High or Low Deductible Health Insurance - Which to

Buying a health insurance plan requires careful comparison and planning in order to purchase an ideal plan for an individual or a family. However, the whole process of buying a health insurance plan is quite a time-consuming task and moreover, if you also include the deductible aspect, the whole process becomes even more challenging. Therefore, it is recommended that you should know and understand different aspects that can possibly affect your coverage prior to purchasing any health insurance plan. A thorough comparison of high and low deductible health insurance policy and the premium cost respectively for both plans will help you in purchasing the ideal health insurance plan.

Let us first go through the key health insurance terms as understanding these terms will help you in knowing the difference between different plans in order to make a wise decision.

Premium: The cost paid every month towards the health insurance plan, whether you use it or not.
Deductible: The amount that you are required to bear upfront for your healthcare needs before the policy benefits come. Once the deductible limit is met, the insurance provider starts to pay a greater part of the charges.
There is an inverse relationship existing between premium and deductibles. It means the higher is the premium, the lower would be the deductible amount, and vice versa.

Types of Deductibles in Health Insurance

There are two types of deductible health insurance plans. These are as follows:

High Deductible Health Insurance Plans

• A lower upfront premium is to be paid.
• A previously fixed amount of deductible has to be borne by the policyholder prior to the start of health insurance cover.
• The plan is designed to offer comprehensive coverage against life-threatening illnesses and medical emergencies.

Low Deductible Health Insurance Plans

• A higher upfront premium amount needs to be paid.
• It is an ideal plan for people requiring regular medical care.
• Although, the premium amount is high yet out-of-pocket is far lesser for low deductible health plans when compared to high deductible health plans.
• The time period for the insured to bear the cost is considerably low in comparison to the high deductible plans. The benefits and cover start earlier.

Which Deductible Plan Should You Consider Choosing?

High Deductible Health Plan

You should consider choosing a high deductible plan in case:

• In case you are a healthy individual, who rarely falls sick and does not require immediate medical attention.
• This plan is beneficial for individuals who are young or young families, the ones who cannot afford to bear a high upfront premium but can manage with a delayed cover.
• Possible means to make contributions to health savings account on a monthly basis.

Low Deductible Health Plan

A no deductible or low deductible plan might be ideal for you in the following situations:

• You are expecting a baby, planning for a baby, infant care or have small children.
• You are suffering from a chronic condition and have to visit a doctor often.
• You are planning to undergo reparative surgery, like hip or knee replacement.
• You or your family members are involved in high-risk sports activities.
• You have high and recurring medical expenditure as although a lower deductible plan has a higher premium yet it offers early protection.

Note: In case you are unable to pay your premiums, you are at risk of losing your health cover. Therefore, it is advisable to go for a high deductible plan instead of losing out on coverage. However, the decision entirely depends upon individual preferences and healthcare needs.

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.