Many health insurance professionals will tell you if you ask them, "What's my co-pay" is one of the most asked questions we get from prospective clients. Many clients assign a value to their health coverage based upon the amount of their co-pay's. And, if you're not a health insurance professional, you're probably reading this article and thinking to yourself, "Hmm, what are my co-pay's?" Tsk, tsk, tsk.
Many American's try so very diligently to save $100.00 on their health coverage and it usually ends up costing them about $1,000. Huh! That's right, there are health plans on the market, like Health Savings Account plans, which run about $100 to $300 less per month than their non-HSA counterparts.
The lack of co-pay's in HSA health plans cause many consumers to balk. The fact that doctors' office visits are an out of pocket expense seems illogical. "How does an out of pocket expense save me money?" you ask. Let me explain.
First, the average doctor's office co-pay with a PPO/HMO plan is roughly $35.00 to $45.00. A doctor's office visit on an HSA plan is roughly $70.00 to $80.00. The HSA plan owner then applies a 40% in-network discount, so after re-pricing, the visit only costs you about $42.00 to $48.00. That's a difference of $3.00 to $6.00 between plan types, not to mention the entire HSA expense is tax deductible. You see, ALL allowable expenses paid from your HSA account are tax deductible.
With this in mind, ask yourself just how many times you go to see the doctor on a yearly basis. We're talking check-ups and immunizations, not hospitalizations and catastrophic events. Once, maybe twice per year, sounds about right. Now, let's take a look at the numbers. At this point, if you've had two doctor visits you're at $70.00 to $90.00 in out-of-pocket co-pays for the year on your PPO/HMO plan. This translates to $84.00 to $96.00 per year in out-of-pocket expenses with an HSA.
If the HSA plan premiums costs a family of four, $250.00 per month, but the PPO/HMO plan is $475.00 per month, you are saving $225.00 per month just by virtue of having the HSA plan. This is not to mention the tax savings you'll realize. In the above scenario, you would be paying an additional $2,700.00 per year, for the privilege of saving between $3.00 and $6.00 per person, per visit on two annual check-ups.
With A family of four.
So, let's see, are you saying that you would rather pay $2,700.00 more per year just to have a PPO/HMO plan with $35.00 to $45.00 co-pays? Here's the breakdown: Get a PPO/HMO plan for $5,700.00 per year, so that you can have $35.00 to $45.00 co-pays. Or, get an HSA qualified plan for $3000.00 per year, and have $42.00 to $48.00 tax deductible, out-of-pocket expenses.
So, is the million dollar question, "What is my co-pay?" Or, is it "Am I actually saving money with my co-pay plan?" If you're a logical thinking person, and many of you are, the question is probably the latter of the two.
Health Savings Accounts provide numerous benefits for the small business owner, individuals and families. In my next article, as we approach the 2008 tax season, I will explore the many wonderful tax benefits of HSA qualified health plans.
Do you have questions or need additional information? Contact Mr. Rod Wilson at 813-446-2062 or by logging onto http://www.thewilsonagency.biz then click the "Contact Us" link and complete the form. If you need a free health insurance quote, visit http://www.FlaHealthQuote.com click the "Request Quote" link and complete the form. One of our friendly customer service representatives will usually respond within 24 hours.
