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Tips for Moving From PPO or HMO to HDHP

Vicky Warren · June 6, 2019 · 4 min read

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High Deductible Health Plans (HDHPs) are so popular right now. As employers work to balance the cost of providing health insurance to employees, they’re offering more HDHPs. Many of the marketplace plans, purchased by those who are self-employed and others, are HDHPs.

No matter how you get there, many are making the transition from traditional plans such as PPO’s and HMO’s to HDHPs.

Traditional plans and HDHPs are different. However, with some planning and health insurance know-how, you can make the switch work for you.

Here are some tips for your new HDHP.  

Schedule your preventative care

Here’s an unsettling fact, many who have HDHPs use less healthcare than those with traditional health plans. For many, it’s because they fear the price of care with an HDHP.

It’s important to remember that the Affordable Care Act (ACA) includes mandates for preventative care to be provided – at no cost to plan holders. That’s right, you don’t have to pay a co-payment, co-insurance, and you’re eligible even if you haven’t met your annual deductible.

Preventative care is divided into three categories. All adults, women, and children. With over 50 covered services, it’s smart to know what services your eligible for at no cost. There are several services included, like:

  • Immunizations

  • Diabetes screenings

  • Cholesterol screenings

  • Vision screening for children

  • Blood screening (for newborns)

  • Many more…

They say “prevention is the best medicine,” and it’s true. Schedule your preventative care appointments to catch any issues early.  

Open and use an HSA

One advantage HDHPs have is that many can be paired with a Health Savings Account (HSA).

An HSA is an account you can use pre-tax money to pay for qualifying medical expenses.

There are a few things you’ll have to do to qualify for an HSA. First, be sure your plan is HSA eligible. Most insurance sites and state marketplaces make it pretty clear if a plan qualifies, but if there is any doubt, ask.  

To qualify for an HSA, you must:

  • Be covered under a high deductible health plan (HDHP), described later, on the first day of the month

  • Have no other health coverage except what is permitted under other health coverage

  • Not be enrolled in Medicare

  • Not be claimed as a dependent on someone else’s 2018 tax return

You can use your HSA to pay for many things related to your healthcare. For example, you can use the funds to pay for office visits and prescriptions. You can pay for chiropractic care, dental care, eyeglasses, and so much more. However, you cannot use HSA funds to pay for monthly premiums.

Treat healthcare like every other large purchase you make

Healthcare is one of the highest expenses most of us have. Of course, if you’re reasonably healthy, it may not seem that way right now. However, life happens.

It’s essential to approach healthcare like every other large ticket item you buy.

Become a savvy healthcare shopper. Don’t be afraid to ask how much services, prescriptions, and procedures cost. If you don’t understand your bill or explanation of benefits (EOB), reach out and find the answers. This is a new approach for many of us. Don’t fear, given the amount of money we pay for healthcare, you’ve got every reason to know what you’re going to pay.  

Moving from a PPO or HMO to an HDHP may feel a little intimidating at first. Once you learn the new plan, schedule your preventative care, become familiar with coverage, and have a solid savings plan in place, you’ll be ready!

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Vicky Warren

Vicky Warren

Vicky Warren, once a nurse, now a freelance healthcare writer and social media coach.

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Disclaimer: the content presented in this article are for informational purposes only, and is not, and must not be considered tax, investment, legal, accounting or financial planning advice, nor a recommendation as to a specific course of action. Investors should consult all available information, including fund prospectuses, and consult with appropriate tax, investment, accounting, legal, and accounting professionals, as appropriate, before making any investment or utilizing any financial planning strategy.

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