The Pros & Cons of High Deductible Health Plans | Bogle Agency Insurance
It’s no secret that Health Insurance costs have skyrocketed in the past decade. Before, it wasn’t unheard of to receive premium health insurance package from your employer. Today, things are a bit different. As healthcare costs increase, so do the costs that employers face. Naturally, employers have been forced to cut costs resulting in lower-tier health plans for their employees. Additionally, some employers may not offer health plans, so you may find yourself looking for individual coverage. Regardless of the offerings, one of the most important considerations for Health Insurance shoppers is costs. In the past, we’ve covered some tips to help you save money on Health Insurance. A High Deductible Health Plan is one of the best ways to save money on insurance, but it’s not right for every individual.
What is a High Deductible Health Plan?
Oftentimes, these lower-tier Health Insurance plans are High Deductible Health Plans or HDHPs. HDHPs are Health Insurance Plans that have a higher deductible than traditional plans. Deductibles are the total out-of-pocket costs that an individual will pay before Health Insurance begins taking over the costs of health care. High Deductible Health Plans offer lower premiums, but more health care costs for the individual upfront.
When Is A High Deductible Health Plan a BAD Idea?
High Deductible Health Plans are not built for those who frequently experience medical conditions or who have chronic illnesses. In the case of a chronic disease like diabetes, High Deductible Health Plans can increase your total health care costs and prevent you from receiving the care you may require in the event of an inability to pay. For conditions like diabetes, your healthcare is imperative to your everyday life and anything blocking your access to medication or care can create negative effects to your health for the rest of your life. In this case, High Deductible Health Plans are not recommended.
Additionally, older adults who are on various medications and frequent specialists physicians such as cardiologist shouldn’t consider an HDHP. Because all office visits, tests, and medication will be out of pocket until you reach your deductible, you will most likely end up spending more out of pocket than a higher premium, lower deductible plan.
When is a High Deductible Health Plan a GOOD Idea?
A healthy, younger adult with no history of medical conditions or genetic predisposition to diseases can benefit from a High Deductible Health Plan for a few reasons, specifically costs savings. A healthy adult who isn’t currently on medications and doesn’t expect to be in the near future can save thousands of dollars in monthly premiums with a High Deductible Health Plan. Because these plans increase the up-front costs, monthly premiums are typically lower than Low Deductible Health Plans. Since you don’t expect to use much of your health care, you can save a tremendous amount of money while still insuring you have coverage in the event of an unexpected illness.
High Deductible Health Plans are also eligible for an HSA, or Health Savings Account. This savings account allows you to save pre-tax income into an interest-bearing account to help cover your out-of-pocket expenses. Because High Deductible Health Plans can help lower not only your insurance costs but also your employers, many offer matching contributions to HSA accounts.
How Do I Decide Between a High Deductible and a Low Deductible Health Plan?
Shopping for Health Insurance can be tiresome. It is extremely important to evaluate your yearly medical costs and compare these with your Health Insurance quotes. Health Insurance Agents, like those at Bogle Agency Insurance can help you find a plan that not only saves you money but provides the coverage and care you need. Whether you’re shopping as an individual or as an employer, the Bergen County Health Insurance Agents at Bogle Agency Insurance can help! Contact us today to learn more!