HDHP + supplemental health insurances

[dominique614]

Hi!
I've a high-deductible health plan ( I'm in my early 30s) and thinking of adding accident and hospital indemnity insurances  in order to pay less in deductibles/co-payments/out of pocket costs, but I'm still torn about it...is it worth it? Or should I just pay it from my emergency fund? Has anyone thought about it?

[jfoxcpacfp]

Of course, cost would be a huge a factor and we don't have that piece of information.

[dominique614]

The trend I've seen so far is pay it from your savings/ taxable accounts etc.,rarely rely on other supplemental plans - also I'm still new so I've more than half of the articles published on this blog to read- the only thing I can add is that I'm in pretty good health/ no chronic disease etc. and, at the same time, I don't want to 'waste' money on something which could have been invested in other ways...

[jfoxcpacfp]

Sounds like you would probably want to stick with the HDHP only unless you have other immediate family members with health issues. I don't believe you'll find much on this blog about supplemental plans paired with an HSA-qualified plan, but, like you, I haven't read everything here, either. I can tell you that in the education I've taken as a CFP and CPA, I've not seen that discussed. May be an oversight and you may be on to something - I just don't know. Or it may be a topic to take up with your insurance agent and report back here.

[dominique614]

jfoxcpacfp wrote:

Sounds like you would probably want to stick with the HDHP only unless you have other immediate family members with health issues. I don’t believe you’ll find much on this blog about supplemental plans paired with an HSA-qualified plan, but, like you, I haven’t read everything here, either. I can tell you that in the education I’ve taken as a CFP and CPA, I’ve not seen that discussed. May be an oversight and you may be on to something – I just don’t know. Or it may be a topic to take up with your insurance agent and report back here.

Click to expand...

Thank you for replying! And yes,I stick with this plan for the opportunity to invest in a HSA and so on. I'll talk to my insurance agent and see what he says.

[spiritrider]

While some investment advisors are commission based, all insurance agents are. This is not to say yours will steer you wrong, but just like a commission based investment advisor, they have an inherent conflict of interest.

Narrowly targeted health insurance is almost always significantly more expensive for the insured risk. You are generally better off paying more for better general health insurance and/or self-insuring for supplemental events.

[dominique614]

Me choosing a supplemental health insurance is based, solely, on trying not to pay the all deductible (6,000 $) in case something happens, in order not to touch other funds etc....but still thinking about it

[Sajimone]

This is an interesting question...  Our hospital just started offering HDHP and also encourages enrollment by matching contributions up to an additional $1000 to the HSA.  So my out of pocket pretax contribution for the family HSA is $5900 + $1000 hospital contribution = $6900.   The HDHP plan is also $700 cheaper than the regular health plan but the downside of the HDHP is the high deductible/out of pocket cost of $5000 in case we become unhealthy.. knock on e-wood.   Effectively with the tax savings included.. we'll be saving/gaining around $3-4k annually (1700 + 5900 x 0.4) in addition to another tax free investment account.  I hope everyone would agree?

My family is fortunately healthy.. so we're pretty much at risk for accidents and critical illnesses.   The hospital offers additional ACCIDENT AND CRITICAL ILLNESS insurances that are relatively cheap and offered by Aflac/Allstate respectively.   I attached some info on those plans and what these covers i.e. ER visits, hospital admission, etc.  Annual cost for the accident insurance is $442 for the family.   The critical illness just pays an after tax lump sum of 10k, 20k, 30k for roughly an annual cost of $120, $240, $360, respectively give or take.  So if I or family member suffers a heart attack, stroke, cancer etc.. I believe this plan would pay out an after tax lump sum which would more than cover the out of pocket cost of the HDHP.

To me this seems to be a no brainer!  I've elected the HDHP with max HSA contribution.  And I've also elected these insurances as well which I think is effectively paid for by the employer as they've given me an additional $1k pretax contribution (not including the tax free growth/withdrawal as I don't plan to touch this account til 65) and $700 savings from the regular plan.

I'd appreciate any thoughts if Im missing something here!

 

[dominique614]

The accident policy benefit from Aflac is it taxable money or not ? If you pay this policy with pretax money, the money is taxable.

[Sajimone]

both insurances are paid with after tax dollars.   attached my 2018 overall elections.

 

 

[dominique614]

I think I just missed it,then... so, all in all, you think it’s worth it.

[Sajimone]

I don't know what's right for your situation?   To me, this seems more like a supplemental to the HDHP health plan to alleviate some of those out of pocket cost for medical issues that we are likely more at risk for?   Also Im not really paying for it as Im getting an additional $1k from my employer.   Accidents, heart attacks, strokes, trauma, cancer are "covered"... whatever that means... as oppose to lupus, rheumatoid, osteomyelitis, chronic liver/renal, chronic dm or chf where these insurances do not help at all?

What's not really clear to me at this time is what exactly is covered and how much will be reimbursed?  How much cash benefits can I received from Aflac and how many times can I really make a claim?   I don't need financial help with groceries?   What exactly is covered in an ER visit?   Im trying to reach Aflac to understand this insurance better.   But in the meantime, it only cost $400 annually to have it.  Sure why not?  Hopefully I won't need it.   The Allstate plan seems easy to understand... if my wife or I are diagnosed with any of those listed medical conditions.. its just a cash payout which easily covers my maximum out of pocket cost above which my health plan takes over.   That plan will only cost me $120 annually.

I'd like to know what others think?  Anyone have or use these insurances?