If you've been paying any amount of attention over the last decade, you've noticed that the annual deductible on your health insurance has been rising like the Texas sun on a blazing July day. And much like the heat of the day, health deductibles feel like an unmanageable hazard for those working outside. The steady rise in medical costs and higher individual deductibles is making it difficult for people to afford the medical care they need. Just a few years ago, a $1,500 deductible was considered high. Now, it's not uncommon to see deductibles of $7,000 or more and out of pocket costs beyond that deductible are even higher! Do you happen to have $7,000 or more just sitting around, ready to offset your yearly deductible requirements? What about your family deductible which could approach $20K per year?! Yeah, most of us don't either.
We understand that this can be a huge financial burden for Texas families, especially if you have a chronic illness or need to see a specialist. Even a minor illness can be expensive if you have to pay your deductible out-of-pocket. And what if the kiddos playing sports need a trip to the emergency room where costs average around $1300 per visit. And since many Texas health plans require you to meet your deductible before it will help offset emergency medical care costs, your out of pocket expenses can escalate quickly. What can a Texas family do?
There are three key ways to reduce or eliminate your health deductibles altogether. Depending upon your insurance company and preferred health care providers we find that at least one of the three mechanisms listed below can help you accomplish the goal of reducing health care costs whether you have an average deductible or a much higher deductible. The ultimate goal is to limit your out of pocket maximums when using medical services throughout your plan year. Let's take a look at what health insurance coverage options are available so that you can make an informed decision during your annual enrollment period.
One option is to switch to a high-deductible plan (HDHP) paired with a health savings account (HSA). With a high-deductible plan, your monthly premium will be lower. The downside is that you'll have a higher deductible if you have to use your coverage. Wait! I thought we were trying to eliminate the deductible!
Since you can contribute money to your HSA tax-free AND can use those funds to pay for qualified medical expenses which include your deductible, you can end up not having out of pocket costs as you seek medical treatment. The best news is that if you don't have to seek care outside of your preventive care, the money that you are socking away in your health savings account can grow tax free and subsequently be used later. The maximum contribution in 2023 was $7,300 for a family which is $20 per day. Not a bad way to cover up your expenses if you do end up approaching those out of pocket limits. And if you don't need to use the HSA funds, you can roll it over and let it accumulate interest or gains from investments unlike your flexible spending account that are typically offered by employer based plans.
Another way to eliminate your health deductibles is to purchase a supplemental health insurance plan. We see these limited benefit plans stepping up where your employer-paid or individual plans leave you in a cash crunch with large out of pocket limits. These limited benefit health insurance policies have defined reimbursement cash amounts when specific covered health care services are rendered, and are also known as indemnity plans. Since they provide cash into your pocket for even things like Preventive Services and ER Bills, you will see the benefits immediately unlike back billed traditional health plans. The monthly premiums for these health care plans can be inexpensive depending upon underwriting and how much coverage that you desire. But their flexibility in reducing healthcare expenses is unrivaled by other health care policies and are ideal in a health reimbursement arrangement that some employers have embraced. But these plans should truly be treated as supplemental policies rather than true health insurance coverage.
Finally, you may be able to eliminate or minimize your health deductibles through employer based plans that are either no deductible or low deductible. While these options are increasingly rare, they do still exist. Since most employers are trying to cut costs just like you and I, the monthly expenses on these plans make them problematic at best. If your employer offers this for family coverage and your income allows this to be an option, it is definitely a great choice for people who do not prefer out of pocket maximums or high-deductible health plans.
If you're looking for ways to eliminate your health deductibles or reduce your out of pocket limits, we recommend talking to your independent health insurance advisor. At Insurance for Texans, we have years of experience in the health insurance field and a myriad of options to help you achieve your goals of coverage. We are not a health insurer…we are health insurance advocates for all Texans. Our dogged passion is to find solutions that provide value to you while keeping you covered when the storms of life come your way. We sit on the same side of the table as you, the client, and have the big health insurance companies sit on the other side. We advise, admonish, advocate for you.
Let’s start a conversation and see what “holes” you have in your coverage and try to fill those gaps with plans that cost very little per day. How much is peace of mind worth to you? How about a few dollars a day! Click the button below and let us see how we can help put money back in your pocket where your health care expenses are concerned.