Depends. In cases where the employer offers a HD plan as an option alongside a similar non-HD plan, the employee share of the premium may be set low enough that the difference in premium plus the OOP maximum if you are a heavy user is similar to or lower than the premium of the non-HD plan, so that the employee comes out ahead if s/he is healthy and does not have much medical costs, but is not worse off if s/he is a heavy user.
But obviously, this is not always true, like with what @uwalummom sees which is obviously just a benefit cut.
Be careful with what you call a “benefit cut.” From the employer’s perspective, it might not be a cut at all. Suppose I’m an employer buying insurance. Last year, premiums were (making up numbers here) $10K per employer per year, and I charged employees $1K per year. This year, premiums are $13K per year, and I charge employees $2K. From the employee’s point of view, that might be thought of as a benefit cut, but from my point of view last year I was paying $9K and this year I’m paying $11K. I the employer don’t think it’s a benefit cut.
Not necessarily true. A few months after we started on our HSA plan the kid broke his leg. Suddenly we where on the hook for the big family deductible. After it was all said and done, I calculated out the difference between the HSA plan and what the standard PPO option would have cost. Guess what – break even. It’s really just a shifting of costs – pay now, each and every month in your increased premiums. Or pay later via the high deductible when you actually use it. The key is being disciplined enough to put money into the HSA account. You can also manage the years the deductible hits by accelerating/delaying care around the end/beginning of the plan year.
When my H’s employer went with a high deductible plan with a HSA, they had a spreadsheet to compare plans. Our health care costs are basically the same every year (in that we will hit our maximum OOP every year as H has some chronic health problems). In every case, the high deductible plan was cheaper for us than a traditional plan. It just moves around how we pay for our care. My H’s employer self insured and we are very lucky in that they pay for the HDP plus contributes $1500 to the HSA.
We have a HD plan with low premiums, $3000 deductible and $6000 out-of-pocket limit. We compared it with another PPO plan and it turned out that with HSA our plan costs about the same or less even when we pay the limit. And of course in the years when everybody is healthy we save a lot. As an added benefit, once you hit the limit, everything is free. In the year when my husband needed two surgeries, I had a lot of nice-but-not-quite-necessary physical therapy.
@surfcity you should delve deeper into your plan documents. My daughter is on a tier 3 as well ($1100 a month, of which we pay 80% after deductible), and was on a tier 2 that at one point that was $1600 per month at the age of 15. We are in the process of requesting they cover the tier 3 at the tier 2 percentages (doesn’t actually matter this year, we’re already within $500 of the maximum) because her psychiatrist deems it medically necessary. The process is the same as “prior authorization” for a drug that’s not covered (or you need to exceed their limits).
With one child hitting the maximum every year, high deductible is most favorable for us - plus if we funnel most of the cost through the HSA, we get a tax deduction for it. With the new tax code, fewer families will be eligible to claim medical expenses as an itemized deduction. It does mean those shocked looks at the pharmacy counter in January when the deductible resets (well, not anymore because our pharmacists know us by sight).
I had a prescription for Vitamin D for which they would only give me the pills a month at a time - every time I went it cost something different - no change in our insurance. No one at CVS could explain it either. I think it’s like the cost of an airline seat - it’s really arbitrary.
I am a pharmacist and was surprised to learn that an insurance contract clause may prevent the pharmacist from letting you know that a cash price is less than insurance copay without you specifically asking. One family RX went from a $15 copay to $9 cash. The app for cheap prices helped. Sorry to see that we cannot always go to the same pharmacy where we are known by pharmacist. Price I see on Hospital invoices are often very different from retail pharmacy costs due to contracts. Then we have the shortages and mergers that cause price increases. So sad
We are in a high deductible, HSA eligible plan. Generic meds that cover chronic conditions or are “preventable “ care cost us $0 if we use the mail order pharmacy for 90 day supply. I take Evista as a breast cancer survivor. It used to cost me about $125/month as a tier 3 drug. Now it’s approved for bone loss prevention and costs me nothing. Same thing for several of my husband’s meds.
Aetna has a tool on their website where you plug in your expected expenses and it calculated the best choice for us. I was surprised when it suggested a high deductible plan. It has proved to be accurate and we have saved money. My expenses are very low but DHs are very high, so he hits OOP max nearly every year. Plus our HSA can cover things like contacts without having to enroll in separate vision insurance.
I realize not everyone has the choices that are best for them, but for many people the high deductible plan saves money.