A high deductible health insurance plan is just like what it sounds like. It is a health insurance plan that has a high deductible and is designed to provide for catastrophic coverage in case something happens to you. It is a viable option for people who are struggling to find health insurance at a reasonable price.
How High Deductible Health Insurance Plans Work
High deductible health insurance plans usually have lower premiums and higher deductibles than standard health insurance plans. Usually high deductible health insurance plans are part health savings account (HSA) plan.
Most high deductible plans usually include some “wellness” benefits for free such as routine physicals and flu shots. But, that is not where high deductible health insurance plans earn their bread and butter. Beyond routine wellness exams, high deductible plans typically only kick in once the deductible is met. However, the maximum deductible is set by law. So, you know what you will have to pay.
High Deductible Health Insurance Plan Costs
Currently, high deductible health insurance plans typically have a minimum deductible of $1,200 per year for individuals and $2,400 per year for families. High deductible health plans also have a maximum out of pocket expense, which is the most that you will pay per year for medical expenses. Currently, the out of pocket maximum for individuals is $5,950 and $11,900 for families.
Benefits of High Deductible Health Insurance Plans
The biggest benefit of a high deductible health insurance plan is the upfront savings. These plans offer significantly lower premiums compared to traditional health insurance plans. Also, since these plans are usually used in conjunction with a health savings account, you can use pre-tax money to pay for the premiums.
Finally, if you are utilizing this type of plan through an employer, the employer usually contributes an amount of money towards health care costs, which could cover the entire annual premium in many cases.
High deductible health insurance plans are tailored to individuals who do not need a lot of medical care. If you only typically get an annual physical and flu shot each year, and not much else in the way of medical care, then a High deductible health insurance plan may be right for you.
High deductible health insurance plans are very cost effective. While they may reduce your likelihood to get some routine care, it still provides coverage should a catastrophe occur and you require serious medical care. At the end of the day, you know what your maximum out of pocket expense will be every year with a high deductible health insurance plans.