Managing Risk, Part 1 – Hypocrisy in Action…
Question – which is the better health insurance policy?
One with a $1,000 deductible? Or one with a $5,000 deductible?
If money were no object, the vast majority of folks would choose the $1,000 deductible, every time. Period.
But let’s explore the details a bit more. Both plans have the same Co-Insurance – that is, the percentage of health care charges you’ll pay once you’ve met your deductible, until you reach your plan’s Out-of-Pocket Maximum,
Confused? Don’t be! It’s all part of the plan…
Back to basics. Of course the $1,000 deductible has to be better, right? I mean, look at what else you might have to spend:
The Out-of-Pocket Maximum is only $2,000 for the policy that has a $1,000 deductible, while the $5,000 deductible policy has a $6,350 Out-of-Pocket Maximum.
What all that amounts to is that, should you get hit by a train while covered by one of these health insurance plans, the maximum amount you would have to pay for your health care costs would be:
$6,350 for the high deductible policy, but only $2,000 for the better one.
A no-brainer, right!?! Of course. Who wants to risk $6,350 when you can risk spending $2,000 for the whole year?
Now, let’s talk about risk. Say you’ve just arrived at your favorite casino in Vegas – and pretend that again, money is no object. Which would you rather gamble with – $1,000? Or $5,000? $2,000, or $6,350?
I can sense the hypocrisy from here. Can you?
But seriously, there are a few differences between a health insurance plan and a trip to Vegas, and we’ll review them in the next post.
It’s not the COSTS of health care that are outrageous…it’s the CHARGES.