There are many factors to consider when it comes to finding the perfect health insurance plan. Insurance deductibles are one of the areas that consumers sometimes have strong opinions about. Some swear by the lower monthly costs that a high deductible brings, while others love the fact that they don’t have a massive deductible payment waiting anytime they need to use insurance. Choosing a low or high deductible is an important decision, and today we will talk more about which plan is perfect for you and your situation.
Deductible Basics
Most people know what a deductible is, as it is an essential part of most insurance plans, but it is still good to review the basics. A deductible is an amount you pay for covered healthcare services before your insurance plan starts to pay. The U.S. Centers for Medicare & Medicaid Services gives an example: ‘With a $2,000 deductible, for example, you pay the first $2,000 of covered services yourself.’ Beyond paying a deductible, the only additional cost is usually a small copayment, with your insurance company paying the rest. The price of a deductible, along with the amount of coverage you receive, is the driving factor behind the monthly premium of any plan.
Pros and Cons Of Low Deductibles
Plans with high insurance deductibles generally have benefits that are the opposite of the benefits of low deductible plans. Therefore, as we discuss low deductible plans in this blog, understand that if the low deductible plan benefits do not seem to outweigh the negatives in your mind, you might benefit from a high deductible plan.
Pros – Low deductible plans allow you to easily and predictably manage your budget and plan your future expenses. A lower deductible plan will never surprise you with a huge bill, as your insurance will kick in and begin paying once you meet the relatively small deductible limit. If you put value in stability and future-proofing, by looking at your monthly premiums and deductible limit, you can have a very clear idea of the total amount of health insurance costs you can incur within one year.
These plans are also best for older people who have a chronic condition or are at risk for injuries. Higher premiums per month are not as much of a burden if you can reasonably expect to gain more benefits throughout the year by paying a smaller deductible when you need help with medical issues.
Cons – The most glaring downside of low deductible plans are the increased monthly premium cost associated with them. Understandably, if your plan allows you to pay a smaller percentage of the bill when it comes due, you have to pay more month over month for the insurance company to deem it worthwhile. These low deductible plans also do not qualify for other benefits, namely a Health Savings Account, which helps invest money and plan for future medical expenses.
If you are an individual who is generally healthy and young, a low deductible plan is not advised. If you are unlikely to call upon your insurance to pay medical bills, paying exorbitant monthly fees can cause significant financial strain for no tangible benefit.
Whatever your opinions on deductibles are, discussing your options with an insurance broker ensures you receive the best coverage for the lowest price. Our experts at Anderson and Associates Insurance Group are well-versed in all the different insurance coverages and policies available to Sarasota and Bradenton area residents. ~
