Coping with the cost of insurance is not easy for just about anyone, but it is something that we all have to do, simply because healthcare is so expensive. The costs of healthcare are going up, and they don’t really show any signs of slowing, and that’s unfortunate because it leaves many people totally out of luck when it comes to affordable insurance, or affordable ways to pay medical bills out of pocket. But that’s why high deductible health plans can be key to allowing you to get affordable premiums, so long as you know how to manage them.
But of course, the inherent problem with high deductibles is just that it means you’ll have to pay more out of pocket when you need care. If you have a deductible that’s into the thousands, that means you have to pay that much annually, before your medical care is going to kick in, and when the worst happens that can be a problem because not everybody can afford their deductible on a moment’s notice.
That’s why you want to know the pros and cons of a high deductible health plan, before you actually sign up for one. They’re not always the best option when it comes to affordable insurance. Here are some of the most common positives and negatives that you’re going to find when it comes to high deductible health plan insurance options:
1) The first positive is that a higher deductible means a lower premium.
Insurance is all about risk, and the more risk that’s there for you to have a claim paid by the insurance provider, the more you’re going to have to pay on a monthly basis. With a lower deductible the insurance company is likely going to have to pay for care if something happens or you have to go to the hospital. That means a higher premium so they can recoup the costs they are likely going to have to put out. But with a high deductible plan, then the insurance provider is not as likely to have to pay because so much has to come out of pocket first, so you get a much lower premium as a result.
2) However, higher deductibles mean that’s a lot more you’re going to have to pay.
The major danger of a plan like this, is just that you may still shy away from care because of the fact that you have to pay so much just to get down to your insurance. If you have a really high deductible, in the end that’s still going to mean several hundreds of dollars, or more likely thousands that you have to pay before care kicks in, and you still might not have that money to be spent. That’s going to be a problem if something happens like an illness or major injury, which is still going to leave you totally out of luck even though you do have insurance.
3) But you can always open up a health savings account to cope with high deductibles.
If you do have an individual health insurance plan that features a high deductible, usually there’s a provision in there to get a health savings account. This is a special type of bank account that actually enables you to save for medical expenses on your own, totally tax free, so that you can put the money towards your deductible should the worst happen. This way, you have that fund that’s always there, just waiting to be used for when you do have a health problem.
4) However, even that does cost a lot of money.
There are two problems with health savings accounts that can be an issue when it comes to coping with a high deductible health plan. On the one hand, you’re having to save on your own, so that’s still a ton of money that you’re out, in addition to the premium fee you have to pay, and that’s going to just about level the cost that you would have been facing otherwise because of expensive premiums. Then on the other hand, you’re also limited as to how much you can contribute per year, so you can only have so much set aside in that account for medical expenses.