When it comes to health insurance, the deductible is one of the most important aspects of the whole health insurance process. The main question that people have is whether they should choose a high deductible for their health insurance plan or if they should go with a low health insurance deductible instead. This is an individual decision that requires some thought, but there are some solid factors that you can weigh that will help you make the right decision. In this article, we’ll be looking at both the pros and cons of high deductibles and low deductibles to help you understand your health insurance deductible better.
The Pros & Cons of a High Deductible
There are certain benefits that you get from having a high deductible. There are also some disadvantages as well. To start with, when you have a high deductible, you are likely going to pay less per month. That’s because there is a much smaller chance that your insurance company will have to contribute. For example, if you have a $1000 deductible, you might meet it after a single visit if there are extras involved like x-rays. But if you have a $10,000 deductible, it is unlikely that you will exceed that amount unless you get seriously sick.
Of course, the opposite is true as well. If you get really sick anytime during that annual period, you are going to be responsible for all of the doctor and hospital bills that come up. You have to meet your deductible before your health insurance company will pay a single cent – for unexpected services that is. So, you need to carefully evaluate whether or not the occurrence of a medical emergency is likely and plan accordingly. You don’t want to be stuck with $10,000 of a $15,000 hospital bill just to shave a few dollars off of the price of your premium.
The Services Not Affected by Your Deductible
Of course, the other side needs to be addressed as well. There are some services that have nothing to do with your deductible, and there are definitely some things that you need to know about these services in order to ensure that you are as well informed as possible about your health insurance plan.
With most health plans, there are standard services that are covered by your insurance company that have nothing to do with your deductible. These are services that are paid for by your plan even if you haven’t paid a single cent towards your deductible yet. They vary from plan to plan, but usually include things like yearly physicals for standard health insurance plans, dental cleaning for dental plans, vision tests for vision plans and so on.
The thing that you need to understand about these services is that even though you don’t have to meet your deductible, you are still going to probably have to pay what is called a co-pay; also sometimes called co-insurance. Basically, this is an amount that your insurance company requires that you pay towards a service that they normally cover. For example, suppose that you went in for a regular checkup or yearly physical that your doctor’s office billed the insurance company $250 for. At the time of the physical, the doctor’s office will see in their records that you have a co-pay of $35 and you will have to pay that. The insurance company will then be billed the remaining $215.
How to Choose Your Deductible
So, how do you choose your deductible? This is a difficult question to answer because so many factors are involved. The most basic way to look at your deductible is that it directly affects your premium. For example, if you have a really high deductible, the insurance company has a much smaller chance of having to pay out for your medical bills. That means that they are willing to offer you a lower premium per month. The opposite is true as well. If you only have a $1000 deductible, the odds are pretty good that the insurance company will have to pay something. That means that they are going to charge you more.
The Bottom Line
The bottom line is that choosing between a high deductible and a low deductible is a decision that each individual insured person will have to decide based upon their unique situation. Someone that expects to be hospitalized for health issues or expects to have a number of treatments or provider services over the next year may want to go with a lower deductible while someone that is perfectly healthy may want to bet on the side of a higher deductible and a lower premium. It is totally up to you how you choose to put together your health insurance plan.