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 Posted: Thu Apr 23, 2009 3:20 pm Post subject: |
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| Ed, you are asking an excellent question. I understand what you are asking. Unfortunately, my expertise is life, DI, and LTCi, and I farm our my health insurance. I would like to know the answer to your question. Hopefully, there is a reasonable explanation other than, "They charge more because they can." |
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InsuranceExpert
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| Posted: Mon Feb 28, 2011 9:32 pm Post subject: max out of pocket |
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Family Max Out of Pocket: $4500 vs Family Max Out of Pocket: $5200
Keep in mind that one of the most important factors for premium is the max out of pocket. Read your benefit descriptions carefully. Some literature will name the out of pocket maximum including the deductible, some will not include the deductible. Typically the HSA's have a lower out of pocket maximum 0% co-insurance than the equivalent co-pay plan. For example both plans may have a deductible of $5000, and the HSA has a higher premium because the copay plan has 80/20 co-insurance after the deductible. A common out of pocket maximum is 4500 on top of a 5000 deductible. Your exposure will be higher when you pay lower premiums. You get what you pay for with insurance, it always balances out, pay it now or pay it later. I hope that helps.
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colorado
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| Posted: Sat Mar 05, 2011 2:05 pm Post subject: |
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| Oregon? that's why God created Ehealthinsurance.com....lol |
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FlHealthGuy
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| Posted: Mon Mar 14, 2011 9:28 pm Post subject: |
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I have same question and called the insurance company for an explanation.
I was comparing 2 plans each had same coverages with 10,000 deductible and 25% co-pay.
The explanation seemed reasonable enough. Here is what I was told:
The HSA eligible account has a Max "out of pocket" expense of 30,000 per family. The non-"HSA Eligible" ploicy has a max "out of pocket of 10,000 per individual.
It is more likely with a "Catastrophic policy" that 1 individual will reach the 30,000 limit than that 3 individuals will each reach a 10,000 limit. Also, the holder of an HSA is more likely to spend money going to the Doctor than someone who doesn't already have the cash saved. So, from an insurance company's perspective, a policy with a 30,000 deductible (per family) is more likely to cost them money than the non HSA plan with a 10,000 deductible - per individual).
What they charge for coverage is directly related to what they expect to eventually have to pay out...
I think this was probably over-simplified. But it sort of made sense while it was being explained...
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movingmars
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| Posted: Thu May 12, 2011 6:12 pm Post subject: Doublespeak |
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By my reasoning, what the the insurance company told movingmars makes no sense whatsoever.
It is more likely they will have to pay on the non-HSA 10,000 per individual than a 30,000 shared deductible.
Furthermore, what does it matter if someone is more or less likely to go to the doctor if they have the cash saved. In either case the insurance company is paying for nothing.
There seems only one explanation for the higher cost of HSA plans, they do it because they can.
These are for-profit companies now making record profits. 20-30% of every dollar you send them goes to profit (not to mention the amount they spend on sales and advertising). In the end, probably less than 50% of what you pay to them goes to administration and healthcare. Compare that to medicare, where almost every dollar spent goes to administration and healthcare.
Draw your own conclusions.
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djohnson
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| Posted: Mon May 16, 2011 12:44 am Post subject: |
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The information posted about $10,000 individual and $30,000 family deductibles under High Deductible Health Plans (HDHP) which are companion to Health Savings Accounts (HSA) is entirely incorrect.
2011 Minimums and Maximums for HSAs and HDHPs (All the Same as for 2010)
Maximum Annual HSA Contribution: individual $3,050; Family $6,150
Minimum HDHP Deductible: individual $1,200; Family $2,400
Maximum HDHP Deductible: individual None; family None
BUT . . .
Maximum HDHP Out-of-Pocket Expense (excluding premiums) Individual $5,950; Family $11,900
So even though federal law does not specify a maximum annual deductible, the federal Out-of-Pocket limit prevents the kind of outrageous deductibles described above. Many HDHPs have lower deductibles and out-of-pocket maximums than allowed under federal law.
No family covered by an HDHP would be exposed to a $30,000 deductible. But they could be exposed to $11,900.
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MaxHerr
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| Posted: Wed Aug 31, 2011 4:53 am Post subject: |
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Here is a more cynical explanayion for which I have no proof. The insurance companies know that the consumer wants to use HSA eligible policies in order to save money - the consumer can shift medical expenses from a non-tax deductible to a tax deductible status.
Therefore, insurance companies can "take a cut" of the consumer's savings by charging higher premiums for the same coverage. Sadly, this is exactly how corporate usa works.
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alcesalces
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| Posted: Wed Aug 31, 2011 4:37 pm Post subject: |
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| Quote: | | insurance companies can "take a cut" of the consumer's savings by charging higher premiums for the same coverage. Sadly, this is exactly how corporate usa works. |
Written by someone with no understanding of (a) business in America and (b) the insurance sector specifically.
"Corporate USA" does not "take a cut" of anyone's savings. They operate in a manner that results, in most years, with a net profit. There is no other way to remain in business over the long term. This is the essence of capitalism. In the USA, "consumers" are free to do business with any company of their choice -- no one is forced to do business with anyone, EXCEPT BUSINESSES that are forced to do business with local, state, and federal government bureaucracies and CONSUMERS with "public utilities".
Insurance companies, like all others, are in business to earn a profit -- for their investors or their policyholders. They manage to do this in most years by charging appropriate premiums, paying appropriate claims, and investing their capital resources in (a) an actuarially-sound manner (as required by law) and (b) a prudent manner with regard to their unregulated reserves.
If insurance companies, like any other company, including the Big Oil companies, simply charged whatever they wanted to charge consumers, they would soon find themselves with relatively few customers, little profits, and eventually no longer be in business. That, too, is how capitalism works. It is a "for profit" system, but it is not only about profits. Competition helps to restrain prices. Kellogg's does not charge $10 for a 15-ounce box of cereal because its two main competitors, Post and General Mills, still charge only $3.50 for a similar product.
| Quote: | | the consumer can shift medical expenses from a non-tax deductible to a tax deductible status. |
This, too, shows a complete lack of knowledge of the US (federal) tax system. Insurance companies did not create HSAs . . . Congress did. Congress also tells us, "You cannot deduct medical expenses unless they exceed 7.5% of your Adjusted Gross Income (AGI)" -- a standard that all but some non-working or retired folks can meet.
So then Congress said, "If you want an HSA (the ability to use pre-tax dollars) to pay for medical expenses, you will also have to purchase a HDHP." And the insurance companies responded with products to meet the need.
Those products are not one-size-fits-all, one-price-for-all. Consumers have a wide choice of plans, and competition restricts wild pricing. But, in insurance, there is also a state-based system of regulation that also prohibits wild pricing.
When Obamacare ultimately forces all consumers to do business with a single-payer system (that necessarily eliminates the state-based regulatory system and replaces it with another sprawling, inefficient, unmanageable federal bureaucracy), the discussion of pricing and competition will be moot. The new discussion will turn to the lack of providers, the long wait for service, and the fact that, "What I need, the government says I don't need, so if I want it, I have to pay for it myself. I sure wish I still had health insurance."
That discussion will be coming sometime after 2014, unless a new Congress and a new President of the US make some changes sooner rather than later . . . because the incumbents have no desire to change the discussion today. All they (the party of the president) want to talk about today is more ways to "raise revenue" to feed their addiction to spending.
That "taking", alcesalces, is what will cause your savings to evaporate. Not insurance premiums.
Less government = more savings. Less government = more profits. Less government = LOWER prices. Less = more.
Demand less from your government, not more.
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MaxHerr
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