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How Do Traditional Plans Compare to Consumer-Driven Health Plans?

We are seeing more interest from our clients concerning consumer-driven health plans. Because they differ from traditional plans, our Hanneken Insurance Agency Inc. agents in Little Falls, MN offer a few clarifications.

What Are Consumer-Driven Health Plans?

Consumer-Driven Health Plans (CDHP) are high-deductible plans that cover a portion of healthcare services and are paid out with pre-tax dollars. These high-deductible plans have increased annual deductibles and maximums than a traditional health care policy does. However, you will actually pay lower monthly premiums. That being said, expect to pay more out-of-pocket for healthcare before the CDHP coverage begins.

How Do CDHPs Work?

Those with CDHPs go to their physician and pay for the services via a three-tier payment system. First, payment comes from an HSA, which is a pre-tax savings account that may be self-funded or through an employer. HSA are investment accounts that are funded with an investment account. This account rolls over indefinitely even if you change employers, as you own it. When you meet the deductible, your plan’s coverage kicks in.

How CDHPs Compare to Traditional Insurance Plans

Lower monthly payments or annual premiums are the primary advantage of CDHPs compared to traditional health care plans. Because the deductible is higher, you’d think they cost more than other policies. However, insurance statistics from the Health Care Cost Institute have disclosed that CHDPs can save consumers an average of $540 annually.

Need Advice on Choosing The Right Health Care Coverage?

Health care has become more complex and costly, so you’ll want to be sure to choose the right plan for you. Get advice and compare policies to find one that best serves you and your family’s needs here at Hanneken Insurance Agency Inc. in Little Falls, MN.

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