, and so, they’re enthusiastic about it. And you can also make use of a health savings account, that helps you set aside tax-free health contingency funds, up to about $6000 per family. And the tax break can be quite substantial too. Any health savings you do not use in one year, can rollover to the next, and also to another company should you change jobs. But this is not the only affordable health plan that companies on a tight budget offer you.

There is a Health Reimbursement Arrangement too. And this is something that you typically get with small companies. Your company sets aside a certain budget for each employee, and it is their call, if they will give you any interest on the money set aside for your needs, and they will let the money roll over year on year. So which is best, or rather, which is better? If you are young and healthy, with no diabetes or anything, the high deductible plan makes a lot of sense. And if you have something like it, then either plan could make sense, depending on the specifics.

You’ll just need to ask yourself a few tough questions. Which plan, gives you access to the hospitals and doctors you need? You’ll also want to make up your mind how much you can afford to contribute. If you feel cash-strapped, the high deductible plan saves you enough money on the premiums to make a difference. But none of these options makes any sense unless you have a lot of money to spend on your health. You could quickly find yourself owing a lot of money should something happen and you don’t have enough for your high deductibles. But that just happens to be a reality of today’s health scene.

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