Navigating the world of health insurance can be a particularly difficult process. Not only do you have to worry about the costs of premiums but also what you will be expected to pay for co-pays as well as your deductible. Depending on the type of health insurance plan you choose, the level of your deductible will be impacted.
When looking at your health insurance plan, the co-pays are fairly straightforward. However, when it comes to deductibles, it can become much more complicated. Before you make your health care plan determination be sure to consider the five things about health insurance deductibles listed below.
Even When Paying on Your Deductible You Will Enjoy Lower Costs
Even though you may have to pay the total cost of a service until your deductible is met, you still will pay a lower price by having insurance. Your insurance company will have negotiated rates with the providers that they use. By having insurance through that company, you are entitled to those discounted rates.
All Marketplace Plans Will Cover Preventative Care
There used to be many healthcare plans that would have preventative services go towards the deductible. With more recent changes in healthcare, now all marketplace health insurance plans will provide coverage for preventative services such as well visits, immunizations, and health screenings without requiring you to satisfy the deductible first. This is good for both your health and the health of your checking account.
Even With a High Deductible You Will Have a Limit on the Total Annual Out-of-Pocket Costs
Healthcare guidelines put a maximum for out of pocket costs that a person will pay per year for health costs. The maximum cost per year (2019) is $6,750 for an individual, or $13,500 for a family. This means that even if you have a high deductible, your total co-pays, deductible costs, and co-insurance amounts cannot exceed such amount per year. What you pay towards your deductible will go towards this amount. Meaning, if you have a high deductible plan, you may not have many more expenses once it is satisfied.
Over 60% of Marketplace Plans Have Deductibles Less Than $3,000
Even though it may be wise for you to see a higher deductible to obtain a lower premium, most plans available on the marketplace have a deductible that is less than $3,000 for an individual. Shop around until you find the right high deductible plan for you (if that is an option).
Your Deductible Will "Renew" Each Year
Your annual deductible is the set amount you have to pay out of pocket for the year before certain services are covered. This amount will renew each year on the same date that your policy renews. This leads to a planning opportunity to try to bunch up your medical expenses in one year should you be closing in on paying your full deductible. Of course, your health is more important than finances so don't let the finances be the dominant consideration.
Health Savings Account
If you do choose a high deductible plan, you may be eligible for a health savings account ('H.S.A.") at work or individually. We have written about such accounts previously, but -- if done right -- savings to an H.S.A. can be one of the best tax strategies you implement all year.
By understanding how health insurance deductibles work, you can ensure that you choose the best plan that can fit your overall plan.