How will enrolling in an HDHP affect my claims?

A High Deductible Health Plan (HDHP) provides comprehensive coverage for high-cost medical events and a tax-advantaged way to help you build savings for future medical expenses. In addition, HDHP plans generally provide full coverage for preventive medical services.  Below are brief examples of how some services may be covered under an HDHP.

• - Preventive Services -

Example #1: John receives his yearly routine physical examination and routine screenings such as blood cholesterol screenings and a colorectal cancer screening from a network provider.

John will pay nothing for these services.

Example #2: Mary receives her yearly examination including a routine pap test and a routine mammogram from a network provider.

Mary will pay nothing for these services.

Example #3: Billy receives his childhood immunizations as recommended by the American Academy of Pediatrics and a routine examination from a network provider.

Billy’s parents will pay nothing for these services.

Note: Some HDHP plans may place per member dollar maximums on the amount of preventive services that are covered in full. If you enroll in such a plan, you may pay the balance of costs for any preventive services received above any such limit from your HSA or HRA funds.

• - High Cost Services–

Example #1: Herbert is hospitalized at a network facility for seven days because of a hemorrhage in his gastrointestinal tract. The total cost of the hospitalization is $15,000. Before his HDHP begins paying non-preventive medical benefits, Herbert must meet the plan’s deductible of $1,100. Herbert can meet his deductible by using the money he currently has in his HSA, or by paying his deductible out-of-pocket. Once Herbert meets his deductible, traditional medical coverage will begin. In Herbert’s HDHP, he will owe his traditional cost sharing on the balance of $13,900 ($15,000 - $1,100). If his cost sharing is based on 15 percent of the allowed charge, he will owe an additional $2,085 ($13,900 * .15), for a total out-of-pocket cost of $3,185 ($1,100 + $2,085). This amount will count toward Herbert’s catastrophic protection out-of-pocket maximum of $5,000.

Example #2: Herbert is hospitalized again within the same year for a cardiac procedure at a network facility with a cost of $45,000. Since Herbert has already met his calendar year deductible, he will be covered under traditional medical coverage. Also, since Herbert has already paid $3,185 out-of-pocket, he will only owe an additional $2,915 ($5,000 - $3,185) to reach his catastrophic protection out-of-pocket maximum. Therefore, of the $6,750 ($45,000 * .15), which would represent 15 percent of the allowable charge, Herbert will only owe $2,915 ($5,000 - $3,185), with his health plan covering the remaining $42,085 ($45,000 - $2,915) of cost. For the remainder of the calendar year, the plan will pay 100 percent of its allowable amount for covered services Herbert receives.

Note: The above examples are based on a typical HDHP benefit structure and hypothetical claim cases.  Please review the individual plan brochure for the specific details of any plan you are considering.