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With more than 34 years of experience in the HSA/Health insurance business, I'm happy to offer my expert and unbiased answer. Although the average deductible has substantially increased over the last 30 years, the popularity of the HSA concept is here...and here to stay.
High Deductible Health Insurance plans (HSA) are very popular for individuals and families that want quality medical coverage from reputable companies, but at a rate they can afford. Even with the passage of the Affordable Care Act (aka Obamacare), the popularity of HSA accounts has increased.
But what about the future of these types of plans? Their popularity is not likely to decrease, since health insurance costs keep increasing, and there is no other type of coverage that can offer a combination of network-negotiated discounts and paying for healthcare, dental, and vision expenses with tax-free dollars.
However, as our political landscape changes, be prepared for unanticipated changes! As we move closer to 2017 and 2018, many legislative changes are planned. These changes could impact the cost of coverage and the amount of federal subsidy that is received. Both the group sector and individual sector could be adversely affected.
So...Expect HSAs to continue to be a popular and "normal" choice to consider for individuals, families, and small and large businesses.
Answer provided by Edward Harris, one of the nation's premier healthcare authorities. Edward is the owner of majormedicalhealth.com, where consumers can compare the best health insurance rates from top-rated companies.
A very good and perceptive question. From the perspective of a 30-year health insurance veteran I can certainly say that by the standards of the mid-1980's when $250 or $500 deductibles were the norm almost any health insurance plan offered today is a high deductible plan. Now, high deductible health plan means different things to different people/organizations. Since the inception of Health Savings Accounts in 2003 the term high deductible health plan was generally associated with a health insurance policy designed to be complimented by a Health Savings Account.
Over the years, as health care costs have continued to escalate and pull health insurance costs up along with them, there has been a steady increase in plan deductibles in traditional health insurance plans that feature copayments for services like doctors visits and prescription drugs. With the implementation of the Affordable Care Act (ObamaCare) this trend has accelerated sharply for a variety of reasons. Today my average small group employer client usually has a deductible in the $2000 to $2500 range and in the individual health insurance market plans with deductibles in the $4000 to $6000 range are not uncommon, and these are all for plans that still maintain many copayment features and are not qualified for use with a Health Savings Account.
If the Cadillac Tax provisions of the Affordable Care Act go into effect in 2018 as currently planned this will place great pressure on many organizations to increase their plan deductibles significantly to keep their premium levels below the threshold where this tax would be assessed. This will impact many organization that have traditionally offered rich health benefits packages to their employees/members. State, county and municipal governments, educational institutions, hospitals, and ironically many labor union plans are some of the prime examples of organizations that will be adversely impacted by this tax.
So, to a fairly large extent, one can argue that high deductible health plans have already become the norm in the individual and small group health insurance markets and are in the process of being joined by their cousins in larger businesses. Absent some serious changes in America's health care cost structure and the requirements of the Affordable Care Act the move to high deductible plans with their associated cost shifting to the health care consumer are a foregone conclusion.
That is a great question! Very simply put, probably so. While the Affordable care Act (Obamacare) has done a good job of slowing healthcare costs from rising double digit increases to low single digit increases, the damage has been done. The high costs to employers of providing their share of the costs eats into their profits, and sadly the prevailing sentiment seems to be profits are more important than employees in far too many cases. As that is the case, what we are seeing is a shift from the employer taking the risk of paying to the employee.
This has been the case with retirement accounts, there are very few companies that pay pensions anymore, most have moved to employee managed 401k's or IRA accounts. The same with health care - they still offer it, but to keep costs low, they offer plans that have low costs, and high deductibles. The good companies will make HSA's (Health Savings Accounts) available to you (they allow you to deduct money from your check and deposit it in an interest bearing account for future medical expenses, and can only be used with high deductible plans) to kind of balance them out.
So my best guess is unless there is a change in employer love for profit, or a dramatic drop in health care costs, we've pretty much set ourselves on a path of high deductible health care plans. Thanks for asking such a good question!
Insurance Concierge, M&G Insurance, Lake Oswego Oregon
2017: With Trump in the White House you will probably see more options for higher deductible plans and Health Savings Accounts (HSA's). Trump is very much in favor of HSA's, where you take more responsibility for your health insurance needs. Unlike a traditional group insurance health plan where you owe a co-pay to the doctor for his services an HSA has you pay 100% of any bill that comes in up to your chosen deductible. So, if you choose a 2,800 deductible on an 80/20 plan and a Max OOP of 7,150 you will be responsible for 100% of all bills up to 2,800. Then you will owe 20% of each additional bill that comes in up to your Max OOP of 7,150 (including your deductible in most cases); while the insurance company covers the other 80%. After you reach your Max Out of Pocket of 7,150 the Insurance Company will pay 100% until the end of the year; at which point your deductible starts all over again. If you use a doctor/hospital which is Not in your network then you may have an additional deductible, co-insurance and Max OOP to meet; on top of your current deductible, co-insurance and Max OOP. Keep in mind that you may have additional expenses, on top of that Max OOP, such as many Anesthesiologist's choose not to be in any network.
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High Deductible Health Insurance plans (HSA) are very popular for individuals and families that want quality medical coverage from reputable companies, but at a rate they can afford. Even with the passage of the Affordable Care Act (aka Obamacare), the popularity of HSA accounts has increased.
But what about the future of these types of plans? Their popularity is not likely to decrease, since health insurance costs keep increasing, and there is no other type of coverage that can offer a combination of network-negotiated discounts and paying for healthcare, dental, and vision expenses with tax-free dollars.
However, as our political landscape changes, be prepared for unanticipated changes! As we move closer to 2017 and 2018, many legislative changes are planned. These changes could impact the cost of coverage and the amount of federal subsidy that is received. Both the group sector and individual sector could be adversely affected.
So...Expect HSAs to continue to be a popular and "normal" choice to consider for individuals, families, and small and large businesses.
Answer provided by Edward Harris, one of the nation's premier healthcare authorities. Edward is the owner of majormedicalhealth.com, where consumers can compare the best health insurance rates from top-rated companies.
Over the years, as health care costs have continued to escalate and pull health insurance costs up along with them, there has been a steady increase in plan deductibles in traditional health insurance plans that feature copayments for services like doctors visits and prescription drugs. With the implementation of the Affordable Care Act (ObamaCare) this trend has accelerated sharply for a variety of reasons. Today my average small group employer client usually has a deductible in the $2000 to $2500 range and in the individual health insurance market plans with deductibles in the $4000 to $6000 range are not uncommon, and these are all for plans that still maintain many copayment features and are not qualified for use with a Health Savings Account.
If the Cadillac Tax provisions of the Affordable Care Act go into effect in 2018 as currently planned this will place great pressure on many organizations to increase their plan deductibles significantly to keep their premium levels below the threshold where this tax would be assessed. This will impact many organization that have traditionally offered rich health benefits packages to their employees/members. State, county and municipal governments, educational institutions, hospitals, and ironically many labor union plans are some of the prime examples of organizations that will be adversely impacted by this tax.
So, to a fairly large extent, one can argue that high deductible health plans have already become the norm in the individual and small group health insurance markets and are in the process of being joined by their cousins in larger businesses. Absent some serious changes in America's health care cost structure and the requirements of the Affordable Care Act the move to high deductible plans with their associated cost shifting to the health care consumer are a foregone conclusion.
This has been the case with retirement accounts, there are very few companies that pay pensions anymore, most have moved to employee managed 401k's or IRA accounts. The same with health care - they still offer it, but to keep costs low, they offer plans that have low costs, and high deductibles. The good companies will make HSA's (Health Savings Accounts) available to you (they allow you to deduct money from your check and deposit it in an interest bearing account for future medical expenses, and can only be used with high deductible plans) to kind of balance them out.
So my best guess is unless there is a change in employer love for profit, or a dramatic drop in health care costs, we've pretty much set ourselves on a path of high deductible health care plans. Thanks for asking such a good question!