In order to produce the podcast and keep content up free for you, I work with partners so this post may contain affiliate links. Please read my full disclosure for more info.
Trying to sort through all the health insurance plans? Find out how you can choose an affordable health insurance plan that covers your family's needs!
Affordable Health Insurance
Where do I begin?
For the last decade, we’ve seen our health care costs go up.
When we had our first child and switched to the family plan I felt like there was a vacuum sucked up all of our money.
We’re a fairly healthy bunch, but even downgrading to a basic family plan was still pricey.
Last year, we received notice that once again, our premiums for the plan would go up.
This time, though, our premiums would’ve been right up there with our mortgage.
Um, no thank you.
We knew we had to make a switch. But here’s the thing – it’s scary.
One one hand, handing over that much money month after month when we basically use it for annual well visits seemed like such a waste.
But we didn’t want to be under covered either. Have you’ve seen those bills from the doctor’s office or hospitals?
There was a lot of back and forth, going over our options and running the numbers. And we switched last year to high deductible plan and started contributing to a health savings account.
So far it seems like the right call for us.
Now you might be hearing about high deductible plans and thinking they would be a great to save, but are they the right choice for you?
How do you actually weigh the pros and cons?
Today I’m bringing back financial planner Michael Dinich to decipher and break down all the jargon around health insurance.
In this episode we discuss:
- The pros and cons of the typical plans offered – high deductible plans look good on paper but they be the worst choice for you
- Which numbers you need to keep an eye on to properly weigh the costs – because premiums and deductibles aren’t the only numbers you need to keep an eye on
- Ways you can maximize your benefits through FSAs and HSAs
Health insurance is a huge expense.
Last year when we reviewed the health plan options, we found out that premiums were going up. again.
No surprise there, but the amount did catch us off guard.
If we were to stay with the ‘basic' family plan we had, our monthly premiums would be almost the same as our mortgage payment!
That seemed ridiculous.
If you're in the same boat – looking for an affordable health insurance plan that will cover your family's needs, save this episode.
Michael Dinich is back to help decipher and decode health plans so you two will be armed to make the best choice for you and your situation.
In this episode we discuss:
- exactly how copays, coinsurance, deductibles, and more work so you know what coming out of your pocket and what's covered
- compare how typical base plans work versus high deductible health plans
- the ins and outs of health savings accounts
Hope you enjoy!
And if you’re looking for another episode about saving on health care costs, check out my first chat with Michael.
We went over ways you can save and lower your health care expenses.
Resources to Save Money on Healthcare
Are you looking for more help with keeping health care within your budget? Here are some resources:
- Work with Michael: He's a certified financial planner who specializes in assisting families to navigate their health care options.
- How to Save Money on Your Health Insurance and Expenses
- Hack the Affordable Care Act Guide
- Why We’re Switching to a High Deductible Health Plan
- How to Spend Less on Insurance
- Save Money on Health Insurance
- Best Budget and Money Apps: Personal Capital, Tiller, Mint
- Grow Your Stash Faster: High Yield Savings with CiT Bank
- Automatic Saving:
- Free 401(k) Analysis:
Meet Michael Dinich
Special thanks to Michael for coming on!
Michael Dinich is a certified financial planner who help families plan for retirement, reduce taxes, eliminate unnecessary expenses and plan their estates.
He lives in rural PA with his wife and two children and is a hobby farmer.
Why You Need Health Insurance
Health insurance – it's a huge expense.
I know for us it's right up there with a mortgage.
It's a big chunk of money. And I feel two ways about this one. You have to have insurance. You know, it only takes one visit to the E.R. (and we've done that with a two-year-old). It can get pricey quick.
You can ruin your finances with one visit since medical expenses can add up quickly.
So having insurance is smart.
On the other hand, it's such a big chunk of your money. Just how much is usually tucked away in that thick packet HR sends out every year during open enrollment.
You find your way through this maze as everyone now is getting emails from their employers saying, hey, by the way, here are your health care options. And all they see are a ton of numbers. Absolutely.
So I'm going to start off kind of with our experience.
My husband gets an e-mail every year and last year we got one with three plans.
They said, OK. We have this base plan. We have the plus plans like PPO. And then we have the high deductible health plan with the HSA.
It's like alphabet soup.
Which is why I'm happy Michael could break it down for us.
Health Insurance Decoded
Michael Dinich: Sure. So a PPO is a preferred provider organization. Right. And what that traditional PPO plan with the employers referring to is a plan with a lower deductible in exchange for a higher premium.
So basically what you're doing is you're paying more money each month for the coverage by taking less risk that if you have a medical emergency, you're going to pay less additional money out of pocket.
Elle Martinez: The problem to me is there are so many costs involved besides what you're paying out of your paycheck, your premium.
We have deductibles, coinsurance, and co-pays. Can you go over what that is besides money coming out of our pockets?
With a Flexible Spending Account (FSA), this money is like a cash account. It can be used for medical expenses such as contact lenses, glasses, and blood sugar test strips.
The catch is whatever you don't use by the end of the year, it's gone.
With a Health Savings Plan (HSA), whatever you don't use you keep. It can then grow over the years. with the way it's constructed, it can also be used as a resource during retirement.
Understanding High Deductible Health Plans and Health Savings Accounts (HSAs)
This is how
One benefit of going with your employer's health savings account is that money is going to be deducted from your taxable income.
It's going to save you a little bit on FICA taxes (assuming that you don't hit the income-earning threshold for Social Security tax).
One of the first goals couples have is with their HSAs is, first of all, have enough saved stash for your out of pocket maximum (which may be twice your ).
Michael explains why:
Let's say you have a maximum annual out-of-pocket expense of ten thousand dollars on your health insurance plan.
Well, your deductible might only be five thousand dollars.
I don't want people to start investing right away like with the first five thousand dollar payment because what happens if in year two you trigger the whole thing?
So I really like to see you don't maintain that maximum annual amount and there you know someplace safe you know.How to Find an Affordable Health Insurance Plan for Your Family
After you have that stashed you two can start thinking about investing any additional money you contribute to the fund.
Similar to an IRA, you can invest your money and it grows tax-deferred. Down the line when you need it during retirement, you can access it .
Support the Podcast!
Thank you so much for listening to the podcast! If you enjoyed this episode and found it helpful, here are some ways to support it.
- Spread the word! If you enjoyed this episode and think it can help a buddy get on the path to dumping debt and become financially free, please share.
- Leave a review. Honest feedback and reviews make a big difference and the word out about the podcast. Leave your review on Apple or Stitcher.
- Grab a copy of Jumpstart Your Marriage and Your Money. My book is designed for a busy couple to set up their finances in 4 weeks. Get tips and tools that have worked for other couples on their journey of building their marriage and wealth together!
This episode was originally published in October 2018. Show notes have been updated September 2019.