High Deductible Health Insurance: Worth It?

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Thu, Oct 29 - 11:06 pm EST | 5 years ago by
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One of the ways that you can save money on your health insurance premiums is to get high deductible health insurance. In this case, you pay more out of pocket for your health care, which results lower premiums. As many begin to consider their options during this year’s open enrollment season, it is little surprise that many are considering the high deductible option. However, it may not always be the best option. Here are some things to consider before you spring for high deductible insurance:

  1. 85081013JR013_State_Budget_Loopholes in coverage: As always, read the fine print. In some cases, you might find there is a cap on the number of doctor visits you can make, dollar amount that is covered each year, or number of days you can spend in the hospital. Also, check to see what the high deductible plan covers. Many of these plans don’t actually cover prescriptions, mental health and maternity.
  2. Can you afford the costs associated with high deductible insurance?: Another consideration is whether you can afford the insurance. Sure the premiums are lower, but can you afford to pay $5,000 if you get seriously ill? And many plans now require you to cover 30% of your expenses after the deductible is met. So, if you end up with a $10,000 bill for something, you have to pay $5,000, plus another $1,500 to cover 30% of the remaining bill. It may be more affordable for you to pay an extra $20 or $30 a month rather than try to come up with $6,500 to cover an unexpected illness.
  3. Is it really cheaper?: Finally, you have to decide if it really is cheaper. I found, with the high deductible plans I was looking into, that since I would never meet the deductible in a year (unless there was a major catastrophe), I would be paying for all my expenses outright, on top of my premiums. It just didn’t make sense for me.

For some, though high deductible insurance is definitely worth it, especially when combined with a Health Savings Account. You can put some money in, and get a tax advantage, to save up for expenses related to meeting your deductible. This can be an elegant solution. But, truly, high deductible health insurance is mostly for those who are prepared and plan in advance.

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  • http://www.jgwentworth.com/ Larry

    i kind of see your point but somewhat disagree. high deductible insurance is mainly for those who don’t go to the dr. very often and just need coverage in case of an emergency situation.

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  • Miranda Marquit

    They can be good in some situations. However, many families find that they do not meet their needs. But, in the end, you have to do your own assessment and add up the costs and savings to see what would be best for you.

  • billy jean

    I was just reading this article and remembered a video I stumbled across the other day on this subject. I have posted a link below. In my opinion though I personally feel as though a HDHP, is a great option and I hope to see more employers offering this option to their employees more in the future.

    Quincy, MA
    high deductible health plan

  • Amy

    My employer, which happens to be a major health insurance company, only offers us employees HDHP options for coverage. It’s crazy because, when you enroll, you can pick the highest deductible plan w/no premium, or lower deductibles w/some kind of premium. However, the lowest deductible plan is still well over $1000.

    In my case, I don’t even make $35K a year. I have three children and a husband on my policy and we have no other coverage (spouse is unemployed). Because of my low income I can barely afford to contribute $150 to my HSA each month. The employer only matches 50% of my contributions. I can see that a HDHP would be fine for one person who rarely sees the doctor, but if you have a family of 5 that gets colds and each member needs to get checked for various little aches and pains throughout the year, plus medications, that HSA doesn’t cover much and the deductible ends up being a joke. We never meet ours in a year. Even if I had chosen the lowest deductible plan offered by my company we still wouldn’t meet it in a year. I think employers who have employees on lower payscales should offer specialized plans that could be affordable, especially if an entire family needs coverage.

    What’s even crazier, is that w/the HDHP plan, there is no separate maternity benefit. If I got pregnant in January, all of my monthly OB visits would go to the deductible as they are not considered “preventative care”. At the contracted rates of the provider fees I would still not have met my deductible when I go in to deliver the baby, so I would have to pay a portion of the hospitalization fees as well. This shows how poorly health insurance takes care of their own, in addition to other companies they insure.

  • billy jean

    Forgot the video link, here it is. sorry

    http://www.youtube.com/watch?v=CzTmC-m2bII