Choose High Low Deductible Health Plans

Should You Choose a High or Low Deductible Health Insurance Plan?

When open enrollment time comes along each year, you want to make sure that you and your family have the coverage you require—without paying more than necessary.

However, selecting health insurance might be difficult. There are numerous coverage options and decisions to make, and one of the most prevalent is deciding between a high or low deductible health plan. Choosing a healthcare policy is a major decision with a lot of variables—but we're here to make it as easy as possible. Continue reading to learn how high-deductible and low-deductible plans work—and whether one is best for you.

High-Deductible Health Plan Benefits

A high-deductible health plan (HDHP), as the name implies, has a larger deductible than other plans. If you choose an HDHP plan, you will have to pay a higher deductible before your plan benefits kick in for anything other than in-network preventive care services. In other words, you'll pay for the services you require until your maximum out-of-pocket payments are met.

Any plan with a deductible of $1,400 or more for individual coverage and $2,800 or more for family coverage is considered a high-deductible plan. Although a high-deductible plan often has higher out-of-pocket maximum limitations, once you reach that limit each year (including copayments and coinsurance), your insurer will pay 100% of the amount for the remainder of the calendar year. You will also benefit from decreased monthly premiums with an HDHP plan. This is especially advantageous if you are relatively healthy and do not intend to achieve your deductible or maximum out-of-pocket limit.

Finally, a high-deductible insurance plan includes a health savings account (HSA), which can assist you in paying for medical expenses not covered by your plan. We'll go through it in more depth below.

What’s a Health Savings Account (HSA) ?

If you select a high-deductible plan, you may also be qualified for a health savings account (HSA), which is an excellent tool for managing health-care costs. An HSA is a tax-free savings account that can be used to pay for eligible medical costs such as:

Dental procedures
Eye examinations and glasses
Long-term care facilities and nursing homes
Hearing aids

HSA contributions are tax deductible and grow tax-free, allowing you to retain more money in your pocket. You can direct funds from your paycheck into an HSA pre-tax or post-tax and deduct taxes later. Your employer may contribute to your HSA as well. Your HSA money produces interest and can be invested in stocks or mutual funds, or it can be spent on any qualifying medical bill. Best of all, unlike flexible spending accounts (FSAs), the money does not expire. That means you can retain the funds in your account until you need them without fear of losing them at the end of the fiscal year. After the age of 65, you can withdraw funds from an HSA for any reason without incurring a tax penalty. You will merely pay ordinary income tax on the withdrawal, which means it can be used as a source of backup income during retirement if you remain in good health. The tiny print on an HSA, however, is that they are not available with every high-deductible plan. If you're interested in a tax-free savings account, check with your insurer to see if it's included in your plan.

Low-Deductible Health Plan Benefits

If you're considering getting low-deductible health insurance, there are a few things to consider. A low deductible health plan has the advantage of requiring you to pay less money upfront before your insurance kicks in to cover your medical bills.

The disadvantage is that you'll have to pay a higher monthly premium—unless you have an HMO plan, which normally has low rates and low deductibles. It also means that if you don't require more extensive medical care, you'll have wasted your money by paying a larger monthly premium. In addition, by foregoing a lower monthly premium in order to obtain a lower deductible, you will be foregoing a health savings account, as these are only available with high deductible plans.

The good news is that if you require surgery or suffer a major disease, a low-deductible coverage can make it simpler to handle your medical bills. Because the deductible is lower, you won't have to worry about unexpected out-of-pocket payments.

High Deductible vs Low Deductible: Which One is Right for Me?

Consider your health situation as well as how much you can spend to determine if a high or low deductible plan makes more sense. Here's a comparison of the two to help you determine which one is right for you:

Who should consider a high-deductible health plan: Even though high-deductible health plans involve greater out-of-pocket costs, they can still offer significant savings to certain members. If you’re young and healthy, you may only need standard preventive care, in which case a high-deductible plan could be the best option. A high-deductible health plan might be right for you if:
You rarely get sick or injured.
You can afford to pay your deductible ahead or within 30 days of receiving a statement for that amount if you have an unexpected medical expenditure.
You want to use an HSA to save or invest money and can make contributions each month.
Who should consider low-deductible health plans: A low-deductible plan can make health expenses easier to predict. Even though they carry a higher monthly premium, they are still the most financially wise choice for many members in the long run. A low- or no-deductible plan might be right for you if:
- You are pregnant, planning to become pregnant, or have small children
- You have a chronic illness or need to see a doctor on a regular basis.
- You engage in high-risk sports or activities.
- Your prescription drugs are expensive.
- You're thinking about having reparative surgery, such as a hip or knee replacement.
- You'd prefer a plan with more consistent overall prices. Consider how much you can afford to spend each month for your premium. Then evaluate that against the importance of having your healthcare covered when you need it, with no unexpectedly huge bills.

How to Save on Your Monthly Health Insurance Premium

Health insurance policies might be complicated, but we're here to make it as simple as possible, including providing you with some of the finest coverage rates in the business. Our online health insurance quotes are quick and, most importantly, free! Get yours today and say welcome to comprehensive and cheap healthcare coverage.

When open enrollment time comes along each year, you want to make sure that you and your family have the coverage you require—without paying more than necessary.