Are You Paying Too Much For Health Insurance?

Are You Paying Too Much For Health Insurance?

Michael J. Hilts, M.D. 

Hilts Direct Primary Care 

(Disclaimer: I am not an insurance expert, and the opinions below are based on my own personal experience with health plans. I highly recommend that you consult with your insurance specialist for specific details regarding your own situation.)

We all want to do what’s best for our families (or for ourselves, if we’re solo!).  Without really thinking about it, over the years I have always chosen the most expensive health insurance plan during open enrollment month, thinking that for my family, I’d gladly pay extra.  But in the past couple of years I have learned that “most expensive” does not necessarily equal “best”!

Let’s go through a real-life example, using a company-sponsored (company not to be named) health plan from a couple of years ago.  

We will compare two plans:  the most expensive “Cadillac” plan, and the least expensive “High Deductible” (HDHP) plan.  Both plans will generally cover the same services, but the difference is in the amount that you, the patient, will pay out of pocket.

First we will look at the premiums.  This is the amount you pay out of pocket each year simply to have the plan.  Let’s look at actual numbers:

Cadillac plan:  $6,318 per year (for family) or $2,236 per year (individual).

HDHP plan: $3,562 per year (for family) or $1,378 per year (individual).

Cost savings:  $2,756 per year (for family) or $858 per year (individual).

Keep in mind that the premium is money you have to pay.  You can never get it back.  

Side note:  Here’s the yearly cost for a Hilts Direct Primary Care membership (remember that DPC is not insurance).  Notice that in each case, the above savings will generally pay for your DPC membership!

• Family of 4:  $2,160 or $2,520, depending on age of parents (both under 65).

• Individual: $780 or $960, depending on age.

So you might be thinking something like this:  “That’s great, it would certainly be nice to save that much in premiums every year.  But having a high deductible scares me.  What if we (or I) have a really bad year health-wise, and have to max out our insurance?  I don’t want to have to pay too much out of pocket!”

Let’s look at actual numbers using the same two plans, assuming that your family (or you as an individual) has the worst health year ever.  Perhaps a car accident with surgery and a stay in the intensive care unit, and a bill of over $100,000.  How much will you pay out of pocket in each scenario?  In the example below, “out-of-pocket maximum” (OOPM) is the maximum amount you will pay out of pocket once you have met your deductible and your insurance is helping with payments.  

Cadillac Plan (family):         $6,318 (premium) + 600 (deductible) + $15,800 (OOPM) = $22,718 total that you will pay out of pocket that year.

Cadillac Plan (individual): $4,862 (premium) + $300 (deductible) + $7,900 (OOPM) = $13,062 total out of pocket for the year.

Let that sink in for a minute.  In each case for the Cadillac plan, that’s a lot of money!

Here’s where it gets really interesting!  Let’s look at the HDHP plan in the worst health year ever:

HDHP (family):     $3,562 (premium) + $2,800 (deductible) + $8,000 (OOP Max) = $14,362 total out of pocket for the year.

HDHP (individual):     $1,378 (premium) + $1,400 (deductible) + $4,000 (OOP Max) = $6,778 total out of pocket for the year.

In either case it’s a lot of money to spend, but look at the difference!  You’d pay $8,356 less than the Cadillac plan as a family that year (in the HDHP plan), and $6,284 less as an individual!  

Maybe you’re still afraid of the high deductible and are reluctant to change plans.  Perhaps you’ve always thought it was good to have a low deductible so that you could meet it sooner and your insurance would “kick in” and start paying.  But the reality is that if you’re regularly meeting your deductible each year, there’s a good chance you’re spending too much on health care!  So instead of being frightened by an HDHP plan, I would propose that you look at the high deductible as an opportunity.  It’s a chance to SAVE money that you would otherwise be guaranteed to spend in a Cadillac plan.  

This is where Direct Primary Care comes in.  One of the aims of Hilts DPC is to maximize value for the patient.  With a Cadillac plan and with an HDHP plan, patients are generally “discouraged” to come see the doctor by having to pay a copay in each case.  But with a DPC membership, you are encouraged to see your doctor regularly.  There’s no extra copay with your DPC membership, so there’s not a disincentive to come in.    Your DPC doctor wants to get to know you well and to address any issues you may be having before they become big problems.  He also wants to help you to work on lifestyle changes in order to achieve optimal health.  In addition, by paying cash for your medications, labs, and imaging studies that we can get at amazing discounts, you no longer have to worry about trying to meet your deductible each year!  Plus, if you combine the HDHP plan with a health savings account (HSA), then you can pay for any extra expenses with the HSA and get a tax break. (Consult with your accountant about whether you can use the HSA for DPC-related fees). 

So I encourage you to take a close look at your insurance plan this fall, and decide whether it’s time to make a change.  Those with Medicare who have supplemental “Medigap” plans might be able to make similar changes to their insurance coverage.

DPC is not just about financial savings. I would argue that the most important aspects of DPC are the time you get to spend with your doctor, and the accessibility offered by this model. What value do you put on your health? Remember that a DPC membership can be an important, valuable addition to your health insurance.  Hilts Direct Primary Care will be opening September 1, 2022, right before open enrollment begins!  Pre-enroll and reserve your spot right now while space is still available!

Visit our site for more information and to pre-enroll: https://hiltsdpc.com/