LPT Request - Health Insurance Noob

Submitted by AbstractTechnica t3_yhjrka in LifeProTips

I feel so uneducated about health insurance but have been doing some research and self-education. I'm trying to save money but still want protection / peace of mind for my family. I'm hoping those with experience can confirm that my idea below is a good idea:

Find a health insurance plan with a low monthly premium but high deductible. I know that I'll have to pay for most (all) of our medical expenses because it will never exceed the deductible but my understanding is that the health insurance plan will get us significant discounts that we wouldn't otherwise get without them.

To pay for these medical expenses, I'm thinking that depositing to a HSA is the best move. If I understand correctly, I'll save money on taxes while also building an emergency fund for medical expenses.

Can someone confirm this is the best way to save money but have protection? I'd also appreciate tips on how to find that type of health insurance plan and suggestions on HSA as well.

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keepthetips t1_iue3hzb wrote

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Far-Two8659 t1_iue4k6l wrote

High deductible plans can be great, but be wary. You need to feel comfortable that if you had to pay that entire deductible PLUS coinsurance (your out-of-pocket max) because of a single emergency, you'd be able to.

The other thing you need to be very concerned about is the actual coverage. Not every insurance plan covers the same things. I've seen plans that cover emergency room visits (after deductible) but not ambulance rides. Just know what yours will cover.

Also, in-network vs out-of-network can be a backbreaker.

HSAs are also great, but you can only use them for medical expenses, so just be aware of that. If you overfund it you can't just take money out without a tax penalty.

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PrisonerV t1_iue4n6u wrote

I'm finding that the lowest level of my company's "insurance" doesn't pay for shit.

They want you to meet the deductible ($2500 or $5000) before they even start doing 80/20.

And my lowest cost dental? It only covers cleanings. Might as well pay for that with cash and save the money.

So you really need to look what they cover OP. You're better off with an 80/20 plan with a high monthly rate than a 0 plan with a low monthly rate. Unless everybody in your family is like super healthy and never has accidents. But even then I would pour money into and HSA as one accident or diagnosis will drain your bank account.

US health insurance sucks ass. Thanks a lot Republicans!

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LeeAnnLongsocks t1_iue8c1p wrote

Oh man, shopping for health insurance is a PITA because there are so many factors to look at. I can tell you what I do, but that doesn't mean it's the right thing. In a way, going for a low premium can save you money because no matter what, that money is gone once it's spent because it doesn't go toward deductible or OOPM (out of pocket max). I usually put a heavy weight towards the OOPM, because if things go bad, that's all you pay, assuming all your procedures are in-network. I also usually put a strong emphasis on co-pays for doctors and meds. I'd rather have a fixed amount for something like that instead of having to pay a percentage for everything which doesn't even kick in until after the deductible has been paid. Have you checked out the cost of medications? Very expensive. Having my my docs and meds covered is a must-have when chooing my plan. Also check and make sure your local hospital is covered under the plan you're contemplating. (I had Optima a few years ago and found out later that they didn't cover anything from one of my local hospitals. That was totally not acceptable. Luckily there are two hospitals where I live and the other one was covered. Nevertheless, I'll never go back to Optima.) I did the HSA thing a few years ago and wish I hadn't. (I was mistakenly under the impression that you had to have a HSA account to be considered for a HSA compatible plan which was the one I wanted.) However, if you are not good at saving money and keeping your hands off of it, it's probably a good thing to have a HSA because you have to use it for medical stuff. If you do open a HSA account I would suggest staying away from Fidelity. They have good ratings and I like their website for my account. What is bad about them, in my opinion, is that they don't send out the applicable year-end tax statement until mid-late May, which is after the IRS tax filing deadline. That causes all kinds of issues as far as I'm concerned.

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Mrs_Weaver t1_iuenqvg wrote

Replying to Far-Two8659 (#349,515)

>HSAs are also great, but you can only use them for medical expenses, so just be aware of that. If you overfund it you can't just take money out without a tax penalty.

This is true, but you don't have any time limit for using that money, the way an FSA works. At my previous job, I had an HSA account with my high deductible plan. The company threw money in there, and I did, too, so it ended up with a few $thousand in it. I'm not at that job any more, but I'm still using that money to pay for copays, glasses, dental visits, prescriptions. And after 65, you can take the money out for anything. You pay taxes on that if it's not medical, but it's still an option.

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