Should You Purchase Low or High-Cost Health Insurance Deductibles?

health insurance deductible

Now that the health exchanges have opened under the Affordable Care Act, Americans have the opportunity to search for a health plan that best suits their needs. One question consumers face when exploring plans is whether they should purchase a low- or high-cost health insurance deductible. How do you know which is best for you?

What Is a Health insurance Deductible?

As some individuals set out to purchase health insurance for the first time under the new health reform law, they are faced with unfamiliar terminology that could make or break their cost of coverage.

In addition to unique terms like co-pay and co-insurance, the word deductible carries incredible importance for anyone purchasing insurance.

A health deductible is a monetary amount a health insurance provider may require you to pay before it will begin paying for your medical coverage. In other words, if you don’t pay this set amount, you will not be covered when you visit your doctor, attempt to fill a prescription or make an emergency room visit.

Some health plans come with deductibles as high as $10,000, while other plans require no deductible at all.

Fortunately, the majority of health insurance providers offer a wide variety of coverage options with a broad range of deductible options. So whether you choose to purchase coverage with a low or high deductible is usually up to you.

Which Health Plan Deductible Is Best for You?

The question of which health plan deductible is right for you and your family is not an easy one to answer since everyone has unique health concerns and treatment needs. To help guide you, however, here are some things to consider before choosing a deductible.

  • Deductibles and premium costs are linked. When searching for health insurance policies, you’ll notice that those with high health deductibles usually come with lower monthly premiums while coverage options with lower deductibles have higher monthly premiums. The key here is to never purchase a policy with a deductible so high you could never actually pay it; doing so would mean paying a monthly premium for coverage you would never receive.
  • Chronic conditions require more medical attention. If you have a chronic condition that requires regular medical attention or prescription refills, you probably want to consider the deductible option you can afford sooner than later along with the most affordable payments you can assume. If you don’t get sick too often, it’s easier to consider high-deductible plans, since your likelihood of needing health care is slimmer.
  • Children get sick and injured often. Children are magnets for colds, the flu and injuries, especially when they’re younger. If you have children in the home, consider a comprehensive lower-deductible policy that you can pay right away to begin coverage.

Choosing between low and high deductibles is usually a matter of how often you get sick and how much money you have set aside to pay your deductible.

If you want to have coverage in the event you get sick and have money lying around, consider a high-deductible plan. However, if chronic conditions exist in the home and you don’t have a lump sum of cash in your bank account, a low-deductible plan is probably best for you.

Photo: 401(K) 2013