Among the many important things to consider when choosing a health insurance plan, the deductible is chief. A deductible is, according to Merriam-Webster, the “amount of financial loss specified in an insurance policy that the insurer will not be held responsible for and that the insurance holder must pay.” In simpler terms, the amount of money you are expected to shell out before your insurance company offers to help.
With that definition, you can understand why it would be crucial for you to select a health coverage plan with a deductible that fits your lifestyle needs. Continue reading to determine the core differences between high and low-deductible plans and decide which is a better solution for you.
High-Deductible Insurance Plans
There is usually a trade-off when choosing a health plan; you pay a lot in monthly premiums for a low deductible or a lower monthly premium in exchange for a higher deductible. You will be responsible for paying for your medical services, apart from those usually covered by most health plans, until you reach your deductible, which will be when your insurance coverage kicks in.
For a higher deductible plan, you will be paying a lot more money for any medical services you may need. For example, if your deductible is $6,000, you would be paying that out-of-pocket before you get any assistance from your insurance company.
While it’s not necessarily an attractive offer, most people are willing to take the risk due to the lower monthly payments they’ll make. However, this isn’t ideal for people with frequent or extreme medical needs. Instead, a plan like this can work for someone who doesn’t frequent the doctor much or has the means to cover those upfront costs until their deductible gets met.
Low-Deductible Insurance Plans
For low-deductible plans, you’ll likely start receiving full coverage sooner after seeking medical care. The trade-off here is that these types of plans usually have a higher monthly premium compared to high-deductible plans.
Lower-deductible plans are a great option for those with chronic conditions or who foresee having a lot of medical needs throughout their tenure with the plan. Additionally, you won’t have to stress about any unforeseen accidents or surgeries since, at that point, your coverage will have fully kicked in. You will only have to pay a small percentage of that bill.
Which One is Better for You?
So, which is better for you? Well, that’s a decision that involves really considering your lifestyle and your medical needs. If you are young and healthy and anticipate having low use of your healthcare plan, then a high-deductible plan may be better for you. However, if you have a family, chronic health issues, and need frequent medical care, you may be better suited for a low-deductible plan.
Ultimately, you want to ensure you take the proper time to review your healthcare habits and financial comfort level before choosing a plan. Working with an agent at Empower Brokerage can make this process much easier to navigate. Give us a call at (844) 410-1320 to speak with someone, or click here to get affordable health insurance quotes.
Have Health Insurance Questions?
We hope that this information on high-deductible vs. low-deductible insurance plans is helpful for you.
Insurance is oftentimes overwhelming and we want to shed light on the industry by answering your questions. Comment below and your question may be the topic of our next post!
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