My [Soon To Be] Illegal Health Insurance Plan
For a long time I did not have health care. I was fresh out of college and was relatively healthy. For me, there was no real need for health insurance. But, a year and a half or so ago I decided that it was in my best interest to sign up for a health care plan.
I spent about two weeks using sites like ehealthinsurance.com comparing literally hundreds of plans with all kinds of different features until I found the one that suited me best.
I selected an HSA from Kaiser Permanente. An HSA (Health Savings Account) is similar to an IRA, but for health care savings rather than for retirement. A person enrolled in a HSA is allowed to contribute up to $3000 tax free each year to their account.
Under Federal law, these HSA’s must be paired with a HDHP (High Deductible Health Plan). For example, my plan has a $1200 deductible, but everything after that is covered 100% by Kaiser.
I love my plan.
The point of having the high deductible plan is to encourage patients to keep their health care costs down. If a customer knows that they have to spend the first $1200 of their health care expenses out of pocket, they are more likely to avoid unnecessary health care expenses. Conversely, a health emergency is extremely unlikely to lead to major financial distress, as the maximum out of pocket expenditures are only $1200.
I mentioned above that an HSA is similar to an IRA and that I am legally allowed to contribute $3000 tax free to my account each year. This allows individuals to save money for their future health care expenses. For example, if I deposit the maximum of $3000, but only spend $1500, including all medical bills and over the counter and prescription drugs, I am left with a surplus of $1500 in my account. This money can be kept in an interest bearing savings account, invested in a money market, or invested in the stock market.
This type of plan obviously doesnt suit everyone, but it is a great plan for people like me: young, relatively healthy people with minimal health care costs. Because I enrolled in this plan while young and healthy, I can use the unspent funds remaining in my account to save for when I am a sick old man with high health care costs.
In fact, while insurance premiums were expected to rise around 8% this year, my premium actually dropped by 3.6%! It dropped because I kept costs for both me and my insurance company under control.
As I said above, I am an informed consumer who spent quite a long time comparing plans until I found the plan that I felt was best for me. This plan has some great features, encourages saving and allows me to contribute money on a pre-tax basis. It has also resulted in my premiums actually going down in a time when most people are seeing rather large increases.
My plan is great as it is, but if the government wanted to make health care more affordable, they would remove contribution limits on HSA’s, allowing consumers to place much more money in these plans. They could also allow users of any health plan to enroll in an HSA, rather than limiting HSA’s only to those with high deductible plans. Making these reforms would lead to lower costs for many Americans, and would create an incentive for the young and healthy to save money for the future when they face declining health.
Sadly, the Democrats’ health care plans will outlaw my health insurance plan.
I dont even understand why anyone would want to outlaw this plan–it really is great– but there seems to be a lot of things that I dont understand these days. Are these Congressmen so conceited that they actually believe that they are capable of making a better decision about my own life than am I? None of these people have ever met me. None of them can possibly understand my health care needs better than I do.
Americanly Yours,
Phred Barnet
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