When we first switched to an HSA qualified health insurance policy in 2007, we had a $3000 family deductible (our family back then was just my husband and myself). In 2009, we raised our deductible to $5000 in order to reduce our monthly premiums, after a couple of years of rate increases. Now we’re doing it again, and raising our deductible to $7000.
After we added our second son to our policy this spring, the premiums climbed to $573/month for our $5000 deductible policy. We looked at options with other carriers, but there were no better deals available. So we decided to see if raising our deductible again would make sense. The new premium will be $438/month, which means we’ll save $135/month, or $1620/year. The trade off is that our potential out-of-pocket exposure will be increasing by $2000/year.
That’s a trade that I’m happy to make. In the last decade, we’ve only used our health insurance twice, other than routine physicals. My husband had knee surgery in 2008 (the only time we’ve ever met our deductible), and our son had to have stitches last year. The stitches incident came to $1400, which we had to pay in full since our deductible was $5000 (we now have an accident supplement that will reimburse us up to $5000 if we have a claim that is a result of an accident or injury).
We’re a pretty healthy bunch, and our track record of not needing to use our health insurance is pretty good. Of course, nobody knows what tomorrow will bring, which is why I would never go without insurance. But chances are, we’ll come out ahead with our new deductible. Here’s the way we look at it: If we keep our $5000 deductible, we’re guaranteed to have to spend that extra $1620/year in premiums, and we might save $2000… if we have a claim that is more than $5000 (a claim that’s less than $5k would be the same either way – we’d be paying for it ourselves with either plan). If we go up to the $7000 deductible, we’re guaranteed to save the $1620/year, and we might have to spend an extra $2000… if we have a claim that is more than $5k. Given how close $1620 is to $2000, I’ll take the option that guarantees us the savings rather than the option that guarantees that we’ll be spending the money.
We’ve been contributing to our HSA ever since we opened it in 2007, so we do have the money to cover the deductible. If we didn’t, this would be a different story. And higher deductibles don’t always make sense – you have to crunch to numbers and see if they make sense. If you’re only going to save $200 a year for increasing your deductible by $2000, you’d have to go ten years without meeting your deductible in order to come out ahead. But in this case, as long as we don’t end up having to meet our deductible every single year, we’ll come out ahead.
So as of July, we have a $7000 deductible, and our premiums will drop to $438 a month. What do you pay for health insurance, and what’s the highest deductible you’d be comfortable with?