Pros and Cons

There are pros and cons to a high deductible health insurance plan and the insured has to look at the idea from several angles before making a final choice. Typically, there can be a drastic savings to the monthly premiums associated with a high deductible, but the individual’s out-of-pocket expenses is going to be higher.

For those in good health, it can be an opportunity to put money into a savings account to offset any medical emergencies and in the absence of the need for medical care, may allow money to be freed for other things.

For example, if the high deductible policy carries a $2,000 deductible, a person would have to save $166 every month to pay the annual cost. That is in addition to any other possible expenses, and if the deductible includes prescription costs, any medications will come out of the savings account. If the person has no health problems, once the $2,000 is saved, they can be covered until the first medical emergency, at which time the account is going to tapped out.

To determine if a high deductible medical plan is right for you, compare the difference in prices between the high deductible plan and one with a traditional deductible or even on with zero deductible. Then figure how much you will have to save every month throughout the year to pay the deductible. If the difference between the two policies is $100 per month, for instance, and you have to save $166 per month to save enough for the annual deductible, it will be cheaper to buy into the regular deductible policy.