Close to reaching your Health Insurance Deductible? Spend MORE soon!

If you or your family have had one or more health expenses this year, such as surgeries, hospitalizations, pregnancy, or anything that causes you to start paying towards your health insurance deductible, NOW may be the time to spend MORE, not less. While this sounds counter intuitive, spending MORE on needed health issues at the end of the year may actually save you money.

Most health insurance plans operate on a calendar year, from January 1st to December 31st. Your yearly deductible is usually also based on this time-frame. So, let’s say you have a $1,000 deductible plan with, 20/80 Coinsurance (This means after reaching your deductible you pay the remaining 20% and the insurance pays 80% of all bills until you reach a certain maximum, at which point you get covered at 100%.). Now assume that you have spent $800 of your deductible though October, and the doctor says you will need more medical treatment in the near future. In this case, if you wait to get your expected medical treatment until after January 1st, you may start paying towards your entire $1000 deductible again! However, if you complete the needed work or procedures BEFORE December 31st, you may only pay another $200 towards your deductible, and then just 20% of the remaining charges! You’ll “save” $800 of your own money from having to be used towards you deductible again.

Think of a deductible as “use it or lose it”. Once you start getting close to using your entire deductible for the year you might as well get as much other medical work done as you can, as it will cost you only incrementally more! People who get really burned by paying two deductibles in a close time period are those women who go into labor on December 31st, and end up having their baby on January 1! Having a baby is expensive and a pretty sure way to reach well beyond the yearly deductible. Thus, having the expensive childbirth cost split over two “years” requires one to potentially spend the entire deducible TWICE!

Now, it isn’t being advocated to have unnecessary medical procedures done just because you “can”, but if you know you must have more medical procedures done in the near future, getting as much done in one year as possible is a sure way to save money. Most though not all plans operate this way, so be sure to ask your broker if this situation applies to you.

My Health Insurance of Washington specializes in helping individuals, families, the self-employed, and small business find quality health insurance plans to meet their financial needs. Based in Washington State, their sole focus in on Washington State Health Insurance plans.

Lifewise Health Insurance Plans Announces 2009 Rate Increase!

Don’t panic though. Lifewise Health Insurance Plans, the Individual Health Insurance division of Premera Blue Cross in Washington just announced their yearly rate increase. As of January 1st 2009 all their plans will increase by the same amount. How does this stack up against this past summers’ rate increases by Regence Blue Shield and Group Health? Pretty darn good.

The Lifewise rate increase for 2009 will be 7.4%. That is not a typo. Single Digits. Below 10%. Wow. Yes, that is still more than anyone WANTS have their plan increase, but it’s still good.

To compare, Regence Blue Shield of Washington just handed their customers about an 18% increase, and Group Health ended up with a 13% percent increase. Ouch.

This small rate increase was predicted. For the past last two years, Group Health has had, in my own opinion, the best combination of benefits AND rates for most of its individual health insurance plans. Regence was usually more expensive and Lifewise was by far the most expensive. I have a post from September 3rd comparing similar health plans and costs for an average Seattle family. By far over the past couple years, the most reasonable cost for comparable benefits was and is Group Health.

However, looking back just a few short years this result was switched. Lifewise was previously the best bang for the buck. Lately though they had been getting hammered due to their rates. Oh yes, Lifewise heard that their rates and benefits were out of whack, and they finally responded. Now, 7.4% will not make their plans more competitive instantly, but I expect both Regence and Group Health to have another round of substantial rate increases next year, which would then bring Lifewise back into the running. Their plans ARE good, with great preventative benefits; they’ve just been priced a bit high.

This all goes to show that you should shop your health insurance plan every couple years. If you or anyone you know is on Lifewise Insurance and want to know more about this rate increase or other available options, give me a call or email. I’m always happy to help!