Earlier this year, I shared about the company that my husband was working for had switched insurance companies and went to a High Deductible Health Plan (HDHP) which basically meant that our deductibles had more than quadrupled.
We researched different options but since we were only given a few days to decide, we just ended up going with the insurance company that they were providing.
Then our daughter, at two months old ended up in the hospital which ended up being way more costly than we had anticipated and set us back months on reaching our financial goals for this year.
Now in case you don’t know what a HDHP is, it’s a health care plan with a deductible of a $1,000 or more. The benefit to this plan is that the premiums are lower – which means that your monthly payment is cheaper, but if a medical emergency happens (like what happened with our daughter) you could potentially be stuck with a high medical bill.
Not to mention, depending on how much of the bill your insurance provider is willing to cover, may mean you will owe additional money on top of having to meet the deductible.
Did I just confuse you?
It’s confusing, so don’t feel bad if you don’t understand everything. In fact, according to the 2016 Aflac Open Enrollment Survey, “more than half (56%) of millennials say there are aspects they don’t understand about their overall health care policy, including elements like deductibles, copays or in-network providers”.
So, let’s try to break this down a little…
If you have an 80/20 plan, that means after you have met your deductible, your insurance provider will cover 80% of the bill and you’ll be responsible for 20%. This is AFTER you’ve met your deductible so you’ll still have to meet whatever your deductible is for that year before this kicks in.
Let’s be real for a moment – when our daughter was in the hospital, we were actively saving up our emergency fund (goal was $10,500) which meant that account wasn’t fully funded yet. So when we got the nearly $9,000 bill in the mail we didn’t have enough in savings to even pay for it in full if we had wanted to.
And if you know me in real life, you know that I don’t believe you should wipe out your savings to pay off a medical bill. Instead, I believe that you should negotiate a payment plan and pay it off as fast as you can like any other debt.
Another Option
Okay, so even if the only insurance option available with your employer is a HDHP, you may still have another option on the table…
It’s called Voluntary Insurance.
Voluntary insurance works hand in hand with major medical plans to help ensure individuals who are sick or hurt have the funds needed to pay health-related costs their primary insurance might not cover, as well as other out-of-pocket costs. After all, when a medical event occurs, there are things like deductibles, copayments and treatment costs that may not be covered to consider.
Why is voluntary insurance worth considering?
Voluntary insurance pays cash when you’re sick or hurt so you can focus on recovery, not financial stress. Major medical policies pay doctors and hospitals, but voluntary policies pay cash directly to you, the insured (unless otherwise assigned), which means you get decide how the cash is used.
This can be a great benefit if you feel that your current plan may not be enough to protect you from a high medical bill. I know this is something that I wish we had considered earlier this year as it could have saved us thousands, but the choice is totally up to you and what works best for your budget.
So, spend some time researching benefits options to help ensure you make the best health care and financial decisions for yourself and your family this open enrollment period. Don’t forget to utilize the resources available through your employer since many workplaces offer the option to speak with a benefits expert about your specific needs and provide online portals to compare plans.
If you have a HDHP how have you managed an event where you were responsible for a large medical bill?
Aflac herein means American Family Life Assurance Company of Columbus and American Family Life Assurance Company of New York.
Z161128G 10/16
I was selected for this opportunity as a member of CLEVER and the content and opinions expressed here are all my own.
My husband’s employer doesn’t offer a HDHP, but we’re very happy with the coverage we have. It’s expensive, but includes a great choice of providers and very affordable copays. We’ve been lucky, though, and haven’t needed anything but routine care for several years.
Well, ideally over time you build up a big enough balance that you could handle a big cost. The problem is that this often depends on being relatively healthy and not having a lot of health expense for the time frame in which you’re building up that fund.
Holy cow! If we added up all the money we’ve spent on health care in the 20 years I’ve been in Australia, we’d still have several thousand dollars worth of change from $9,000. Facing a huge hospital bill like that is the last thing you want to worry about when your little baby is sick in hospital. I’m so sorry you had to go through that.
We have an HDHP plan and have for a few years and so far we have been lucky to not have been hit with a bill too high that we could not use the funds in our HSA to cover it within a month or two. Sometimes I really do get nervous thinking about a major hospital stay or what not, especially now that we have kids, but I like having the HSA to pay out of pocket costs and not having to try and estimate how much I will need for the year.
Since I stopped working insurance has been a huge hurdle. For the “best” insurance through hubbs work its more than $1200 a month … The past few years me and the boys have qualified for the tax credit through the affodable care act. For 2017 we do not qualify nor can we afford the crappiest insurance through hubbs work. Currently me and the boys will not have any health insurance in 2017. Terrifying!!!
Almost 2 weeks ago we had to take our 2 year old to the ER for 4 stitches to his lip. I got an email today saying we have a new statement … We now owe $759 and thats with alright insurance. Merry Christmas :/ Health insurance has been a huge non stop headache for me.
Oh no Meg! Have y’all looked into one of the healthcare sharing ministries? I can talk more about them with at a playdate if you like because that’s what we’re now using. It’ll at least keep you from being penalized (unless that ends up changing next year) and may give you some peace of mind. The big companies pulled out of ACA here in GA so that’s why there’s no decent insurance policies through the open market anymore. :-/
As someone who works in the Health Insurance Industry here are some tips to consider after you have enrolled in your health plan.
1. Make sure you choose an In-Network Provider (primary or specialist)
With your insurance co. generally your out of pocket costs will be lower you may still have to pay a deductible or coinsurance or co-pay but is Lowe than going to an Out of Network provider.
2. Know your benefits I cannot stress this enough! Read your benefit plan and find out what is covered and not covered this will save you the headache of getting a surprise bill does not leave it up to your doctor to know your benefits. Call your health insurance Insurance co if you have any questions.
3. Review your Explanation of Benefits (EOB) if you read something you don’t feel is correct CALL customer services it may be able to be adjusted or you can file an appeal know your right s Yes providers & even insurance companies make mistakes!
I hope you will find these tips helpful!
I enjoy reading your Blog!
I signed my family up for AFLAC cancer policy at the age of 40 because it was very cheap, my husband was a heavy smoker and his several of his family members had died from cancer. I knew I could cancel at any time and we could afford it, so not much risk. 4 months later, I was diagnosed with stage 2 breast cancer. I have had this policy for 7 years and to date, it has paid out over $50,000 and is continuing to pay. It’s the easiest insurance company I have ever worked with. Thank God for putting me in the right place at the right time to Be able to sign up for that policy.