
AAA insurance review 2022
Learn about AAA’s top insurance products and its many services for AAA members.
Consumer-directed plans are an insurance topic you should know.
A consumer-directed health care plan (CDHP), also known as consumer-driven health care, is a health insurance policy centered around a savings account that gives the user more freedom to make her own medical decisions. Consumer-directed plans are easier to afford than traditional health insurance policies, but they have high deductibles for more expensive procedures.
Consumer-directed plans are a combination of health savings accounts, which the consumer pays into every month, and a high-deductible insurance policy. Additionally, CDHPs allow policyholder’s employer to contribute to some of her medical expenses through a health reimbursement arrangement
What makes them consumer-directed is that by offering policyholders a lower premium, the consumer is expected to make health care decisions based on what she has in the health savings account rather than what the insurance company approves. The policyholder is also not bound by a network/out-of-network policy that traditional insurance companies use to dictate which doctors their customers can see. And if the user needs an expensive procedure, she still enjoys a traditional insurance policy as part of her CDHP, although she’ll have to pay more out of pocket to meet the deductible.
Contributions to the health savings account can be deducted when filing income tax, and family members are allowed to contribute to the covered person’s HSA. Just like regular savings accounts, money deposited in the HSA earns interest. However, money in the account can only be used for qualified medical expenses.
CDHPs are controversial in that they better meet the needs of healthier and wealthier people. That’s because lower-income people and those with more expensive health care needs may forgo care until their health savings accounts reflect a more comfortable balance. In traditional insurance, consumers can request that insurers reimburse their doctors for care as soon as they need it.
Start saving for a health care-related expense now with a money market account.
Ken works for Company X. Every month, he is deducted $15 to that goes into his health savings account. For a routine medical procedure, Ken chooses Health Facility Y and Physician A independent of an insurance company, and after the procedure he pays them out of the balance he accrued in his health savings account. However, he finds the balance is running a little low after a series of doctor’s office visits, and he decides to skip another routine procedure out of concern for savings.
Learn about AAA’s top insurance products and its many services for AAA members.
Bankrate offers insight into how personal property insurance protects your belongings.
Bankrate untwists some of the most common myths about tornadoes.
Is Ameriprise the right choice for your financial planning? Research with Bankrate.
Is 21st Century Insurance the right provider for you? Start with Bankrate’s review.
See how bundling your home and auto insurance is often a smart financial move.
Bankrate reviews Nationwide, one of the largest insurers in the United States.
Looking for auto, home and life insurance in California? Kemper might be a good fit.
Bankrate’s extensive research could help you decide if Esurance is right for you.