Writing health insurance has been my business for nearly 20-years. I have seen numerous options that individuals and employers can opt for to control healthcare costs.

The real problem is that no one really understands how to acquire health insurance properly.

When we purchase anything that costs large sums of money we shop and use due diligence.

Why then don’t we use the same process to procure affordable quality health insurance??

Most agents are like consumers who purchase coverage. They simply don’t understand insurance and its specific purpose, and forget about explaining all the various options!

The purpose of any insurance plan is to protect us against a catastrophic loss. Such a loss may cause us to lose our homes and life savings. If you understand this simple description, you will then understand that insurance isn’t really that expensive. Especially, once you understand the trading dollars aspect of premiums versus actual incurred expenses.

Trading dollars is simple:

You purchase a plan with a $500.00 deductible for $200.00 per month

 I show you a plan with a $1000.00 deductible for $170.00 per month.

You save $30.00 per month or $360.00 per year. You self insure for a net $140.00 in case of a major medical occurrence. 

Worst case, you pay potentially another $500.00 in deductible cost. If you don’t hit your deductible you save $360.00. If you hit it you lose $140.00. A terrific gamble when you consider only 4% of the population hit the annual deductible.

When you start to configure the savings for a family the numbers jump off the chart.

This next comparison is actually using the current Chamber of Commerce rates:

The current family rate for the $500.00 Point of Service plan is $933.06

If you choose the HSA option using the $3000.00 Deductible, your monthly family rate is $456.11.

The monthly savings is $476.95 and the annual savings is $5724.40

Using this example you save $5724.00 and apply it toward those medical expenses incurred –versus- paying the insurance company $5724.00 plus all the deductibles, coinsurances and co-payments.

Those expenses are also after tax expenses. If you choose the Health Savings Account option you actually can fund your medical expenses pre-tax or tax deductible and receive an additional savings.

The IRS allows a family to set aside up to $6,150.00 annually. And if any adult is 55 or older they can set aside an additional $1000.00. 

Any money set aside grows tax deferred and is income tax free provided you use the account for medical expenses only.

The Health Savings Account Plans are actually the last true way of saving money, saving taxes and actually providing you with a true out of pocket picture up front.