A study conducted by America’s Health Insurance Plans (AHIP) shows that Colorado ranks fifth in the nation for health savings account and high deductible health plan membership as a percentage of the state’s total private health insurance population. Nearly 218,000 Coloradans are enrolled in HDHPs with HSAs, which is 7.1% of the total enrollment in private plans.
We work primarily with people purchasing individual health insurance, and among our clients the percentage of people opting for an HDHP is much higher than 7%. Private health plan enrollment in Colorado includes everyone who has private group coverage through an employer. Employees typically have few options to choose from, and – especially if the employer is paying the premiums – will generally opt for a more benefit-rich policy if it’s available. In the individual health insurance market, the insured is paying the entire premium and price is a deciding factor for most of our clients. Some opt to go with an HDHP/HSA because it has the lowest premiums – not because the coverage is exactly what they had in mind. Others want the tax benefits that an HSA can provide. And some rarely need health care and are just looking for catastrophic coverage, so an HDHP (without the savings account) fits the bill perfectly.
The obvious drawback to an HDHP is the deductible – if you choose not to set up an HSA and don’t have a plan for paying the deductible if the need arises, a major claim could turn into a financial headache. Not the sort that you’d have if you were uninsured, but the relatively large out of pocket amount on an HDHP has to be taken into consideration.
But once you get past the deductible (if possible, save it up over time in an HSA and then forget about it), HDHPs offer a lot of peace of mind. Many of the policies have 100% coverage after the deductible, and the deductibles are per-family, so the maximum out-of-pocket is very easy to determine. And the benefits are often very high quality on an HDHP. In Colorado, the only individual health insurance policy that covers preventive colonoscopies is an HSA from Anthem Blue Cross Blue Shield.
For Jay and myself, keeping our health insurance premiums to a minimum while still protecting our financial situation in the event of a major illness or injury is key. So an HDHP/HSA is perfect for us. Even with our new family member arriving this month, we have no plans to have any other type of health insurance. I just hope that HSAs continue to be user-friendly and low cost in the future, and I’m sure that the number of enrollees is only going to increase as more employers search for lower-cost health insurance options for their employees.
