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Ask the Health Insurance Expert

I'm a diabetic and have neuropathy, and I take medication for both. I'm thinking about switching my insurance to a high-deductible plan during my company's open enrollment. Is this a good idea?

More companies are offering high-deductible plans as an affordable health insurance option for their employees. In exchange for a higher-than-average deductible, you pay a lower-than-average premium.

Many of the high-deductible plans offered today are coupled with health savings accounts. The account lets you set aside pre-tax money for out-of-pocket medical care costs. The money can be invested and you never have to pay taxes on the returns if you use the cash for qualified medical expenses. You can roll over any unused money from one year to the next. You can even use the cash for non-medical expenses in retirement, although you will then have to pay taxes on the returns.

Not all high-deductible plans are qualified to have health savings accounts, so don't assume the plan comes with an HSA without checking.

The plan details and your individual needs will determine whether you should choose the high-deductible plan your company offers.

Evaulate what the plan covers and excludes. Examine costs, including the deductible, coinsurance--the percentage of medical costs you pay after paying the deductible--and the maximum amount you pay out of pocket before the plan foots 100 percent of the medical bills.

Make sure the plan has a strong network of medical providers and that your doctors are part of the network. Remember, you pay more out of pocket for providers that are outside the network. Also check whether your drugs are part of the health plan's formulary, the health insurance company's list of preferred drugs for coverage.

Consider all these factors in the context of your needs and compare the health plan with others the company offers to find the one that best fits your situation.

For more, see How to buy the worst health plan ever: 7 scenarios to avoid.

Last updated: Dec. 15, 2011