Why are health insurance deductibles so high?

November 28, 2017

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Lauren
Lead Copywriter

Since it’s Open Enrollment, you’re probably in the process of researching health insurance plans, and you might be noticing that some plans have high deductibles.

It’s not uncommon to see plans with $5,000, $6,500 or even $7350 deductibles!

Why so high?

Typically when you have a health insurance plan with a low monthly premium (the monthly payment), you’ll have a higher deductible. This means you won’t be paying a lot for your monthly bill, but if you need to use your insurance, you’ll have to pay for medical expenses until you reach your deductible. For example: If you go to the hospital and your deductible is $6,500, you’ll have to pay the first $6,500 of your total hospital bill.

So why would one want a high deductible health insurance plan?

For people with tight monthly budgets, a high deductible plan might be the only way to go. The difference between a low deductible plan versus a high deductible plan can be hundreds of dollars in your monthly payment. A high deductible plan is also good for individuals who don’t want a high monthly payment and don’t go to the doctor often.

However, a high deductible plan can sometimes work in your favor financially. For example: Say you have a high deductible plan but your monthly payment is low. You visit a couple of doctors over the course of the year that you pay out of pocket for because your high deductible plan doesn’t offer co-pays for doctor visits. Your all-in yearly cost for a high deductible/low monthly payment plan can often be cheaper than a low deductible/high monthly payment plan that has co-pays because the low deductible/high monthly payment plan might have monthly payments that are through the roof!

Another nice feature of a high deductible plan is that you can typically use it in conjunction with an HSA, or Health Savings Account. With HSAs you can contribute tax-free funds into your account to help pay for medical expenses including your deductible!

If you choose a high deductible plan and worry about covering the deductible in case of an emergency, we’ve got your covered. We offer deductible insurance that will cover your high deductible.

If you need help deciding between a low or high deductible plan, or are interested in deductible insurance, give us a call 1-888-871-3864. We’re happy to discuss options that best fit your needs and budget.