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Published: May 29, 2009
IS your medical insurance bad for your health? If you have a high-deductible plan, the answer may be yes.
The investment firm Fidelity recently surveyed employees at various companies who had opted for a high-deductible health plan linked to a health savings account. About half of those workers said they or a family member had chosen not to seek medical care for minor ailments as many as four times in the last year to avoid paying the out-of-pocket expenses.
As any doctor will tell you, small health problems left untreated can become big problems, warns Kathleen Stoll, director of health policy at the health care advocacy group Families USA. “This is just one of the many high-deductible pitfalls consumers need to watch out for,” Ms. Stoll said.
High-deductible health plans are essentially insurance policies that charge lower monthly premiums than traditional plans because the consumer is responsible for paying the first $1,000 to $5,000 or more in medical bills before the insurance kicks in. The plans, sometimes called catastrophic insurance, are often used in conjunction with a health savings account.
With these accounts, earnings on savings are allowed to accumulate tax free and roll over year to year, as long as the money is ultimately used to pay
for medical expenses. To qualify for one of these tax-sheltered savings accounts, an insurance plan must have a deductible of at least $2,300 for families and $1,150 for individuals.A person can put up to $3,000 annually in these accounts, or $5,950 for a family.
People who can best take advantage of this tax break are those who can afford to contribute the maximum but do not spend it all on health care. The idea is that the money accumulates over the years, providing a cushion down the road when health problems or the need for long-term care arise.
Find out about how the insurance companies find loopholes in the fine print that will cost you money by not covering your care. Important! Read the rest of the story at this link.
