Are Discounted Fee-For-Service Medical Programs Too Risky?

BY Justin Magill

Is the high cost of quality supplemental healthcare getting you down? Are you one of 7 out of 10 Americans with no Dental benefits? Or one of the millions of Americans that just simply cannot afford medical coverage? In a perfect world we could just maintain our health - give up smoking, drinking, over-eating or other vices that keep us from running at 100%. Unfortunately, we live in a world where we can get ill unexpectedly or have an accident that sends us to the hospital. If we could simply control our destiny and our desires we would have no need for any type of insurance or medical coverage.

With the facts pointing to everyone needing some type of medical coverage, what are our options? The first thing you're probably thinking is, what else could there be besides insurance? Well, today we have a few other options besides the traditional and expensive insurance route. The answer I will propose is Consumer Driven Health Care or discounted fee-for-service medical programs. There are several companies now who have created a large network of Doctors, Dentists, Vision Providers, Chiropractors, etc. Within these networks you can receive anywhere from 15 to 90 percent discounts on services provided and cost around $50 to $60 per month or $12 to $20 if you're only looking for a Dental, Vision, Prescription and Chiropractic plan (DVPC).

But what if something serious happens? What if you don't have the money to cover the remainder of the bill after the discount? There are a couple of inexpensive services you can take advantage of. The first is a Health Savings Account (HSA) or Medical Savings Account (MSA) and the second is supplemental catastrophic insurance policy. With a Health Savings Account you are able to accumulate tax-differed funds, any money you deposit in your Health Savings Account is 100% tax deductible, and can be withdrawn to pay for medical expenses, tax-free. The funds in your HSA are always yours, and grow tax-deferred like an IRA. At age 65 the money can be withdrawn penalty free for any reason. If you would purchase a catastrophic insurance policy that will pay for care if you develop cancer or any other serious disease, you would probably sleep pretty soundly. This would cost you another $40 to $50 per month and would stay the same for your entire lifetime since the insurance company would only have to pay if develop a catastrophic disease which they believe has a low probability of happening to the majority of people.

So by utilizing a Consumer Driven Healthcare program along with a HSA and a catastrophic insurance policy you're looking at spending around $100 per month or $1200 per year. You would have to ultimately be the judge of what you think is best for you and your family, but if you are spending several hundred dollars every month on insurance that you're not really using...maybe this would work for you. At least now you know that it is at least an alternative to traditional insurance.