May 6, 2013


Many opt for high-deductible health plans despite risks (Lisa Zamosky, May 5, 2013, LA Times)

Alice Marie Francis believes it's important to have health insurance, but finding a plan that fit her budget was no easy task. "Money is tight," says the 50-year-old Burbank mother of two, whose children are insured by their father's work-based policy.

To make sure she had coverage that didn't break the bank, she opted for a high-deductible health plan -- an increasingly popular option with lower monthly premiums but high upfront costs before most insurance payments kick in.

High-deductible plans are typically recommended for younger policyholders who are in good health and have less need for doctor visits and prescription drugs, and for people with incomes high enough to cover the cost of routine medical care.

But patients like Francis opt for it anyway, despite the risks. She pays just $123 a month, but if she gets sick she'll have to shell out $3,300 to meet her deductible before insurance helps her pay the bills.

As a result, Francis says she does whatever she can to avoid the doctor. "I ensure that I take very good care of myself," she says. [...]

•Sign up for a health savings account to set aside money for medical expenses. These HSAs are investment accounts that can be opened by anyone enrolled in a qualified health insurance plan. For 2013, a single person can sock away as much as $3,250 annually and a family can set aside as much as $6,450. If you're 55 or older, you're allowed to kick in an additional $1,000 each year.

The money you deposit goes in as a before-tax contribution and, as with a 401(k) account, accumulates tax free from year to year. The money can also be withdrawn tax free as long as it's spent on qualified healthcare costs, such as dental care, doctor and hospital visits, eyeglasses and prescription drugs. Check out IRS Publication 502 for a list of qualified expenses.

•Shop for the best price and negotiate. The prices of medical procedures vary widely from one healthcare provider to another, even among those contracted with the same insurance company. For example, a study conducted last year for Catalyst for Payment Reform, a nonprofit organization working to improve how health services are paid for, found that the price for colonoscopies varied from one provider to another by as much as 1,000%.

For that reason it pays to shop around. 

Posted by at May 6, 2013 6:01 PM

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