Should I get a high-deductible or low-deductible plan?

By October 6, 2014 Uncategorized No Comments

With healthcare costs on the rise across the country, many people have turned to high-deductible health insurance plans to reduce their monthly burden when it comes to premiums. Under the Affordable Care Act, most people now have to purchase some type of health insurance or face a fine or tax for non-compliance. With high-deductible plans, enrollees gain the benefits of having health insurance without high upfront costs. Still, opponents of high-deductible plans argue that these plans discourage people from seeking care when they need it most. Whether someone should get a high or low-deductible insurance plan depends on different factors.

Preventative Treatment Options
In an article on the merits of high-deductible plans, USA Today notes that “several screening tests, such as colonoscopy, will be available to high-deductible plan participants at no charge” under Obamacare. Thanks to the Affordable Care Act, many preventative services will be offered for all health insurance beneficiaries regardless of their deductible. For people who only visit a doctor for annual checkups, high-deductible plans could save thousands of dollars in medical care each year. When searching for a plan using the health insurance exchange sites, it’s important to remember this fact in determining what the total cost will be for insurance. All plans on the marketplace feature free preventative care among the ten essential benefits provision of the ACA.

Critical Services and Chronic Care
Financial blog GetRichSlowly.org points out that “[a] high-deductible plan is a poor option if you have a chronic illness, can’t afford the deductible, and the high out-of-pocket costs prompt you to delay needed care.” People who need a lot of medical care will meet deductibles more quickly than those who don’t, and high-deductible plans can cost thousands of dollars. People with chronic conditions such as diabetes or Crohn’s disease should consider low-deductible plans because these plans require less out-of-pocket spending during the year.

Low-deductible plans may also be useful for active individuals or families with teens who play sports. A relatively healthy teen can still fall victim to frequent sports injuries, and high-deductible plans may deplete savings accounts quickly. Lower premiums might reduce monthly expenses, but high yearly out-of-pocket costs may negate these savings in the long run.

Long-term Cost Considerations
Cost shouldn’t be the only factor that people consider when purchasing health insurance, but it is admittedly one of the top concerns in a recovering economy. High-deductible plans can save many people money as long as those people don’t require extensive medical care, but do they really help save enough to justify the staggering deductibles quoted by many top insurers?

In an article hosted by The Huffington Post Blog, James R. Knickman argues that “people need to understand the terms of their health care plans and consider a whole range of factors — not just the cost of premiums.” Education is also critical according to Knickman. Patients should know when to seek appropriate medical care even if it’s going to cost a fortune. In the long run, paying more for health care upfront may reduce or mitigate astronomical medical expenses.

 

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