Health insurance can be a complicated subject to understand. Whether you are choosing between low and high deductibles, structured copays or health maintenance organizations, it may become a little overwhelming. The truth is, selecting a health insurance plan doesn’t have to be complicated at all. Understanding the terms of insurance will help you to become a self-made insurance expert.
Many insurance plans require an initial deductible to be paid before your actual insurance benefits begin. The deductible is an out-of-pocket amount that you as the policyholder, are responsible for. In order to remain covered by the insurance plan, you are also responsible to pay a monthly fee (premium). Generally speaking, the high deductible insurance plans will often require lower monthly premiums. Due to the increasing cost of monthly premiums and cost of living, many people are choosing a high-deductible plan; however, this may not be beneficial to their family or situation. There are several benefits to choosing the low deductible plan on your health insurance. These include:
Although a low deductible plan will increase your monthly premium, you will have full, comprehensive coverage of your medical expenses. For instance, a plan with a $5000 deductible will require the policyholder to pay $5000 out-of-pocket before any of their medical services are covered. Many people simply won’t pay $5000 a year in medical expenses, and consequently will never receive full medical coverage. While this may be fine for some, people who have small children, or chronic medical issues depend on that full coverage to help them with their medical expenses throughout the year.
You can determine whether you will save money from selecting a low deductible plan by looking at all of your yearly medical expenses. You can do this by looking at your previous year’s medical expenses, including:
- Office Visits
- Surgical Procedures
- Medical Procedures, such as dialysis or physical therapy
- Medical Equipment, such as oxygen or durable medical equipment
Break these expenses down into monthly totals in order to determine how long it will take you to reach your annual insurance deductible.
If you are anticipating any costly surgical procedures, you may want to select a low deductible plan. If you have a $500 deductible as opposed to a $5000 deductible, you will only be responsible for paying $500 of your surgical costs before the insurance kicks in. Those who have surgical procedures performed while on a high deductible insurance plan may become financially devastated by the high out-of-pocket cost.
Reduced Stress and Anxiety
The stress and anxiety stemming from potential financial disaster can devastate your life. Many people find solace in knowing they have comprehensive insurance coverage if something should happen. If an emergency occurs, they will only need to pay the price of their low-cost deductible, and not be burdened with the extreme amount of the treatment.
High deductible policyholders often have to make the hard decision between getting the treatment they need and paying a large sum of money, or saving their money by not being treated. Many simply cannot afford to pay the cost of lab work, or doctor visits altogether. By having a low deductible policy, you can go to the doctor whenever you need, without worrying about the costly consequences.
While everyone’s medical situation and needs are unique, it is important to weigh the benefits along with the shortcomings of having a low deductible plan.