High Deductible Health Plan Pros and Cons List
In an increasing number of instances, employers are beginning to offer high deductible health plans to their staffs. By providing their employees with the chance to save money by not paying excessively high monthly premiums and offering the opportunity to pay a higher deductible instead, many citizens have been able to reap the benefits that come with these savings. When deciding on a high deductible health plan, it is important to conduct all of the necessary research and ensure that this plan is right for you. The following list of pros and cons can help you during this process.
List of Pros of High Deductible Health Plan
1. Lowered Monthly Premiums
For those who are struggling with monthly premium payments that are too high, switching to a health plan with a higher deductible rate can help them to save money each month. A worker who does not earn a high wage will typically opt for this plan to get out from under the massive monthly bill. This gives lower and middle class employees the chance to put their earnings a variety of other important expenses.
The lessened monthly premiums serve to make health care much more affordable, even those who are in a lower economic class. Basic health services are included in their high deductible health plan, which allows them to receive rudimentary health care with absolutely no additional cost.
2. Helps Those Who Have Preexisting Conditions
A person who has preexisting health conditions often struggles to find insurance companies who are able to help them. An insurance company is typically reticent to provide coverage to someone with preexisting conditions, because there is a much greater chance that they will be forced to eventually to pay out to them.
Since the insurance company does not like to spend more in payouts than they receive in premiums, it is best for those with preexisting conditions to choose a high deductible health plan. The reason for this is because you are responsible for footing the bill on most of your medical expenses. This leads to a decrease in the insurance company’s financial responsibility, which makes them more apt to offer you the coverage you need.
3. No More Wasting Money On Unnecessary Benefits
By making the switch to a high deductible health plan, a person can ensure that they are only paying for the benefits that they are actually planning on using. These plans are recommended to younger adults who are currently in good health and will not have as much urgent need for health care.
A person is able to lower their overall medical costs by taking more of a proactive role in their own health maintenance. Exercising and eating right not only help the person to remain fit, but also serves to keep their costs low, which is the usual impetus for switching to a high deductible health plan in the first place.
List of Cons of High Deductible Health Plan
1. Initial Deductible Can Be Very High
It is great to save money each month, but these savings can be very easily offset by the high deductible you are required to pay before receiving any form of health care. An initial deductible can be as low as $1,000, but can rise sky high, costing certain patients of $10,000. Before making such an important decision, it is important to weigh the pros of the lower monthly costs against the cons of the higher deductible.
Unless you are able to pay the deductible out of pocket, you are unable to receive health care of any kind. Those with tighter budgets who cannot afford such a large out of pocket expenses are advised not to make the switch to a high deductible health plan, as it could leave them without any recourse should a true medical emergency occur before that deductible has been paid.
2. Benefits Are Capped
Those who are in need of costlier health care may not be able to receive the amount of coverage that they need from a high deductible health plan. A high deductible health plan comes with a benefits cap that can restrict any payouts over the amount of $1 million. Some plans may raise that cap to at least $5 million. Once a patient hits the agreed upon cap, they are forced to pay their expenses out of pocket.
While this may seem like a very high cap that is easy to remain underneath, medical events take place on a daily basis that are catastrophic in nature. A high deductible health plan does not always provide enough coverage for those who are in need. Serious accidents and major diseases come with expenses that are prohibitively high, leaving you holding the bag for any additional expenses over the cap.
3. Avoidance Of Services
When a person is concerned about having to pay a very high deductible, they may decide to avoid seeking necessary health care. If a person decides on this strategy, it can do more harm than good over the long haul. The person is able to save money on their deductible, but any chronic health conditions that they are avoiding receiving treatment for tend to worsen.
There is no reason for a person to actively avoid hospitals and doctors when health concerns need to be taken care of. If a high deductible health plan means steering clear of medical care, then it is not accomplishing its intended purpose.