You can always shop for and secure a California health insurance plan with a lower annual deductible. But should you? California health insurance plan shoppers who are fans of the Vitality Blog will see us talk often about having or creating a California health insurance strategy that is uniquely right for the client.

A California health insurance strategy can refer to the selection of a PPO plan vs. a HSA-compatible health plan or perhaps deciding to go with a HMO plan for the health coverage you believe is uniquely right for you and/or your family. It can also refer to your decision to go with a health plan that may seem to be more appealing – based on a lower annual deductible.

We say ‘seem to be’ because if you’re transitioning from a group health insurance California plan offered by a previous employer to your first ever individual California health insurance plan, you may have grown used to a certain lower annual deductible as featured in your group health plan.

Now that you’re shopping for an affordable individual or family California health insurance plan, you may have seen some annual deductible figures that…well…shocked you. Here’s where your mindset about what an annual deductible is and the role it plays in your selection of the health plan that’s right for you might need a bit of reconsideration.

As we said above: You can always shop for and secure a health plan with a lower annual deductible. But should you? When it comes to your California health insurance strategy, the big decisions are usually always centered around one topic: How much of the cost for your family’s health care are you willing to shoulder and how much do you expect the insurance company to bear? The more you are willing to pay on your own, the greater likelihood your monthly premium will be lower. Now you might be thinking: Well if that’s the case, why do I even need health insurance?

We all need a California health insurance plan for the same reason: The costs of health care services in this country are expensive. And getting more expensive with each passing day. Medical bankruptcies are a very real danger for Americans. When you are thinking about the right strategy for your first – or next California health insurance plan – it might save you money to think about strategies that you can put in place to pay for major medical events like a serious illness or injury. Think surgery and extended hospital stays. If you’re strategizing about paying for the ‘big’ medical events like surgeries, hospital stays, and so forth, you are creating a strategy where you’re limiting your major financial exposure each year. For smaller medical events – a sprained ankle – you’ll need to ask yourself whether or not you expect each year to be a ‘bad year’ when it comes to seeking health care services. You might go a year or two and not need the lower annual deductible you’re paying higher premiums for. So – when you’re creating the strategy that works for you when it comes to an ankle sprain or a sore muscle it will be important to think about how you and your family really use your health care services.

In short: Pay higher premiums and gain quicker access to coinsurance benefits that will help pay for the bumps and bruises of daily life. Pay a lower premium; be prepared to spend more of your own money on minor health issues but have the peace of mind that comes with knowing you have insurance coverage for the major illness or injury that can cost a lot of money.

What if there was a way to go with the cost advantages of a high annual deductible health plan and still have a consumer friendly component where the health care dollars you’re spending were funds you received a tax deduction for? There is! It’s called a HSA-compatible health plan: This plan features a high deductible health plan linked to a Health Savings Account. The amount of money (Up to specified limits.) you place in a tax advantaged HSA each year receives a dollar for dollar income tax deduction for that tax year. In essence, the government is doing what it can to help you save for a day when you might need to pay to see a doctor for that ankle sprain – if that’s how you choose to spend your health care dollars. The interesting thing about a HSA is that you’re not required to spend that money. You can still use out-of-pocket funds to pay for your health care needs and keep your HSA funds in place – growing tax free – until a point in time when you choose to spend your HSA dollars!

We also mentioned coinsurance benefits in deciding about a PPO plan strategy above: There are HSA-compatible health plans that pay 100% after you reach your medical deductible. That is a great way to simplify life when it comes to your health care coverage!

If you’re a fan of the Vitality California health insurance Blog, you know we’re fans of the HSA-compatible health plan. We believe it offers an innovative way to achieve savings on your health care coverage, secure tax benefits and we also firmly believe in its ability to empower consumers on how their health care dollars are being spent.

Finally, there are other important considerations for those who are considering going with a higher annual deductible health plan. It’s important not to think of yourself as a consumer who ‘laid down their money’ and have no ‘benefits’ until the day they meet that annual deductible figure: Most existing PPO plans have preventive services benefits that are very valuable tools in preserving good health and avoiding more serious – and costly – health care services later down the line. It’s important that you make full use of these services. It is also important to note that – due to Health Reform – new California health insurance plans purchased on or after September 23, 2010 will be required to cover recommended preventive services without charging you a copay, coinsurance or deductible – provided that these services are delivered by a network provider.

It is also important to note that with a PPO plan – as the owner of a plan or ‘member’ – you will enjoy the benefits of membership by getting the lower ‘negotiated rates’ for your medical services when you stay in-network. The difference between the negotiated rates you receive as a member of your health insurance company’s plan are significant compared to what you would pay for that same service without health insurance – and we can’t emphasize the word ‘significant’ enough.

We understand that Californians lead busy, hectic lifestyles. Between home and work it can seem difficult to carve out the time needed to review a California health insurance strategy with a Vitality Health Insurance Services team member. Please remember: Our client services are always free, always careful and considerate in how we help plan for your family’s health coverage, and we’re always available at a time and place that is most convenient to your schedule!