Open enrollment approaching – pair a high deductible plan with DPC to save money

Open enrollment for 2017 health plans starts November 1, 2016 and ends on December 15, with coverage taking effect on January 1, 2017. This is your only chance to make insurance changes unless you have a “qualifying event” (birth, death, or job change) during the year, and is the perfect time to take a look at your health insurance coverage and crunch the numbers to see how you can get the best health care for the lowest cost.

Be aware that if you choose not to purchase health insurance, you may have to pay a penalty. In 2016 that penalty was either 2.5% of your income, or $695 per adult ($347.50 per child) — whichever is higher.

That being said, there are ways to obtain required health insurance coverage at a lower cost by choosing a high deductible health plan (HDHP), also known as a catastrophic plan. A HDHP doesn’t start to pay for your health care until you pay a certain amount, or deductible. The least expensive HDHPs tend to have the highest deductibles, sometimes not paying until you meet the “out-of-pocket maximum,” which is $7,150 for individuals and $15,300 for families.

If you’re thinking: That’s a lot of money! You’re right - which is why these health insurance policies are called “catastrophic” – you don’t use them unless something very serious and unexpected occurs, like a hospitalization, cancer diagnosis, or surgery, which unfortunately can eat away your deductible in just one day of medical intervention. And once you have paid your maximum, you don’t pay another dime until the new insurance year begins, with no cap on payment. Even if your health care costs a million dollars (which CAN happen, believe me!), you don’t have to pay anything past your out-of-pocket maximum. And while these catastrophic plans have very high deductibles, the trade-off is that HDHPs tend to have much lower monthly premium amounts than conventional health insurance plans.

But what happens if you buy a HDHP and need to see a doctor for a routine visit, like a cold, or for blood pressure medication? That’s where Direct Primary Care comes in!

Direct Primary Care (DPC) practices charge a low monthly fee for your primary care needs. The average DPC charges $75 per month, which includes office visits, phone and messaging with your doctor, office-based tests and procedures, and very discounted blood tests and other office services. That works out to less than $1000 per year for primary care, much less than a HDHP deductible. DPC practices can also help with getting the lowest cost on medications, including wholesale medication pricing.

So to use my own experience as an example in crunching the numbers, last year I purchased a health plan for myself and my husband on the exchange. My options were a HDHP with a deductible of $13,700 at a cost of $11,592 per year (still an exorbitant cost!), or a conventional plan with a $1600 deductible at a cost of $20,100 per year. That’s a difference of $8508 per year. A DPC membership would cost both of us $1620, saving us $6888 if we didn’t need hospitalization or catastrophic care during the year. If we both DID require hospitalization (an unlikely scenario, but still always possible), then we would have to spend another $5212 than if we paid for the conventional health insurance.

Once healthcare.gov releases the 2017 numbers in a few weeks, I’ll go through the exercise again and post an update. The important thing is to be aware that we do have options when it comes to health care, and it makes sense to run the numbers to see how you can get the best health coverage for the lowest price. Pairing a HDHP with a DPC may make the most sense.