Paying Top Dollar for First Dollar Coverage?

What deductibles say about health coverage value.


Skyrocketing Costs, Plummeting Value

If there’s one constant in today’s healthcare marketplace, it’s that you don’t get what you pay for. Well into 2024, employers are struggling to pay rapidly inflating price tags on stagnant benefits, and the financial strain is affecting members too. Unfortunately, higher employer spending doesn’t equate to more member savings, and even higher premiums hardly equate to lower out-of-pocket costs.

In 2024, employers can expect to see their healthcare spending tick up by 6.4%1, while members will see similar increases of about 6% in their premiums2. What’s even more concerning, is that while employees are already paying these higher premiums, they’re also faced with an increase of 5.7%2 in their deductibles and copays. For the already 47% of American adults3 who struggle to afford their current health costs, these trends reflect an urgent, yet seemingly impossible, need to simultaneously cut premiums and deductibles.

To limit out-of-pocket spending, many plans turn to first dollar coverage.


What Is First Dollar Coverage?

Because of cost-sharing, doctors’ visits can leave Americans, most of whom have less than $400 in health savings4, with unmanageable out-of-pocket costs. One way to eliminate this cost-sharing is through first dollar coverage—services that are fully covered by a health plan, with zero cost sharing and regardless of whether a member has hit their deductible5. While there are some required first dollar coverage cases for care, such as an annual physical, the first dollar coverage care available to members varies with their health plans.

Still, there’s a catch here. The savings on deductibles and copays in these Cadillac plans are often more than recouped by insurance providers through larger premiums. In fact, annual premiums for typical first dollar coverage Cadillac plans can easily exceed $30,000 for a family6. Ultimately, employers and members are paying top dollar for a list of first dollar coverage, most of which won’t be used in any given year as the average American adult under 40 has just two primary care visits annually7.

Instead, what if members could get first dollar coverage for any health expense—without paying higher premiums?


Enter the HSA

In many ways, Health Savings Accounts (HSAs) couldn’t be further from Cadillac first dollar coverage plans. The first is high deductible only and the latter can be zero-deductible. In fact, even having traditional first dollar coverage for just three items on a plan disqualifies it from HSA status. Still, HSAs offer a similar function to Cadillac plans—they eliminate out-of-pocket spending.  So, how are these two plan options different for the member?

HSA—Members pay smaller premiums for less coverage. They can invest these savings in tax-advantaged HSAs and use those funds as a form of “first dollar” coverage. Members save all unused dollars in their account which grows tax free and can be used to pay for thousands of future healthcare expenses.

First Dollar Cadillac Plan—Members and employers pay a large sum for access to an extensive, but inflexible list of first dollar coverage. Groups pay these premiums regardless of whether this first dollar coverage is used. And, as you may know, deductibles are skyrocketing (the average deductible for a traditional plan exceeds the threshold for HSA qualified plans) so, most covered by traditional plans, are left with a daunting deductible, which few will reach, without the benefit and accessibility provided by an HSA. Today, this design presents more financial risk to valued team members than traditional plans of the past.

Just by switching the way money moves away from the insurance carrier and toward member engagement, groups can get functionally all the benefits of first dollar coverage (fewer out-of-pocket costs) with improved access to care and much more autonomy.


A ful. Solution for Everyone

It’s time for members to tap into the limitless potential of their health plans. At ful, we enhance the autonomy HSAs provide by engaging, educating, and rewarding members at every step of the health care shopping and savings process. Still, the basics of savvy healthcare choices aren’t just limited to HDHP members.

With support from ful, members cut their out-of-pocket spending and make the transition from traditional coverage to HDHP easier with the opportunity to learn and earn distributions to their HSAs—all while they become more savvy healthcare shoppers.

Let’s build a smarter, more accessible healthcare system together.

Discover ful’s Health Savings Revolution at