Qualified High Deductible Health Plan
A high deductible health plan, also known as consumer driven insurance, is literally a health plan that has lower premiums but has higher deductible in terms of wider coverage of care such as surgery and hospitalization. While enrolled in a plan with high deductible, the member needs to enroll also in a Health Savings Account (HSA). Basically, the member may choose to put in the deductible amount from income in this account but the money is not taxed. Deductibles vary from the number of persons involved in the coverage.
In the insurance industry, to qualify for a high deductible plan, the insured should pay every year for the plan as well as pay the deductable that should be the very least amount of $1,000 just for an individual and for the family an amount of $2,000.
Some of the high deductible plans enable the insured to acquire an HSA and to some requires the need to have an HSA. The cash within the HSA might need to be spent at the end of the year or in some other cases, carry it over on the following year for the coverage. In addition, some HSA accounts won’t allow the member to carry over the mounted money from one year to another. Since the amount needs to be spend, if it is not used then it’s lost out of hand. This is one of the major disadvantages. Moreover, if the money is not used anything else rather than in health care expenses, then the money is not taxable. However, if the money is used to something not allowed, then taxes are to be paid.
In high deductible plan, coverage such as visit to the doctor due to an illness or even preventive care is not part of the amount of the deductible. Individual might pay a minimal co-payment or not for these care visits. In additions, prescriptions can also be bought at with a discount price without any need to pay for the deductible upfront.
The great advantage behind high deductible plan is the people’s welfare of saving money from premiums. Yet, if emergency will occur and the insured needs more than what he has on care, they would most likely loose savings quickly brought by a low rate premium through paying a big amount of deductible. It is hard to predict immediate emergencies and illness so it is a gamble to those purchasers of a high deductible plan.
Furthermore, not all purchasers of high deductible plan have already an HSA. In this case, these purchasers might not be able to meet with the debt on deductible and sometimes may think that it’s going to be hard to pay for the medical bills. Therefore, when having a high deductible plan, an HSA must go with it most especially to young earning income.
High deductible plan provides protection to those people having considerable assets. Individuals who can acquire HSA its deductible are most likely to obtain low cost on medical expenses thus protecting the possible loss of assets and resources.