The current state of the Connecticut health insurance market 2008
Premium increases coupled with reductions in benefits via higher co-pays and deductibles have created new trends in health insurance purchasing. Rather than paying a high premium for a traditional HMO plan, more and more people are opting for high front-end deductible type plans. This is especially true for people over age 50 or people who have dependent coverage.
The reason these high deductible plans make sense is that often the premiums you save in a year exceed the amount of the deductible. If you don’t have significant medical expenses, you may not spend all of the savings. Even if you have a bad year and meet the deductible, you are probably still better off when you consider the premiums that you saved plus the co-pays and/or hospital-surgery deductibles you would have paid with the traditional plan. Some high-deductible plans pay 100% of covered expenses once the deductible is met and also cover routine preventive care 100% before the deductible is met. There are also some powerful tax incentives for opting for these types of plans. With a high deductible plan you may establish a Health Savings Account and contribute up to $2900 for a single/$5800 for a family. This contribution is tax deductible, and you are able to accumulate unspent funds to be used in future years.
The other trend for self employed or small business people is to purchase high quality individual plans rather than the more expensive group sponsored plans. The employer sponsored plans are more expensive because they cannot refuse coverage for people with pre-existing conditions and they are required by law to cover things that individual plans do not (maternity coverage for one example)
For people healthy enough to qualify for the individual type plans and for those who take a high front end deductible the cost savings can be substantial while actually improving the coverage!
