Some university alumni associations offer short-term and long-term health care insurance programs to their members. That might be a good reason to join your alumni group. Or search online Golden Rule.com and eHealthInsurance.com.
HDHP. High-deductible health plans (HDHP) have in the past been recommended as a great way to reduce the annual premium for health insurance if you are buying insurance on your own. The higher the deductible, the lower the premium.
And now many employers are offering HDHPs as a health-care choice. Should you make the switch? You should if you are healthy because you will save big.
Generally, this is how HDHPs work: You pay for all expenses up to the annual deductible—at least $1,000 for singles and $2,000 for families.
But there may be another benefit to consider. Your insurance provider has likely negotiated the costs of services with your doctors and hospitals. Take a colonoscopy, for example. The "retail" price the hospital charges may be $4,000. But your insurance company has negotiated that down to $2,800 for its clients. If your deductible is $2,000 your out-of-pocket charge will be $800, not the difference between $4,000 and the $2,000 deductible.
Health savings accounts. If you have a HSA-qualified HDHP (stay with me), the IRS will allow you to open a special savings account where you or your employer (or both)can contribute before-tax dollars that can be invested and earn interest tax-deferred, year after year. Withdrawals for qualified medical expenses also are tax-free. Even more, if you switch jobs, the account is yours unlike other reimbursement accounts that are not portable. You can use this money to cover your out-of-pocket medical expenses.
Of course, just like all federally regulated situations, there are rules.
Universal HSA principles
1. You must have an HSA-qualified high-deductible health plan to open or contribute to a health savings account (HSA) in your own name.
2. Switching to a high deductible health plan from a traditional low deduc-tible health plan will cut the cost of your health plan substantially. You deposit the savings gained into your health savings account. The whole point of a health savings account is to allow you to use that money on a tax-free basis to pay for your health expenses up to your new, higher deductible.
3. The money in your HSA is your own. This means your employer cannot tell you what to do with your own money or restrict what you can spend it on. Since it is your money, it goes with you when you change jobs.
