We used to be just as impressed with HDHPs and HSAs, but – at least in Colorado – they have lost some of their appeal over the last few years because HDHPs aren’t as price competitive as they once were. Our own family had an HDHP and HSA for several years, but we switched a couple years ago to a new plan that is not HSA-qualified (we’re still allowed to have our HSA, and we are able to withdraw money from it if we need to pay medical expenses. But we can’t contribute any additional money to it unless we switch back to an HSA-qualified HDHP). The reason we switched was the premium. Our HSA-qualified plan was going up to $570/month, and the new plan we chose was $311/month (it’s now right around $400). HSA-qualified plans have one joint deductible for the whole family, and expenses like prescriptions are rolled into that unified deductible. That’s in contrast to the type of plan we have now, with a maximum out of pocket that allows for two family members to meet individual deductible and coinsurance limits (basically doubling the potential – although unlikely – out of pocket exposure). Our current plan also follows the recent trend of incorporating a separate prescription deductible that must be met before prescriptions are covered with a traditional copay. This type of plan has lesser benefits than an HDHP, and thus the premiums tend to be lower as well.
Several years ago, HDHPs were very popular among our clients in Colorado. But over the last few years, they’ve become much less popular, mainly because there are so many less-expensive health insurance options on the market now. HDHPs haven’t really changed in terms of design, but their premiums have climbed to reflect the rising cost of health care. In order to provide more affordable options, health insurance carriers have designed new plans with increased out-of-pocket exposure and lower premiums. Because HDHPs are relatively constrained by regulations regarding their structure, they haven’t been able to remain at the low end of the price scale in the health insurance market. In fact, many HDHP plan designs are now […]