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My deductible is way too high! That's a common complaint of many concerning their health insurance policy. But is there ever a time when it actually makes sense to opt for a high-deductible policy instead of a low-deductible one?
The short answer is, yes. There are situations where it's worthwhile to have a high-deductible policy - and other scenarios where a lower deductible is well worth it despite the higher premiums.
How Health Insurance Deductibles Work
Your deductible is, in short, how much you have to pay out of pocket before your insurer begins to pay anything at all. There may be exceptions, caveats, and complexities, but that is the basic definition of a deductible at any rate.
Of course, you have to weigh your deductible in relation to two other major features of your policy: coinsurance and premiums. Monthly premiums are simply how much you have to pay to keep your policy in force. Coinsurance is the percentage of covered medical expenses that the insurance company will pay after you have already met your deductible.
Take note: any exclusions or other uncovered bills won't count toward your deductible. Only what you pay out of pocket counts towards it. And, some plans may pay for doctor's visits even before you meet a deductible and only require a set copayment per visit. But that varies from policy to policy.
Also, realize that a family plan can have a separate deductible for each person on the plan that is met separately. And it may also have an overall combined deductible. That makes things a bit more complex but can actually save you money if the same person is using more medical care that year (which is normally the case).
When To Seek A High-deductible Plan
The biggest benefit you get from having a plan with a high deductible is that it is going to cost you less from month to month. It may make you more careful about staying healthy and using health services as sparingly as possible as well.
Another benefit of high-deductible plans is that they allow you to be eligible to open and contribute to a health savings account (HSA) where you can tax-shelter funds that you use for health care later that year. Low-deductible plans bar you from HSAs, but also keep in mind that unused funds in your HSA are lost and not rolled over to the next year.
If you don't expect to have many health expenses in the coming year, have enough money saved to pay your deductible quickly if necessary, or want to open an HSA - talk to an agent about opening a high-deductible health insurance plan.
When To Opt For A Low-deductible Plan
If price were no issue, then everyone would want a low-deductible plan! But then again, if the price were no issue, no one would need health insurance to begin with.
There are other factors and special perks that may tip your decision on which health plan to choose, but clearly, deductible size is one of the biggest reasons to choose plan A over plan B.
If you are pregnant or may be soon, have a chronic condition, may need a major surgery soon, pay a lot annually for prescription medications, or engage in high-risk work or sports activities - consider a low-deductible plan. Just be sure it is also affordable so you don't miss payments and lose coverage. To learn more, talk to an agent at Summerlin Benefits Consulting today!