The
secret to saving money on your Florida health insurance and beating
the hell out of the insurance companies is buying a very high deductible
health insurance plan.
That's it. That is all
there is to it. Now I am going to prove it to you.
Let us start with our
model family. We will use a male of 40, female of 35 and two kids,
10 and 8 years of age. Everyone is healthy and nobody smokes. Although,
the 8 year old enjoys a good Cuban cigar every now and then. We
will give them an Orange County zip code of 32827.
I don't update this page
too often, but the principles expressed here are always valid.
Old School
Plan 1 which we will
call the "Old Plan" is a typical PPO plan with a $35 doctor
copay, $20 copay for generic Rx, a $250 deductible for brand name
drugs and then they are a $50 copay. The deductible is $1,250 and
the coinsurance is 20% of $15,000. This is actually a Golden Rule
Copay 35 plan. We sell a lot of them. (This plan is no longer sold
but again, the numbers and lesson is still valid)
The cost of this plan
is about $460 a month.
The plan will not cover
preexisting conditions. You have to spend $250 per person before
a brand name drug is covered and then it still costs $50. If you
are hospitalized or need major treatment, there is an out of pocket
expense of $4,250. Keep in mind that in the world of private health
insurance, this is a pretty good plan.
What I often hear is
".I might as well save the money in the bank and insure myself."
While I do not think that is a wise idea, it is on the right track.
You might be able to self insure for a large part of your expenses
and then have something that will kick in for the very large claims.
How would that work out?
New
School
There are two
methods we can use.
First, let us
take a look at using an Heath Savings Account (HSA) plan.
Our typical
family can buy a plan with a $5250 deductible. This is one deductible
for the whole family. Nothing is covered until they reach this deductible
with the exception of their children's well care visits. Those visits
are free under Florida law with this plan.
The premium
for the plan is $268 a month. This is $192 a month cheaper or about
$2300 a year. So, my smart shopper buys this plan and puts the $192
a month into the HSA's savings account. Uncle Sam lets them take
the $192 contribution off of their taxes. They are in the 20% tax
bracket (hey, not everyone is rich) and they save about $38.40 a
month or $460 a year on taxes. Plus, the account balance was earning
5% interest as well.
Chances are
the family will spend less than $500 on medical expenses. Over a
few years they will have saved up more than their deductible and
will have no exposure for a catastrophe.
They have
seen the light.
Kick
it up a notch
Why stop there,
we can go a step further. One smart lady said that she would have
no problem putting aside money for a rainy day. She wants a really
high deductible plan.
Same family
as before but this time we are using a $10,000 deductible, 50% of
$8,000 plan. The maximum out of pocket is $14,000 per person. The
plan costs $140 a month. This is $320 a month cheaper or about $3840
a year. This is not an HSA plan. It is a conventional PPO plan with
5 million dollars worth of coverage.
The family is
betting on not spending more than $500 a year and saving the difference.
After a four or five years they have enough saved to cover deductibles
and coinsurance. They continue for many more years enjoying rock
bottom health insurance rates while everyone else is screaming over
their increases.
Not
for everyone
I know that
many, perhaps most of you will not opt for these types of arrangements.
It makes a lot of sense if you can save the money or if you have
the resources to pay off the higher deductible.
There
are a lot of better things you can do with your money than give
it to an insurance company.
If you want
a quote for plans of this type to see how much you can save, give
me a call.
800
- 986-4786
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