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Many people focus too much on the premiums when choosing a health insurance plan, but out of pocket costs are just as important a factor. And what kind of a deductible, if any, your plan has is one of the biggest out of pocket considerations.
You have three main choices when it comes to deductibles with health insurance: high deductible plans, low deductible plans, and no deductible arrangements.
High Deductible Health Insurance
The advantage of a high deductible health plan is simple: your premiums are going to be lower. To intelligently decide whether a high deductible option is right for you, you first need to estimate your real likely healthcare needs for the year ahead.
If you are a generally healthy person, rarely ever used your health insurance over the last few years, or simply can't afford high premiums (and don't get enough subsidies), then a high deductible plan may be your best choice.
Also, if you are going to use a health savings account (HSA), be aware these are only allowed with higher deductible policies. And if you have enough money saved to pay for the deductible upfront in the event of a major medical need - that's another reason to choose high deductibles to get the low premiums.
Low Deductible Health Insurance
When is it worthwhile to pay more each month for your health coverage? For one thing, if your deductible is significantly lower as a result.
If you have preexisting or chronic health conditions that will cost a lot every year, regularly pay for high-cost prescription medicines, have a "busy" medical history, or have major illnesses that run in the family - then you may need a low deductible to save the most out of pocket.
Additionally, those who are or may soon become pregnant, families with young children, and seniors or those in poor health should generally seek a low deductible health plan.
Low deductible plans also make healthcare costs more predictable since you are more likely to meet your deductible and then pay only the coinsurance and/or copayments. You may also not have to pay anything at all after meeting an out of pocket annual maximum - if your policy has one.
What About Zero Deductible Health Insurance?
Some people don't even realize that no deductible health plans exists - but they do. They may cost more per month, but if you qualify for government subsidies, they could be much more affordable than you think.
Not having to wait to first meet a deductible before your insurer begins to pick up his end of the tab is a huge benefit. If you tend to visit the doctor frequently, it's a benefit worth paying extra for. A no deductible plan with an out of pocket maximum too is an excellent combination.
On the other hand, a low deductible plan with "no charge after deductible" may work out the same or better than a zero deductible plan with ongoing coinsurance. It just depends on your exact situation and what you are willing to pay for premiums.
Interpreting complex health insurance "rules" can be confusing, and it is not always easy to assess your healthcare usage and match it with the best available plan. Contact an experienced agent at Summerlin Benefits Consulting today for timely advice on deciding among high, low, and no deductible health plans and for help in making other key decisions in regard to your health insurance.