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How do you manage high deductible health plan?

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  • How do you manage high deductible health plan?

    I will be finishing residency this June and both my wife and I are currently on a really comprehensive "Cadillac" health plan with small co-pays, no deductible and ready access to specialty services. We will be moving to a new city and starting different jobs, both with high deductible health plans with HSAs. Income will of course be growing, around 300k yearly for me and 140k for her.

    For those on similar plans, how does having a larger deductible affect your approach to medical care? Do you prescribe within the family for simple things to save the hundreds of dollars that each visit would cost? Suck it up and pay out up to the deductible when needed and figure that's what pre-tax HSA funds are for?

  • #2
    It all depends on how old you are and how healthy you are.  If you're relatively young (under 50 perhaps?), fairly fit, and don't have any expensive, chronic medical conditions then why on earth would you pay for an expensive Cadillac health plan?

    My wife and I have been on a HD plan for the last 5-6 years.  We're both mid-30's and healthy.  It doesn't change our approach to getting medical care at all.  We put money in an HSA account each year.  That money will cover our deductible IF we need it.  Usually we don't come even close to meeting our deductible.  My wife goes to a her Gyn doc a couple times a year and a dermatologist here and there.  Otherwise, there's not really a need to see a doctor regularly right now.  There was one year that we had an ER visit and came pretty close to meeting our deductible.  But, we just swiped our HSA card and it wasn't a big deal.  We have $10k in our HSA account right now, even after all the money we've spent on health care over the last 5-6 years.  And we didn't even max out our contributions the first couple of years.  We even use our HSA to cover dental visits and eyewear.  Its a great system for people who have low expected medical care costs.

    It would NOT make sense for someone on multiple medications or with expected regular doctor visits or procedures (for example, someone with crohn's who needs frequent c-scopes).   If you have multiple children who each need regular check ups, vaccines, or have health problems, then you probably shouldn't consider a HD plan either.


    • #3
      The Cadillac plan probably came with the residency. Make 100% sure your new health plans actually qualify as HDHP's; just because it has a high deductible isn't enough. As far as medical expensing goes, you are likely in a great position to use the HSA as a "stealth IRA": contribute the money and get a tax break, invest it and let it grow tax free, and pay for medical expenses out of cash flow. You meet the deductible at the same point whether it's paid for out of HSA or your bank account.


      • #4
        I do nothing differently. If we have a sick kid, we go in and get a proper diagnosis for strep throat, ear infection, or both. At worst, we'll get a bill for $120, which costs us maybe $70 since it will come from the HSA.

        If we were about to have kids or knew we had major surgery coming up, I would have to run some numbers to see if a HDHP would make sense. I don't foresee either of those in our future, though.