High Deductible Health Insurance Plans

Many people are looking for ways to cut expenses these days.  Health insurance is one budget category that many consumers are interested in trimming. In order to save money many are choosing different types of health insurance including high deductible health coverage as a way to save money. What are high deductible plans and are there any risks associated with them?

High deductible health insurance plans typically have deductibles of at least $1000. Generally speaking, the higher the deductible, the lower the premium. An example of this is a person that has a $5000 deductible on his policy will have to pay around $41 a month in premium costs. A high deductible health insurance plan requires that the patient pays more before the insurance covers medical costs. These health plans are set up to be used in conjunction with health savings accounts or HSAs. The consumer is responsible for paying the first $1000 to $5000 or more in medical bills before the insurance takes effect.

High deductible health insurance plans with their high premiums are best for people of good health – who do not need regular prescription medications. In spite of the obvious benefits, these plans are costly and should be considered with care as they can prove expensive rather quickly. For example, if you were to have a plan with high premiums and you should suddenly need medical care, you will need to have at least $1000 available in extra cash to cover the doctor or medical bills. Another thing to be aware of is the fact that most of these plans pay very little or nothing toward the cost of medications.

A high deductible health insurance plan can be viewed as a bet against yourself. You are betting that you will not become ill and that you will not have an accident. This is why this type of plan is called a ‘catastrophic heath insurance’ plan. A traditional plan works on a system of co-pays and deductibles. It assists you in paying your doctor’s bills, lab tests and medications from day one. There is usually a low deductible to meet with a traditional plan. A high deductible plan features a high deductible that you must meet before the insurance will pay for doctor’s visits, lab tests and drugs. You have to pay at least the first $1000 in costs out of your pocket before the insurance will take over and pay 100% of subsequent medical costs.

If you were to have a high deductible health insurance plan with a $1500 deductible, you would have to pay the first $1500 (annually) in medical expenses. Your insurer will then pick up the rest of your medical costs for the remaining portion of the year. If you are interested in high deductible health insurance coverage It is a good idea to check with your employer as some companies offer price breaks to their workers who purchase high deductible plans and whom have demonstrated healthy habits. You may be asked to have a check-up but it could be a way to lower your costs.