Why Physicians Should Consider a High-Deductible Insurance Plan, Ep #10

The average American spends more time planning a vacation than they do insurance planning. There aren’t a lot of big ticket items that need to be more carefully considered than health insurance.
And as we’re moving into open enrollment season, there are a few things you’ll want to know when it comes to choosing healthcare coverage for the following year.
Keep in mind that we will never tell a client what plan to choose. Our goal is to explain the pros and cons to help clients narrow down their options. We’ll cover the details you need to know to make an informed decision in this episode of Physician Cents.
You will want to hear this episode if you are interested in...
[1:12] What have your insurance needs been historically?
[5:05] Framing high-deductible health plans through an HSA
[10:42] The investment options with HSAs
[13:07] How to determine the best health plan for you
[19:17] HSAs convert into retirement accounts
What have your insurance needs been historically?
What have you needed from your health insurance coverage in the past?
Do you need coverage for monthly medications?
Are you being seen more often than just an annual check-up?
Are you dealing with ongoing health issues?
Do you have family members who may need great coverage?
If you know you’re planning on having a child in the next year, it may not be the best time to choose a high-deductible health plan and opt for something with a higher premium and lower out-of-pocket costs.
You need to do a personal risk assessment. If you have a bad health year, you can get hit with thousands of dollars worth of medical bills if you have the wrong insurance plan. So you have to take the available information and filter the policy options that your employer offers.
Listen to learn how we calculate the true cost of health insurance!
Framing high-deductible health plans through the lens of an HSA
The other factor to consider is that high-deductible insurance plans typically offer the option of a Health Savings Account (HSA). An HSA is a type of savings account that you can contribute to when you have a certain type of high-deductible insurance plan.
Individuals can contribute up to $4,150 and families can contribute up to $8,300 for the family per year in 2024 (you can contribute another $1,000 per month if you're over 55). In 2025, the contribution limits will increase.
Why would you want to consider a high-deductible plan with an HSA? You can deduct the contributions from your taxable income. This is something most physicians might want to do (to bring down their taxable income).
Secondly, once the money is in the HSA, it’s a savings account accessible to you for medical expenses. It also rolls forward to next year. It’s not “use it or lose it” like an FSA is. It’s a great source of emergency savings for medical expenses.
Some employers will entice their employees to choose a higher-deductible plan by offering to contribute money to your HSA (so find out if yours offers that).
If you pay any medical expenses with your personal savings and keep the receipts, you can reimburse yourself from your HSA at any point in time. If you’re good at keeping records, this could be a great choice. You can let the money in your HSA continue to grow.
Even better, an HSA is similar to a Roth IRA. You can choose to invest the money in your HSA. That money grows tax-free. After age 65, anything you pull out-medical or otherwise-is only taxed as ordinary income.
What else do you need to review during open enrollment? What other factors come into the decision-making process? Listen to learn what you need to think about.
Connect With Physician Cents
WealthKeel LLC: wealthkeel.com/
Olson Consulting LLC: www.olsonfp.com/
Tyler Olson on Twitter: / olsonplanner
Chad Chubb, CFP®, CSLP® on Twitter: / wealthkeel