One of the great manipulations of behavior was the trend in the 80’s for insurers to provide copay for office visits and prescriptions. You have been duped by insurance companies. The cost of that dupe is hard to calculate but is massive. When you buy 1st dollar benefits with a copay, you are paying $1 for two quarters. The same is true as you buy your deductible down from a medium number like $500, down toward $0.
It’s easiest to answer the question by illustrating a real life example using a family of 4 (33m, 33f, 2 kids) living in Suburban Chicago, that are healthy non smokers, no maternity. The cost for a $0 deductible, 80/20 plan, with a $20 office copay and an Rx card costs $962 per month from a well known carrier. The same plan with a $500 deductible, all other benefits being the same costs $793 per month. That’s a premium difference of $169 per month or $2,028 per year. In this example, the worst case, WORST case, is that 3 members of the family have an extra $500 of risk. Worst Case. Why pay $2028 for $1500 worst case? You tell me. Now that same family can get rid of the Copay’s and Rx card, have all their expenses go towards 1 family deductible of $3500, then all the same benefits are covered at 100%. The cost for this plan is $413 per month. Compared to the $0 deductible, that’s more than $6500 in premium savings.
Now go an take $3500 of your premium savings, put it into an HSA trustee account, to pay all your annual healthcare expenses. Once you have used up your HSA account, your insurance pays 100%. If you don’t have the expenses, the money stays with you. Keep in mind, the $0 deductible plan had Copay’s for office visits, drugs, etc.. and if you had a major expense, you still had a $1000 of coinsurance per person.
If you are young or single, the premium savings are not so obvious. Young males in particular are not well served by choosing an HSA. Families are almost always a better value with HSA.
When looking at a health plan, do this calculation:
1) What is my annual premium?
2) What is the most that I can spend if everyone has a major procedure?
3) What will it cost me for what I expect to have in healthcare expenses?
4) Am I prepared to save my savings in choosing a plan without copays?
Balance those and you’ll make the right choice.