What you Need to Know About Your Health Insurance Deductible

Should you choose a low or high deductible? While a low deductible will cost you a higher premium per month, a high deductible could cost you more overall. Depending on who you ask and what your individual situation is, both a low and high deductible can have advantages and drawbacks. To help you choose, here is a quick guide to the pros and cons of low and high deductibles.


Pros and Cons to a High Deductible


At one-time, High Deductible Health Plans (HDHPs) were not very common, however; as healthcare costs have risen and employers have looked to save money on their benefit packages for their employees, this type of insurance has steadily increased.


Pros: Along with having a lower monthly premium, an HDHP often doesn’t have as many network limits as an HMO would which is important if you have a particular doctor you would like to stay with.


Additionally, while you will be paying more out of pocket for things like doctor visits and other treatments, you will not be charged market price. Instead, you will get a rate based on an agreement between the insurance company and the medical provider which will be lower. Also, if you’re the type who doesn’t use their benefits very often, an HDHP can be a cost savings.


Finally, an HDHP is eligible for a Health Savings Account (HSA), which allows for tax-deductible contributions. This can further help offset the costs of a high deductible.


Cons: While those who don’t use their health insurance often can save with an HDHP, many people do so at a risk to their health. Historically, HDHP’s were started with the idea that if people were paying more out of pocket they would be more likely to shop around for cheaper medical providers which would save them and the insurance company money. However, it is more likely that people will not shop around and will, instead, forgo medical treatment and preventative care when they can’t afford it.


Additionally, people with chronic illnesses often end up paying far more when they have a HDHP because they are likely to reach their deductible amount which can be as much as $5,000.  There are also restrictions on HSAs that can up costs as well. For example, if you have an HSA, you can’t also use Medicare or be claimed as a dependent.


Pros and Cons of Low Deductible

Pro: A low deductible makes for far more predictable costs. Even if you have a chronic illness of medical emergency, it’s unlikely your out of pocket costs will be difficult to cover.  Because of this, if you have ongoing medical concerns or are of an advanced age, a low deductible is often the best choice.


Cons: The high monthly costs of a low deductible insurance plan can make this type of healthcare prohibitively expensive for many. Additionally, if you are healthy and unlikely to need medical care, your premiums are likely to exceed the amount you would have spent without any insurance at all.


Choosing Your Health Insurance Provider


Navigating the health insurance world can be difficult. Along with deductible and premium considerations, you may also need to look at which doctors will be in your network and if your medical conditions are covered with the plan you choose. For comprehensive and knowledgeable help in choosing your health insurance plan, contact Arbor Creek Financial, a preferred Fort Wayne health insurance and financial advisor. Don’t put off necessary medical attention due to lack of insurance, contact Arbor Creek today.