Understanding the Blue Cross and Blue Shield of North Carolina's high-deductible health plan (HDHP)
By: | Posted: 22nd April 2009
The ins and outs of health insurance can be hard to figure out in any circumstance, especially when you're trying to find the best health plan for you or your family. PPO, HMO, HDHP, HSA - too many acronyms with not enough explanation. Many people in the United States believe they can't afford health insurance, specifically because they don't understand the various health plans. Blue Cross and Blue Shield of North Carolina's high-deductible health plan (HDHP) can be confusing at best, but it's worth knowing about the difference between a HDHP and traditional insurance.
What Is a HDHP?
HDHP stands for "high-deductible health plan". Traditional health plans generally have higher premiums than HDHPs. The monthly payments (or yearly payments) you make help pay your deductible. In addition, traditional health care plans have co-payment amounts for covered expenses.
Compared to traditional health plans, HDHPs have lower premiums and higher annual deductibles. They are also regulated by federal guidelines, adjusted annually for inflation, and are usually used in conjunction with a health savings account (HSA).
A HSA is like a savings account for future possible health expenses and is tax-free, but you have to have a HDHP to qualify for the health savings account.
HDHP Specifics
The IRS guidelines for 2009 state that a qualified high-deductible health plan has to have a minimum deductible and a maximum out-of-pocket. The deductible is how much you have to pay out for covered medical expenses before your health insurance starts paying; for 2009, the minimum is $1,150 for single coverage and $2,300 for family coverage.
Out-of-pocket expenses are how much you pay out during a benefit period before the health insurance company pays one hundred percent of all covered services. For instance, if your out-of-pocket is $4,000, then once you've paid $4,000 in medical bills covered by your health insurance, Blue Cross and Blue Shield of North Carolina will then pay 100% of any following medical expenses for the year. For 2009, the maximum is $5,800 for single coverage and $11,600 for family coverage.
Now, with a typical HDHP, you're also investing in the future. True, you will have a high deductible. This means that if you choose a HDHP, your health insurance for any covered services won't start until you pay the deductible. Until then, except for preventative care, you won't have any benefits.
Although this sounds like paying for something you're not getting, there is a big bonus. Once you reach your deductible, Blue Cross and Blue Shield of North Carolina will then be responsible for your covered expenses for the rest of the year, and you keep the lower premium. The premium is then the only expense you have to worry about.
The IRS regulations mean that, if you're single, you can't pay less than $1,150 or more than $5,800 before Blue Cross and Blue Shield of North Carolina has to start covering your medical expenses. Because of the Blue Options HSA plan, which goes hand in hand with a high-deductible health plan, you begin investing in your future health from the start. Any money left in your HSA at the end of the year is rolled over to the next year.
Most people choose high-deductible health plans, in conjunction with health savings accounts, for just that reason. Nobody expects to need health care services, especially when they're young, but life - and accidents - do happen. By preparing for the possibilities, you're also preparing for monetary security as you grow older.
Many older individuals have saved for retirement, only to spend their last dime when health issues get in the way. Blue Cross and Blue Shield of North Carolina is the leader in medical insurance. Their high-deductible health plans and savings accounts add the ultimate safeguard for your peace of mind.Goebelt Insurance is a leading provider of health insurance from blue cross blue shield of north carolina. Visit us today at http://www.goebeltinsurance.com/ for a free rate quote from BCBSNC and information to help secure the health of your loved ones.This article is free for republishing
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