Comparing HSA's

[Briefcaseboy]

HSA qualified health plans have a high deductible with lower premiums. The amount saved on the lower premium then allows the insured to put more money in his/her savings account ? I compared the BCBS HSA rates with the PPO rates and did not see a nickles worth of difference. I called BCBS and asked them about this and they said, hmm you are right, call the sales and marketing dept. and ask them about it. Well, I didn't call because it wouldn't make any difference anyway. What is your take on this ?

 

[Yagents]

HSA qualified health plans have a high deductible with lower premiums. The amount saved on the lower premium then allows the insured to put more money in his/her savings account ? I compared the BCBS HSA rates with the PPO rates and did not see a nickles worth of difference. I called BCBS and asked them about this and they said, hmm you are right, call the sales and marketing dept. and ask them about it. Well, I didn't call because it wouldn't make any difference anyway. What is your take on this ?

Some companies, the prices are the same, other companies, the HSA's are cheaper (BCBS AZ for example) Assuming the premium is the same, here is what I see occuring:

1. The "Trade off" - PPO has higher out of pocket risk, in exchange for cheaper doctor visit and Rx copays. HSA's have lower out of pocket risk, in exchange for no copays. Claims are essentially the same, the effects on your clients depend on the plan they choose, and the health conditions experienced.

2. Hit HSA deductible - companies are realizing that once a client hits their HSA deductible, they have 100% coverage and their utilization goes up, and they don't care about price anymore. PPO plans have continued shared cost system, and copays forever.

Ex: I hit my family hsa deductible this year, and now have prev care bene's that we're now using, and I don't hesitate to take kids to doctor if things escalate.

 

[Ann H]

It's not always true that an HSA is priced very close to a PPO. Rates vary widely between insurance companies, and even in demographic bands. For instance, the price variance for a couple age 62 is different than for a couple age 32 with 2 kids. Also, their needs may be different, and their outlook on risk tolerance and asset management may be different.

When I discuss insurance choices, I often tell my clients there are two rationales. The mathematical logic, and the "common sense" logic. The choice of plans has to make mathematical sense. But if it crosses a line where it is no longer "common sense" for that family's situation, it loses its value. At some point, the client feels like they have no insurance, no value, and no reason to purchase it. It's a balance between math and a common sense feeling of protection and value.

Here's comes a broad generalistic statement!! HSA's seem to fit better for people who are older, financially established, who have investment acumen, and who are healthy. They often understand insurance risk tolerance better, and they understand how to self-insure the smaller claim, while protecting themselves against the catastrophic claim. The price variance between PPO's and HSA's is often greater at this age band anyway. That's not because the risk is less. It's because the premium is higher, therefore a percentage of price variance between the two plans results in a greater dollar amount, which then results in a wise choice to bank those dollars and self-insure for the deductible.

If a family is looking at a long-term outlook, an HSA is better. But most young families are doing well just to manage today and this week. They'd rather have the copay. Mathematically, it's not the best choice, but it's common sense for their situation. Looking at it mathematically, would you rather pay $30 for every PCP visit (when the actual charge is likely to be only $50 to $60), and pay $60 for every Specialist visit (when the actual charge is likely to be only $60 to $90), or would you rather have those charges apply to your deductible, and then you have 100% coverage thereafter (as most HSA's do). (Note - I am using prices for AZ, at the typical insurance company contracted prices, and it may be different in other states).

They say that 50% of all insured people have less than $500 in medical services a year (not including preventive care). For that small claim, you actually save more in premium than you are paying for your services if you take the HSA, especially when you factor in the tax savings. For the catastrophic level claim, you're much better off taking the HSA. If you have cancer, why pay a copay for every Specialist visit, when you have met your deductible already? For the medium sized claim, it's often a toss-up about which is better.

On top of that, you have tax deductibility, and the ability to use your tax-favored account for other types of qualified expenses like dental and vision.

Sooooo... if you have an analytical client, they can often see the benefit in taking an HSA even if the price variance is small. If your client isn't that analytical, just sell the copay plan. They'll never understand an HSA anyway.

 

[ABC]

Almost every H.S.A plan is on a PPO network. I use the term
"traditional co pay plan" when comparing the H.S.A.
There is no reason trying to confuse people.

When comparing vs co pays you really need to understand what kind of co pay plan you are comparing.

I stress the network discounts on office visits compared to a $25 co pay. If the person is worried about RX then you will not get them approved anyways.

 

[Bob_The_Insurance_Guy]

Briefcase Boy,

You are selling it the wrong way.

Selling something on the basis of "being cheaper" does not work with HSA's.

They are there, not to be cheaper, but to limit exposure, and provide control of one's health care expenditures.

Show people how the copays, deductibles and coinsurance adds up vs. negotiated rates and rollover fund to pay for large medical expenses, and HSA's will win almost every time.

 

[taterpeeler]

Briefcase Boy,

You are selling it the wrong way.

Selling something on the basis of "being cheaper" does not work with HSA's.

They are there, not to be cheaper, but to limit exposure, and provide control of one's health care expenditures.

Show people how the copays, deductibles and coinsurance adds up vs. negotiated rates and rollover fund to pay for large medical expenses, and HSA's will win almost every time.

no offence bob, but here in texas and as an internet salesman not ever seeing a client we cant get into deep deep discussions on theroy of HSA plans. in the great state of texas we have hsa plans some 150/200 a month cheaper than copay plans... sell it on price if you are an internet guy... if u are a lemme come see u mode then you can whup out the yellow pad and draw it up for em

 

[ABC]

no offence bob, but here in texas and as an internet salesman not ever seeing a client we cant get into deep deep discussions on theroy of HSA plans. in the great state of texas we have hsa plans some 150/200 a month cheaper than copay plans... sell it on price if you are an internet guy... if u are a lemme come see u mode then you can whup out the yellow pad and draw it up for em

What you don't have 5 minutes to explain the basic concept of the H.S.A to a prospect?

 

[taterpeeler]

What you don't have 5 minutes to explain the basic concept of the H.S.A to a prospect?

No, thats not it... there is to high a probiabilty of loosing the client to the next website if at any point you loose the consumer in a discussion different than their "creatures of habit" thought process.

On renewal is where the education of the cliet takes place.

this is the primary reason i feel selling add on products wont work on self generated internet or shared internet leads.

in this HCR cycle the KEY is volume and at any point you confuse the consumer you are toast

 

[YouGotMyMoney]

No, thats not it... there is to high a probiabilty of loosing the client to the next website if at any point you loose the consumer in a discussion different than their "creatures of habit" thought process.

On renewal is where the education of the cliet takes place.

this is the primary reason i feel selling add on products wont work on self generated internet or shared internet leads.

in this HCR cycle the KEY is volume and at any point you confuse the consumer you are toast

correct 100% correct

people would be wise to follow peeler's advice

u confuse em u lose em

 

[Yagents]

I disagree, teach them to fish the first time, and they stick like glue. Plus, they know how to combat agents who strictly sell on price, and come to you for advice before making any changes. I rarely lose a client to another agent (maybe 2 in 8 years), I only lose clients due to life changes.