How I Pay $85 A Month For My Health Insurance Policy

Health care is the big topic around the country right now. Politicians want to push a reform bill that many Americans don’t want. Americans want affordable health care, but they are weary about handing it over to the government. In high school and college, I never worried about health care. I was always under my mother’s health insurance policy, so I never worried about it. Then when I got married, my first “real” job paid for 80% of my health care premium, and the rest of it plus the premium for my wife to be added on was taken out of my paycheck every two weeks. I still paid around $240 a month for it, even with 80% of my premium being paid, so I know that health care policies can be very expensive.

When we moved to Orlando for my wife’s job, I was forced to quit my job, and it was very expensive for her to add me on her health insurance policy. So, I started shopping around and looking at my options. I knew about high-deductible plans with an HSA account, because I had researched them to write about on this blog, but I never had one in the past. Once I started getting quotes, I was really liking what I was hearing. In the past 9 months, I have relied on temp work, freelancing, and part-time positions to make an income. I don’t have a full-time job with benefits from an employer offering to pay for my health care plan.

The High Deductible Health Care Plan

For $85 a month, I have a full health care insurance policy with Assurant Health that pays 100% of my medical costs after I satisfy the $5,000 deductible. A $5,000 deductible for one person? That’s insane, right? Not for a young, healthy male that rarely needs medical attention. Plus, I have an endorsement attached to the policy for emergency medical care that waives the deductible if I break my leg or cut my finger off. Yes, $5,000 out-of-pocket is a lot of money, but it’s not much more when you factor in the cost of co-pay health care.

HMO/PPO health care plans

These plans are crap, and I would never have one unless my employer was paying for my premium. You’ll pay anywhere from $250 to $500 a month, plus you’ll be nickel and dimed by co-pays and many procedures only pay out 80% of the cost, and you are stuck the other 20 percent. Let’s say someone paid $400 a month for a health care premium, and they spent $250 in co-pays over the year. They would spend over $5,000 for health care that year, and that $4,800 in premium is gone no matter what. There’s a possibility that they would have spent less money paying cash if they were only paying for routine doctor’s visits and medication. I spend $1,020 a year in premium down the drain, and I run the risk of paying out an extra $5,000 if I need a large medical procedure or expensive medication, but I only incur that cost if it happens. The $5,000 from an HMO premium is down the drain no matter what.

The Health Savings Account

Additionally, I contribute $50 every two weeks to a Health Savings Account that has many advantages, and I can use this money towards any qualified medical expenses, including my deductible.

Tax Incentives: I am able to deduct up to $3,000 of HSA contributions from my 2009 taxable income. Also, money withdrawn from the account is tax-free and the interest it gains is tax-free.

The Money Never Goes Anywhere: Cafeteria Plans or Flexible Spending Accounts allow you to stash away pre-tax dollars for medical, dental, and vision expenses, but the money is taken from you if you don’t use it at the end of the year. When you contribute to an HSA, that money is always yours, and it always rolls over to the next calendar year if you don’t use it.

Debit Card: I have a debit card attached to my HSA account, so I can pay for doctor’s visits, prescriptins, over-the-counter medication, and other medical items when needed, and the debit card makes it very convenient. I would be very ticked off with it if I had to pay for something, fill out a form, fax it, and get reimbursed. That’s SO 20th century.

You Can Invest The Money: I have mine in a money market account that probably earns about .5% interest, but once you build up a good chunk of cash, you can start investing it in mutual funds with the broker that is affiliated with the bank that handles your account.

The Politics

I know the strong political debate behind health care, a single payer system, and the millions of Americans that don’t have health care. Please do not get the impression that I am saying that what works for me should work for everyone. Yes, I am a healthy, young male, so I received an ultra-premium rate, I understand that. But, I also know that many of the middle-class Americans that don’t have health care either choose not to pay for it, don’t want to take the time to do the research about affordable health care options, or they just don’t know much about high-deductible plans with HSA accounts. This is a great alternative for some people, so please check it out if you are in a similar situation as me.

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