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Cheap vs. Value Insurance

3 min read

30 sec brief

Comparing insurance plans is about as easy as deciphering Egyptian Hieroglyphics. The verbose terms and legal jargon might as well be in a foreign language. The language is designed to confuse you. It can mask important cost scenarios that will affect your out-of-pocket expenses.

Comparing insurance plans is about as easy as deciphering Egyptian Hieroglyphics. The verbose terms and legal jargon might as well be in a foreign language. The language is designed to confuse you. It can mask important cost scenarios that will affect your out-of-pocket expenses.

Heatlth Insurance Value

Finding the best and cheapest insurance is a common goal. Understanding the difference between cheap vs. value insurance could equate to thousands of dollars in out-of-pocket medical expenses this year (and in years to come).

What is Cheap Insurance?

So what is cheap insurance? Cheap insurance is simply the lowest cost insurance you can buy on state healthcare exchanges or from your employer. This will create the lowest expected out-of-pocket costs to cover monthly premiums. These plans will typically have higher deductibles, but also have cheaper monthly premiums.

What is Value Insurance?

Value insurance ensures you are covered for unexpected (and likely higher cost) medical expenses, without having above average monthly premiums costs. These unexpected costs can arise from things like:

  • Out-of-Network Care
  • Out-of-Pocket Maximums
  • Deductible Amounts (before insurance kicks ins)
  • Co-Pays

All of these costs (or cost scenarios) have one thing in common, they are paid directly by you, not your insurance provider.

How to Compare Cheap vs. Value Insurance?

Cheap and value insurance differ in one key way, medical coverage (and medical coverage costs). Value insurance should limit any expected and unexpected out-of-pocket medical expenses. These costs can have a direct impact on your lifestyle and bank account balance. If you want to limit your financial risk and exposure make sure you read the fine print and do the often tedious cost scenario planning for all of the “just in case” situations that might arise. Health insurance should be designed for all of the “just in case” scenarios. Don’t fall victim to the fine print and select a cheap insurance plan that won’t be there for you when you need it most. Invest in your health® and find a value health insurance plan.

One more thing, on top of any insurance plan restrictions that might affect your out-of-pocket medical expense, make sure your health insurance plan structure doesn’t limit adding additional health benefits, like an HSA. You can read more about HSA-eligible health plans here.

How to Make Your Insurance More Valuable (at no cost to you)

Speaking of an HSA, it is the only available health benefits on the market that allows you to save pre-tax dollars for medical expenses for this year and years to come. It will ensure all of your “just in case” expenses are covered for the years to come. This includes any health costs (on top of Medicare) in retirement. HSAs are the health benefits value option for your health savings future.

The value vs. cost scenarios assigned to health insurance will have subtle nuances for different lifestyles and financial experiences, but this should help you get started. Ensuring you review all the fine print, no matter how foreign the language seems, will help you prepare are all of the “just in case” scenarios and select value health insurance.

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.

About the author

Lively

We are HSA Experts! Lively is a Health Savings Account (HSA) platform for employers and individuals. A 401(k) for healthcare.

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