There are many decisions to make when choosing which health care plan is right for you. Whether searching the government health care exchanges, or getting advice from a health insurance professional, determining the right health insurance deductible is an important step.
By definition, your deductible is that amount which you are required to pay out-of-pocket before your insurance coverage will begin to cover your expenses. Deductibles can be as low as a few hundred dollars, but can also range into the tens of thousands. Some plans may not have any deductible at all. It is important to recognize how the level of deductible affects the overall plan coverage and your monthly premiums.
What are my Health Insurance Deductible Options?
Generally speaking, a higher deductible will result in a lower monthly premium, and vice versa. Determining which is right for you can involve a discussion of general health, age, monthly budget and savings.
High deductible plans guarantee your provider that you will cover a larger amount of your own medical expenses, and thus your monthly premiums are lower. If you opt for a high deductible plan, you may be eligible for a Health Savings Account, which allows you to set aside pre-tax dollars to be used for your medical needs. Many employers have benefits plans which contribute to your HSA, which is beneficial on two fronts – you save more money for your medical expenses, and you lower your tax burden.
Still, in the face of major medical bills, a high health insurance deductible may prove overwhelming. These types of plans are generally preferable for those in good general health, and without children. As ACA plans cover preventive visits and often allow a co-pay, your out-of-pocket throughout the year is not excessive.
Low deductible plans significantly limit your medical expenses should you need your insurance, but will cost you much more on a monthly basis. Because the health insurance provider will pay the bulk of bill for a hospital stay or extended treatment, you are required to pay more up front. Initially, a higher monthly premium may not seem to be your best option. However, a low deductible plan will probably cost you less in the long run if you have chronic health issues, are expecting an upcoming operation or procedure, plan to get pregnant, or have children – especially if they are prone to illness or play sports.
Calculating Your Health Insurance Deductible
You will first want to determine your monthly budget for health insurance. Within that budget, choose a couple of plans. By comparing the lowest deductible plan you can afford alongside the highest deductible plan, you can see the differences for your family.
For instance, perhaps one plan will cost $1,500 per month, but offers a low family deductible of only $1,700 annually. Another plan will save you on premiums, at only $650 per month – but requires a $14,000 deductible before the insurance will begin to pay. It will be up to you to determine which is most appropriate for your situation, given expected medical procedures, any healthcare savings plans, and your monthly budget.
Once you have some options within your budget, check the exchange for any discounts or subsidies which you may be qualified for. These may help you to get more coverage for your budget.
Facts to consider:
- Preventive care, including your children’s annual exams and immunizations are no cost to you under the Affordable Care Act.
- You should budget for a couple of emergency room visits, any prescriptions, and labor and delivery if applicable.
- Once a deductible is met, there is usually still a co-insurance requirement. For instance, your insurance may pay 80% of the bills once the deductible is met. The remaining 20% should also be a part of your estimate.
At Anderson & Associates Insurance Group, we understand that choosing the right healthcare plan may be confusing. We are here to explain all of your options, explain the terms, and make recommendations based upon your family situation. Don’t go it alone – call us today for a no obligation health insurance quote.
