Health insurance is crucial to everyone’s well-being, but policies with high deductibles have become increasingly popular in recent years. With high deductibles, you will need to pay a significant amount out-of-pocket before your coverage kicks in.
So, what are the pros and cons of choosing a high health insurance deductible?
Pros of Choosing a High Health Insurance Deductible
Lower Monthly Premiums
One of the most significant advantages of choosing a high deductible health plan is that your monthly premiums will be lower. The insurance company considers you to be a lower-risk client and requires fewer monthly payments to insure you.
Ability to Use Health Savings Accounts
With a high deductible plan, you can open a Health Savings Account (HSA), which allows you to put money aside tax-free. The contributions you make to your HSA can also be invested and earn interest, which you can use to pay for eligible healthcare expenses.
More Control Over Your Healthcare Spending
By choosing a high deductible plan, you have more control over your health expenses. If you rarely visit your doctor, then a high deductible plan may be a great option for you. You can make decisions about when to seek medical care and only use your insurance when necessary.
Cons of Choosing a High Health Insurance Deductible
High Out-of-Pocket Costs
The biggest disadvantage of choosing a high deductible plan is the high out-of-pocket costs. Your deductible is a significant amount that you must pay before your insurance coverage begins. This can be challenging if you have a medical emergency or require medical care.
Limited Coverage for Preventive Care
Some high deductible plans have limited coverage for preventive care. Preventive care, such as pre-screening tests, annual physicals, and regular wellness exams, is essential to maintaining good health. Without proper coverage, you may skip important preventive care after weighing the costs.
Risk of Paying More Money Overall
While you will pay lower monthly premiums with a high deductible plan, you may end up paying more money overall if you require medical care. For example, if you require surgery or need hospitalization, it is likely that your out-of-pocket costs will be high.
Final Thoughts
Choosing a high deductible plan has its pros and cons. While you can save money on your monthly premiums and have more control over your healthcare spending, you must weigh the risks of paying high out-of-pocket costs and potentially paying more money overall. Before making any decisions, it is important to research various insurance plans and speak with a licensed insurance agent to determine which option is best for you.
