One of the most important parts about any health insurance is what we call a deductible. A deductible is the amount you pay for health care services, with the exception of some free preventive care, before your insurance takes over. But is it better (and for who) to have a high deductible or a low one? What even determines any of this?! Lucky for you we have a super simple xxxplanation!
Generally speaking, high deductible plans are designed for those who rarely get sick, injured or have routine medicine prescriptions. It’s a great idea if you need to cut expenses, but you should also be mindful to set aside savings for covering out-of-pocket costs. The benefit of a high deductible comes in the form of lower monthly premiums and qualifying for a High Savings Account (HSA). An HSA is a savings account that isn’t taxed for eligible medical expenses. Your HSA balance rolls over each year so you’ll never worry about losing that security blanket.
Low deductible health insurance plans are exactly as they sound. When you get sick, you pay less money up front before your plan starts paying. The key point, however, is that you’ll pay more for your monthly premium. Basically, these types of plans make health expenses easier to predict. Especially in the event you develop a serious illness, are injured or need surgery. With a low deductible plan there’s no large out-of-pocket expense to worry about, but a lower deductible means giving up any access to your HSA.
When it comes to health care there is no “one size fits all” and there certainly aren’t any dumb questions. Make sure to voice all of your concerns and hesitations, as we truly are here to find the best plan for your unique situation.