High Deductible Health Insurance: Worth It?

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. 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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