The health insurance industry is very unique. When you compare it to other types of insurance, you will find that most types of insurances are based on the catastrophe.

Your auto insurance does not cover new tires or oil changes. Your home owners insurance does not pay for a new paint job or if your oven breaks down.

Somehow, health insurance pays for doctor visits (new tires) and prescription drugs (oil changes). These two benefits are what add most of the cost to a health care plan.

With health insurance you pay for these benefits whether you use them or not.

This is why health savings accounts (HSA) make a lot of sense. The HSA, is used in conjunction with, a High Deductible Health Plan (HDHP). The deductible, as you might guess, is higher and only covers the doctor visits and prescriptions after you meet that deductible. It protects you from the catastrophic loss and kind of puts you in control of your health care dollars. They often times cost half as much as a co-pay plan would cost. Read the rest of this entry »