In selecting a health insurance plan, first consider these three ideas:

  • You need insurance for the average hospital bill of $30,000, a cancer treatment of $200,000, or accident/fall and spinal cord injury $690,000.
  • Large bills are the #1 reason for losing home or personal bankruptcy.
  • The Bronze 60 HDHP (High Deductible Health Plan) is the most cost-effective way to protect from large medical bills when paying with tax-free dollars from a Health Savings Account (HSA).

  • Most Americans are pretty healthy; a few are very sick.
    • People who are very sick
      • 3% of Americans account for 50% of all medical bills!
      • 25% of all healthcare expenses come from five conditions: diabetes, coronary heart disease. congestive heart failure, asthma and depression.
      • Diabetes costs average over $10,000/year; insulin is very expensive
      • Asthma and depression: medications: $100/month up to $400/month
    • People who are healthy
      • 73% of Americans spend less than $500/year on medical expenses
      • 33% spend $0 each year

  • Some prefer getting the Bronze 60 HDHP and then “self-insuring” or paying cash for the routine and expected medical bills. They can save tax-free dollars in a Health Savings Account (HSA) to pay current and future medical expenses.
  • Some prefer to pay a higher premium to get a plan with a lower deductible and low copays for doctor visits and prescriptions that make it less expensive at time of service.

Our Plan Recommendations for 2022

1. We recommend the Bronze 60 HDHP for most of our health insurance clients  

The Bronze 60 HDHP PPO—a High Deductible Health Plan (HDHP) with a $7,000 deductible and no copays makes this the most affordable plan on the market. You pay all expenses up to deductible, the insurance company pays all costs over deductible.

  • Because there are no copays, you are allowed to open a tax-advantaged health savings account (HSA) to pay health care costs with tax-free dollars. Think of the HSA as a medical IRA or 401k for healthcare.  An individual can save up to $3500 tax-free dollars in a Health Savings Account (HSA) each year, and use some of that money to pay for routine and expected medical expenses, as well as dental and vision costs. You can also save for the substantial retirement health care (a couple from age 65 to final years will spend about $225,000 on healthcare). A family can save $7,000/year.
  • NOTE: In 2015 I wrote the cover article for our national insurance journal explaining why nearly everyone can benefit from having a Health Savings Account (HSA). If you would like to really understand the benefits of an HSA, Click Here to read “The Case For HSAs”.

2. If you prefer to pay a higher premium for the convenience of low copays and a lower deductible  (or you have more frequent medical expenses)

The Silver PPO — a moderately priced plan with low copays for most medical services and prescriptions.

  • For hospital and surgeon, you pay a $4,000 deductible, and then 30% of remaining bills up to $7,800.
  • For most other services, you will have an affordable copay.
  • If you take one or more expensive brand name drugs, a Silver level plan with low copays for brand prescriptions is a good choice. For example, if the expense for the asthma medication Advair ($400/month) was subject to the deductible, the annual cost would be $4800/year.  On the other hand, if the copay is $50, the annual cost would be $600/year. Since both the Silver and Gold plans have comparable brand name prescription copays, it makes sense to select the less expensive Silver plan as it is more cost effective.

The Silver HMO is new in 2022. When you have an HMO plan, you will have a lower premium but more restrictions:

  • You can only use doctors at Sansum Medical Clinic.  If you see providers outside Sansum, you will need to pay cash for those services.
  • You need to select a primary care doctor who will handle your medical needs.
  • To see a specialist, you need to be referred by your primary care doctor.
  • There are low copays for most medical services and prescriptions.

3. If you have an expensive medical condition, with numerous medical expenses that count towards your deductible

The Gold 80 plan is an excellent choice when you have a combination of prescription costs, as well as expenses that go towards the deductible.  This plan might be a good choice for a person with Type 1 diabetes.

Note: For those who only use Sansum Medical Clinic providers, there is a Gold HMO plan.

ImportantImportant Note: If you are at the lower income levels and qualify for cost sharing subsidies through Covered CA then the Silver 73, Silver 87 and Silver 94 are often the best values on the market. If you qualify for one of these plans, you should take it. But not always . . .

  • Consider this idea: If you qualify for a one of the subsidy plans on Covered CA and you are in good health, you should still consider getting the Bronze 60 HDHP HSA-qualified plan. The premium is less and you can put those premium savings into an HSA. Ask yourself, “Is it better to put money into HSA or to pay additional premiums to get richer benefits?”  And when you put money into a health savings account, remember you get a tax deduction that will lower you adjusted gross income; this lower income will result in a somewhat larger subsidy.
CONTINUE TO STEP 2: APPLY